February 19, 2013

Only shareholders and depositors can save Building and Loan Association

Tue Feb 19, 2013

The move by a group of shareholders of the St Vincent Building and Loan Association to call a meeting of shareholders this Thursday is a good thing.{{more}}

Despite what the government does and what politicians say, despite the best efforts of the Financial Services Authority (FSA) to establish and enforce controls and enforce rules, ultimately, only the shareholders and depositors of the Building and Loan Association can save it.

It is therefore good that shareholders have called a meeting and are taking the fate of their organization into their own hands. For even if the government, with the support of the East Caribbean Central Bank and the World Bank, pours millions of dollars into the financial institution, if shareholders and depositors continue to withdraw their investments, the money put in by government will be akin to pouring water into a bottomless pit. The Building and Loan Association will only survive if shareholders make a conscious decision to stick with it and ride out this storm. Hopefully, shareholders will decide this is the way to go at Thursday’s meeting at the Methodist Church Hall.

The FSA and the shareholders must dialogue and work together, approaching the table with open minds and with the common stated objective of saving this icon of Vincentian society. Neither group can achieve much without the cooperation of the other. The FSA has the legal authority to take decisions on behalf of the Association, but they would be managing a shell and fighting the inevitable, should the shareholders all decide they want out.

It is also good, should there be any doubt, that Cools Vanloo and Junior Bacchus, two of the persons at the forefront of Thursday’s meeting, have publicly stated that their motives in calling the shareholders together are strictly non-partisan and entirely in the best interest of the 71-year-old financial institution.

When the FSA assumed control of the Building and Loan on February 1, all power which previously resided in the elected Board of Directors was removed. This left a void, a flock without a leader. Junior Bacchus, Jeannie Ollivierre and Cools Vanloo stepped up to the plate and should be commended for taking the first step. At Thursday’s meeting, shareholders have the opportunity to decide in which direction they would like to go and select, on their behalf, a broadbased, experienced, competent group of persons to liaise with the FSA.

Whether this shareholder steering committee will have legal standing is debatable, but any discussions the FSA has with shareholders would certainly accomplish more, in a shorter time frame, if they are speaking with a small group, rather than hundreds of persons.

This is the opportunity for Vincentians to turn a crisis into something positive. Hopefully, with positive engagement between the FSA and shareholders, the transition back to member control will be faster and smoother, and a stronger, better governed, more financially sound St Vincent Building and Loan Association will emerge from this whole fiasco.