Civil Service Credit Union bled dry

By Benjamin Flowers, Staff Reporter

Share holders and members of the Civil Service Credit Union (CSCU) are unable to get their money, amounting to some $1.2 million, after the organization went into insolvency.
Cedric Flowers, Chartered Public Accountant, explained that of the 1,200 people affected by the insolvency, some 200 of them had non-performing loans which totalled $2 million. Flowers explained that the CSCU wrote letters requesting payment and even took 100 of the delinquent borrowers to court and obtained judgments against them but they still haven’t made any payments.

The CSCU, which is regulated by the Central Bank of Belize (CBB) under the Domestic Banks and Financial Institutions Act, tried working with the CBB, to try and keep its doors open. The CSCU made several proposals to the Registrar of Credit Unions (also the Governor of Central Bank) on restructuring efforts; however, the registrar did not view any of those efforts as viable and ordered the liquidation of assets.

Flowers explained that the structure of the credit union was to blame for its ultimate demise, because credit unions in Belize have outgrown the informal structure that governs them.

“Technically, every year, everyone on the board can change, all the credit committee members can change, and who will be held responsible? It’s difficult to hold a board of directors accountable now when any bad decisions might have been made from previous boards,” Flowers said.

The Social Security Board made an attempt to auction the CSCU’s Dean Street office building, for monies owed on the mortgage. Flowers said that he doubted that even the sale of the building would be able to cover what the CSCU owed to SSB, let alone its shareholders, leaving loans, many of which are non-performing, as the only asset the CSCU has left to sell.

“If there was a possibility to collect all those outstanding loans then we could easily pay everbody off, but the prospect of collection seems very dim,” Flowers added.
Members waiting on their refunds will need to wait until all the assets have been sold to see if they will get anything back.

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