HOPEWELL, Hanover – The management of the Hanover Co-operative Credit Union (HCCU) and the Montego Co-operative Credit Union (MCCU) have put forward a proposal for the merger of the two entities to its over 62,000 members.

Should the merger occur, the new entity would become the fourth largest credit union in the country.

“When we merge… of the 34 or 35 credit unions that now exist, when we merge, we will then become number four,” declared Lambert Johnson, president of the Montego Co-operative Credit Union.

Johnson was addressing the first in a series of planned meetings by the boards and management teams of both credit unions to outline the rationale for the proposed merger to members. The meeting was held last week at the Smoke Marlin Restaurant in Hopewell, Hanover.

Other meetings are to be held in the parishes of Hanover and St James over the next few weeks.

Combined, both credit unions have savings of roughly $4.75 billion, $2.87 billion in loans, and $5.2 billion in total assets.

“So you can see that when we merge it will really make us a bigger, stronger credit union. We will be able to offer you the services that you want, the loans, the savings, the products…,” Johnson added.

“So this merger is for the benefit of us all, not Hanover, not for Montego, but for us. Because, when the two become one, we shall become a force to be reckoned with in the financial markets of Jamaica, and so I urge you to support this merger.”

Johnson argued that regulations being imposed by the Bank of Jamaica (BOJ) on credit unions “come with responsibilities and expenses”.

“The reality is, it is so expensive to adhere to the rules that will be set out by the central bank that the small credit unions are not going to be able to handle all the expenses that are involved,” he emphasised.

Leroy Dawes, the immediate past president of the HCCU, concurred with Johnson and the manager of MCCU, Ornell Bedasse, as he pointed out that the BOJ has indicated that it does not intend to regulate so many credit unions and hence some will be forced to merge or close their doors. He also stated that under the regulations, all credit unions will have to be licensed by the Jamaica Deposit Insurance Company (JDIC), while 20 per cent of their liquid assets will have to be deposited with the Central Bank.

“So, that 20 per cent will have to be there at the BOJ – can’t touch it, not earning from it, and there are other requirements. I don’t want to burden you, but it is frightening,” Dawes said.

Other stipulations, he said, include the making of quarterly reports instead of the usual annual returns and the 100 per cent protection for loans which are delinquent for more than three months.

The proposed merger is expected to be finalised by August 1, while a name and logo competition has been launched by the two entitities. Entry deadline for the competition is February 28. The winner will receive $50,000 in cash.

The HCCU was conceived in the summer of 1974 by Enid Watson Gonsalves as a partner club to provide financial services to a number of her friends.

It was registered on March 21, 1975 by the Department of Co-operative and Friendly Societies with its location at Malcolm Heights in Hanover, the then residence of Watson Gonsalves, who later served as secretary/treasurer for the HCCU for 12 years.

Watson Gonsalves, up to the time of her passing over six years ago, was the acting Custos of Hanover and a retired principal of the Lucea Primary School in the parish.

The credit union which has a membership of over 30,000 has one location in Lucea, a state-of-the-art building constructed in 2013.

The MCCU, which has a membership of over 32,000, was formed as a result of the merger of the St James and St Paul’s Credit Unions in 1969.

Montego Co-op now operates from two locations in the resort city of Montego Bay at 6 Sam Sharpe and 20 Church Street.