Credit Union raises alarm over possible $200k fee hike

(CNS): The Credit Union is calling on members to vote against a potential fee hike as part of proposed amendments to the Cooperative Societies Act. The public servants’ bank is speaking out against the amendments, which are aimed at offshore financial entities. If it is caught up in a possible $200,000 operating fee, this could threaten its “foundational principles and financial stability”, it has said.

However, an official from the financial services ministry who spoke to CNS confirmed that this is just the start of the public consultation on the proposed bill. This is the period during which the data and potential impact of the fee hike are under discussion, and the information collected will support the policy behind the legislative amendments.

“Nothing is set in stone yet. This is just fact-finding,” the senior official told CNS.

Once the ministry has analysed the submissions from the Credit Union, it will be able to make a judgement on whether or not this institution, despite being regulated by CIMA, can be excluded from fee hikes targeted at non-domestic financial institutions that have not seen an increase in fees for many years, despite the soaring cost of regulation.

CNS understands that the inclusion of the Credit Union is unlikely to get support from the wider UPM Caucus.

But given the potential impact on the Credit Union, it is calling on its members to vote in an online poll so it can demonstrate their support for the bank’s position to the government. The institution has warned that if the government imposes the fee, it would challenge “the cooperative model that has been serving the community for nearly 50 years”.

“The proposed fee hike comes at a time when the Credit Union is already dealing with increased operational costs,” bank executives said in an email to members. “Currently, the Credit Union spends around $800,000 per year on regulatory obligations while maintaining low fees and favourable rates for members.”

If enacted, the legislative changes would likely result in reduced dividends, increased member fees, changes to interest rates and adjustments to loan rebates.

“These changes would impact all members, particularly those in lower to middle-income brackets who rely on the Credit Union for affordable banking solutions,” the bank stated. “The Credit Union uniquely supports local members by providing 100% financing for first-time home-ownership and support for lower and middle-income families.”

Urging members to vote against the amendment, the bank said their participation is crucial in ensuring its continued financial stability and service.

See the Consultation Paper of the 2025 Revision of the Financial Services Fees to view the proposed amendments.