By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

THE Central Bank’s governor yesterday asserted that its proposed reform package will “empower the regulator to address more holistically” Bahamian consumer concerns around bank fees, financial inclusion and access and payment services.

John Rolle, addressing a consultation with financial services executives on the planned changes to key industry legislation such as the Central Bank of The Bahamas Act and Banks and Trust Companies Regulation Act, conceded that “there’s work that needs to happen in this space” to resolve long-standing consumer grievances over how banks treat them. “The reform proposals also add clarity and the mandate that the Central Bank needs to have in pursuing issues such as access and inclusion to financial firms and services in the domestic banking and payment space, especially at a transactional level,” the Governor said. 

“These are expected to, once fully fleshed out, to empower the Central Bank to begin to address more holistically, for example, consumer protection matters as they relate further to fee-setting and other [factors] relating to products and services that are used for payment.

“The products and services we are talking about would be like your savings, checking account, mobile wallets used in payment, as well as instruments such as credit and debit cards which are also used in payments. There’s work that needs to happen in this space to address all the concerns and consumer-related issues.”

Consumer protection featured prominently in the Central Bank’s rationale for the regulatory changes. Stacey Benjamin, the regulator’s in-house legal counsel, added that amendments proposed for the Payment Services Act and Payment Instrument Oversight Regulations will boost Bahamian trust in digital and electronic payments by giving the Central Bank an “explicit mandate” to ensure the interests of consumers are paramount.

“The amendments will also strengthen consumer protection measures, which will lead to increased public trust by users,” she explained. “So, for example, the amendments to the Payment Services Act introduce an explicit mandate for the Central Bank to have regard to the interests of consumers when exercising its powers.”

Ms Benjamin added that reforms to the Protection of Depositors Act “are designed to increase the speed, efficiency and effectiveness of the Deposit Insurance Corporation in the pay-out process” when it comes to compensating Bahamians unable to access or withdraw their money because a bank has failed or collapsed.

“The proposed amendments will clarify that the decision to intervene and close an institution rests solely with the Central Bank as the resolution authority,” she said. “The amendments will reverse current provisions that require depositors to file claims with the Deposit Insurance Corporation, slowing down the claims pay-out process, and also the provision that empowers a minister to reverse a decision that an institution is no longer viable.

“These provisions will be amended and facilitate a smoother, more efficient pay-out process for member institutions… The changes will make the deposit insurance scheme more operationally streamlined and ensure compliance expectations of member institutions are clear.”

Mr Rolle, meanwhile, reminded financial services executives they have until end-October 2025 to submit feedback to the proposed reforms. He added that the amendments also seek to strike a balance between enhanced regulation, and a strengthened supervisory framework and resilience, for credit unions and their “unique” nature as co-operatives.

“Just to say, with regard to the credit unions, they are all members of deposit insurance as well as the credit bureau,” the Governor said. “What the Central Bank is pursuing is reforms that put more emphasis on strengthening governance mechanisms, increased emphasis on the risk management framework in credit unions, and more oversight with the recruitment and appointment process of persons at the helm of these institutions at either Board level or senior management.

“These sorts of reforms are similar to the mechanisms already in place for banks. While these reforms are being put forward it is still recognizing that there are some characteristics that are unique to these financial co-operatives that have to be present notwithstanding the enforcement of the prudential approach to their operations.”

Mr Rolle added that enhanced “consistency” in regulation, as strengthened oversight of the payments system “and money services in general will also provided an enhanced framework to push on financial inclusion”. He added that money transmission businesses and payment services providers will now be licensed and regulated under one regime, the Payment Services Act, rather than the present framework which oversees the former via the Banks and Trust Companies Regulation Act.