Credit union warns of potential $200K fee hike: Cayman News Service

(CNS): Credit unions are Call for members Vote against potential fee increases in proposed amendments to the Cooperative Societies Act. The Public Service Bank opposed the amendments targeting offshore financial entities. It said this could threaten its “founding principles and financial stability” if it got stuck with operating fees that could be as high as $200,000.

However, an official from the Department of Financial Services confirmed to CNS that this is just the beginning of a public consultation on the bill, during which data and potential impacts of the fee increase will be discussed, with the information gathered supporting the policy behind the legislative amendments.

“Nothing is final at this point. This is just fact-finding,” the senior official told CNS.

Once the ministry analyses the credit union’s submission, it will be able to judge whether the institution, despite being regulated by CIMA, can be excluded from the fee hikes targeting non-domestic financial institutions, which have not seen fee increases for years despite soaring regulatory costs.

CNS understands that the inclusion of the credit union is unlikely to gain support from the wider membership of the UPM caucus.

But given the potential impact on credit unions, the union called on its members to vote online to show the government their support for the bank’s stance, warning that if the government imposed the fee it would challenge the “co-operative model that has served communities well for nearly 50 years”.

“The proposed fee increases come at a time when credit unions are already facing increased operating costs,” bank executives said in an email to members. “Currently, credit unions spend approximately $800,000 per year on regulatory obligations while keeping fees low and rates favorable to members.”

Once enacted, legislative changes could result in dividend reductions, membership fee increases, interest rate changes, and loan rebate adjustments.

“These changes will impact all members, especially those with low to moderate incomes who rely on credit unions for affordable banking solutions,” the bank said. “Credit unions are uniquely positioned to support local members by offering 100% financing to first-time homebuyers and supporting low to moderate income households.”

Urge members to Vote against the amendmentThe bank said their participation was critical to ensuring its continued financial stability and services.

Check Consultation Documents Financial Services Fee Revision 2025, view the proposed revisions.