The ongoing move to bring credit unions under the regulatory ambit of the Bank of Jamaica (BOJ) continues to be delayed by various external factors such as external consultation and new political Administration.

The country’s 23 credit unions are currently regulated by the Department of Co-operatives and Friendly Societies (DCFS). The regulator is set to move from the DCFS to the BOJ once the Co-operative Societies Amendment Bill and the Credit Unions (Special Provisions) Bill are brought into effect.

However, this legislative process has been slower than expected due to consultation discussions with the Jamaica Cooperatives Credit Union League in October 2024 and the newly appointed Parliament in September 2025.

According to the Ministry of Finance & Public Service’s (MOFPS) fiscal policy paper, the March 2027 fiscal year will see a focus on enacting legislation to implement the regulatory framework for credit unions.

“Considering the appointment of a new Administration in September 2025 and the requirement to obtain Cabinet approval for any policy revisions, a Cabinet submission is currently being prepared to seek approval of the policy,” stated the MOFPS’ 2026 fiscal policy paper on the special provisions Bill.

The BOJ provided feedback on a draft Credit Unions (Special Provisions) Act in November 2022, with its own website indicating an expectation that both bills being presented jointly to Parliament.

However, the Government of Jamaica’s (GOJ’s) 2025 and 2026 Annual Report (Form 18-K) submissions to the United States Securities and Exchange Commission (SEC) showed no change in detail on the progress of these Bills. The only detail change seen between both reports was the asset base of the credit union sector.

“Specifically, there were ongoing consultations with stakeholders to finalise the Credit Unions (Special Provisions) Bill, assessments of the credit unions’ readiness for licensing as well as the development of corporate governance standards,” the BOJ’s 2025 annual report stated.

Despite there being a delay in the legislative process, various credit unions have moved to merge as they prepare for the upcoming BOJ oversight. Community and Workers of Jamaica Co-operative Credit Union Limited and COK Sodality Cooperative Credit Union Limited merged in December 2024 before Gateway Co-operative Credit Union Limited and EduCom Co-operative Credit Union Limited merged in February 2025. Those two mergers represented the first reduction in the number of credit unions since 2019 when there were 25. There were 32 credit unions in 2016, which shrunk to 28 credit unions in 2017. The Cabinet approved the recommendation for the enactment of legislation for the BOJ to supervise credit unions in May 2017.

“The regulator of the sector, the Department of Cooperatives and Friendly Societies (DCFS), indicated that discussions for additional mergers are ongoing,” the BOJ’s 2025 annual report added.

Credit unions saw total assets rise $17.1 billion or nine per cent to $215.6 billion in 2025, the first time the sector has surpassed $200 billion in collective assets. The largest contributor to the rise in assets was attributed to the $9.8 billion increase in loans to $147.1 billion. Although loan growth continues to moderate compared to prior years, loans represented 68.2 per cent of total assets in 2025.

The growing loan base continues to be underpinned by deposits which grew $14.2 billion or nine per cent to $168.4 billion. The capital base of the sector increased five per cent to $24.3 billion.

Despite there being a 10 per cent rise in total revenue to $22.3 billion, higher interest expense and overhead expenses compressed the surplus of the sector from $2.9 billion to $2.2 billion. Whilst higher interest expense represents the increased cost of retaining deposits with members, The rising information technology and security costs also represent the increasing cost of doing business in an evolving world.

The deterioration in loan quality shows the challenges in collecting on loaned funds from members who faced additional economic pressures. Non-performing loans (NPL) increased $0.6 billion to $4.5 billion at the end of 2025. These bad loans pushed the NPL to total loans ratio from 2.9 per cent to 3.1 per cent, slightly higher than the 2.8 per cent ratio for regular deposit-taking institutions (DTIs).

“The outlook for loan growth in the near term is positive based on the expectation that there will be increased demand to assist with reconstruction and recovery activities arising from the passage of Hurricane Melissa,” the BOJ’s 2025 annual report closed.