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August 28, 2014   

Credit Union World // Credit Union World 15v1

 

Financial Inclusion:
Bridging the gap in Colombia

Global Advocacy:
How it affects your credit union

Perspective

Building a Global Community

By Brian Branch, World Council President & CEO

Equip

Financial Inclusion: Colombia

Credit unions balance social mission and bottom line using technology for outreach.

Connect

Power of Association

How credit unions overcame crisis and found value in World Council membership.

Champion

AML/CFT Rule Origins

By Michael S. Edwards, World Council Vice President & Chief Counsel

Engage

Spotlight: Outreach Innovations

World Council Supporters help make CU development possible. See a few of their own successes.

Building a Global Community

In markets increasingly driven by international events, we build a global community of credit unions and financial cooperatives. Communities network to address the critical issues and challenges they face. We bring together those who have faced similar issues and found solutions to share with their colleagues. International partnership and training programs enable credit unions to connect with, study and learn from credit unions systems in our global community. We build this community by engaging with each other in-person and virtually.

We invite members from countries where credit unions are established, and we welcome other forms of financial cooperatives. Many of our member and colleague organizations go by a diverse range of names: credit union, mutual, financial cooperative, credit cooperative, SACCO or savings and credit cooperative, SKOK, savings house, caisse populaire, caja popular, caja de ahorro or mutual bank. We all share the same cooperative DNA and the same mission to empower our members.

Increasingly, national legislators and regulators follow global standard-setters in setting regulatory rules for credit unions. World Council solicits views from member countries and represents credit unions to global standard-setters including the Bank for International Settlements (BIS), Financial Action Task Force (FATF), Financial Stability Board (FSB), International Accounting Standards Board (IASB) and the Group of 20 (G20). We represent and defend the global community that we all build.

World Council development programs have always started, strengthened and grown the credit union community across the world. Development programs introduce new products, expand markets, introduce new delivery channels and network credit union communities. We protect the international credit union brand with programs to strengthen management, improve credit union supervision systems and assist credit union compliance with updated regulatory systems. WOCCU Services Group (WSG) develops the electronic networking business community of cooperation among credit unions. Electronic networks provide credit unions the ability to pool their investment in IT platforms, negotiate with vendors as a group and offer members a larger network with many points of service. Development programs bring financial empowerment to millions of people around the world by bringing our credit union community to them.

We are World Council of Credit Unions.

Brian Branch is World Council president and CEO. Read about his travels around the globe to visit World Council members, credit union development programs and the people they serve at Brian's Making a Difference blog.


Highlights: "Making a Difference" Blog


In the Lesotho Highlands
June 22, 2013

Precious Gems Credit Union
June 15, 2013

The Road to Blantyre
June 03, 2013

MOE at Affinity Plus
May 05, 2013



Brian Branch

Brian Branch
World Council President & CEO

"Making a Difference" Blog

Financial Inclusion: Bridging the Gap in Colombia

Access to finance has long been considered a means to combat poverty and build economies. In recent years, the use of technology — ATMs, smartphones, point-of-sale devices, cellphones — coupled with the development of microfinance products has helped bring access farther, faster and more efficiently to people most vulnerable to economic ebbs and flows.

Six years ago, the Colombian government began the Banca de las Oportunidades program to eradicate poverty and promote equality by expanding financial inclusion. With funding from this program since 2009, World Council has worked with Colombia's credit unions to develop the tools and methodologies to bring financial services to those who have never had formal access. Credit unions here are proving it IS possible to balance social mission and bottom line, and the Colombian government has recognized their success.

According to Juliana Álvarez Gallego, Banca de las Oportunidades director, the credit union difference in expanding financial inclusion is threefold:

Credit Unions Go to the People
View Photo Story

Credit Unions Tailor Their Products & Services
View Photo Story

Credit Union Members Feel Ownership
View Photo Story


Faces of Financial Inclusion

Faces

Credit unions exist to help make the hopes and dreams of their members a reality. We asked Colombians from all walks of life about their hopes and dreams — professional, personal and for their country. Here's what they had to say.

See More

Credit unions exist to help make the hopes and dreams of their members a reality. We asked Colombians from all walks of life about their hopes and dreams — professional, personal and for their country.

Here’s what they had to say.

dignity

organization

housing

economic independence

literacy

education



Power of Association: Out of the Ashes in Colombia

Although Colombia today has one of the highest rates of cooperative membership, the infrastructure of the credit union sector for many years was missing key elements of a cohesive movement, including a credit union federation. Credit unions suffered through a financial crisis in the late 1990s, during which many credit unions failed. Banks received help, but the credit unions did not. Soon thereafter, a delegation attended an event in Mexico, at which they met Brian Branch, now president and CEO of World Council of Credit Unions. There they began discussions to rebuild Colombia's credit union system.

Twelve years and several World Council development programs later, Colombia's credit unions constituted FECOLFIN, an association dedicated to advocacy, training and strengthening the social sector. FECOLFIN became a World Council member and began a partnership with the Maryland and District of Columbia Credit Union Association last year.

Under the slogan "¡Unidos somos más! [United we are more!]," FECOLFIN is poised to bring change to a country on the rise.


Opportunities to Connect

There are many ways for individuals, credit unions and their associations to connect and learn on an international level. See More

Opportunities to Connect

Whether you are an association, service organization, credit union or simply one person interested in connecting on a global scale, there are many ways to get involved.



ASSOCIATIONS



WORLD COUNCIL MEMBERSHIP

World Council members include regional, national and business service organizations. They enjoy benefits including advocacy support, World Council network recognition, general assembly voting rights, an opportunity to be elected to the board of directors, periodic World Council consultations, networking opportunities, free or discounted products and services, discounted pricing for international meetings and access to member-only regional workshops. Learn how to join at www.woccu.org/membership.


World Council

INTERNATIONAL PARTNERSHIPS PROGRAM

The International Partnerships Program formally brings together credit unions and their associations from around the world. Participants establish their partnership goals, then exchange ideas and technical expertise to build stronger institutions for the benefit of their members.


CREDIT UNIONS



CUSTOMIZED INTERNATIONAL TRAINING

Customized International Training gives credit union groups the opportunity to tailor their international training experience. These topic-specific credit union visits abroad introduce real-world solutions, expert advice and insight to address common challenges.


INDIVIDUALS



INTERNATIONAL CREDIT UNION LEADERSHIP PROGRAM

The International Credit Union Leadership Program offers scholarships to emerging U.S. credit union leaders for intensive, two-week credit union internships around the world. The next internship opportunity is in Brazil, Jan. 12–25, 2014. Applications are due Sept. 27, 2013. Follow the interns' journeys on Facebook.


Professional Fellows Program

GLOBAL WOMEN'S LEADERSHIP NETWORK

The Global Women's Leadership Network is the only international, professional group for women credit union leaders. It connects women around the world to engage in personal and professional growth, credit union development and peer networking and support. Follow the network on LinkedIn.


Global Women's Leadership Network

SOCIAL MEDIA & SUBSCRIPTIONS

World Council engages with the global community online through Facebook, LinkedIn, Twitter and YouTube. Subscriptions are also available for World Council's bimonthly eCommuniqué, Global Regulatory Update, news releases and more.


Facebook Twitter LinkedIn YouTube WOCCU

EVERYONE



WORLD CREDIT UNION CONFERENCE

World Council's 2014 World Credit Union Conference will take place July 27–30, 2014, in Gold Coast, Australia. Attendees will enjoy thought-provoking educational content, first-rate speakers and outstanding networking opportunities with credit union leaders from around the globe. Stay tuned at www.GoldCoast2014.org.

2014 World Credit Union Conference

SUPPORT INTERNATIONAL CU DEVELOPMENT

The Worldwide Foundation for Credit Unions harnesses the power of Supporter donations to create opportunities that last for the world's working poor through development programs, international partnerships, member education and training, as well as disaster relief and rebuilding.



FATF: Where Anti-Money Laundering Rules Come From

Wherever your credit union is located, the Financial Action Task Force (FATF) is the international standard setting body from which most of the principles behind your jurisdiction's anti-money laundering and combating the financing of terrorist (AML/CFT) rules originate.

The FATF is an independent, intra-governmental body that develops international regulatory standards to combat money laundering, terrorist financing and the financing of the proliferation of weapons of mass destruction. Thirty-four countries, as well as the European Commission and the Gulf Co-operation Council, are FATF members. The FATF also relies on an intra-global network of associate member, regional FATF-style organizations, such as the Financial Action Task Force of South America Against Money Laundering (GAFISUD) and the Caribbean Financial Action Task Force (CFATF), which require their member jurisdictions to adopt and follow the FATF's AML/CFT rules even when those jurisdictions are not direct FATF members.

Two important aspects of the FATF's AML principles that can help reduce unnecessary AML/CFT regulatory burdens for credit unions are:

  1. The "risk-based approach" to AML/CFT compliance, as set forth by the FATF's revised 40 Recommendations on AML/CFT issued in February 2012; and
  2. Simplified AML/CFT measures to promote financial inclusion as described in the February 2013 FATF guidance on Anti-Money Laundering and Terrorist Financing Measures and Financial Inclusion.


What the risk-based approach means in practice is that many — but not all — credit union members can be treated as lower-risk customers for AML/CFT purposes because of credit unions' common bond requirements (especially for credit unions with employment-based or localized common bonds); lack of presence of terrorists or drug traffickers within the credit union's field of membership; and other factors that logically indicate the member is a low risk for committing financial crimes. The risk-based approach therefore encourages jurisdictions and credit unions to focus their AML/CFT customer due diligence and monitoring on their highest risk members and away from routine, tick-the-box-style AML/CFT compliance.

The FATF's guidance on financial inclusion allows streamlined AML/CFT procedures under limited circumstances — such as where there is "proven low risk" or for transactions below a de mininis threshold — and is designed to help improve unbanked people's access to formal financial institutions like credit unions. Underserved people in need of increased financial inclusion typically include people in rural areas, low-income persons, undocumented workers, homeless or itinerant people or those who have been underserved or otherwise excluded from the financial sector.

According to the FATF, regulatory flexibility is essential to promoting financial inclusion in large part because such flexibility makes serving the poor and other unbanked persons cost-effective when it would otherwise not be. Without the option of streamlined AML/CFT rules to promote financial inclusion via credit unions and banks, unbanked persons are often driven by necessity into the informal financial sector. There they lack consumer protections; loans are often made at usurious rates of interest; and money laundering is easier to conceal.

Later this year, the FATF is likely to issue guidance papers regarding the expansion of the "politically exposed persons" (PEPs) definition to include domestic PEPs and international organization PEPs. Under the prior definition, only foreigners were considered PEPs. The papers will also provide updated guidance on "new payment products and services" (NPPS) such as prepaid cards, workers' remittances and mobile and Internet-based payments. In April, World Council participated in the FATF's private sector consultative forum in London regarding the upcoming PEPs and NPPS guidance and filed a comment letter with the FATF on the draft NPPS guidance. The letter urged revisions to reduce regulatory burden and increase financial inclusion.

World Council will continue to engage the FATF regarding these and other international AML/CFT issues to help limit unnecessary regulatory compliance burdens on the world's credit unions and help them continue to serve their members and promote financial inclusion.

Michael Edwards is World Council's chief counsel and vice president of government affairs. Learn more about World Council's international policy and advocacy work at www.woccu.org/policyadvocacy.

On behalf of the Worldwide Foundation for Credit Unions and World Council of Credit Unions, I would like to personally acknowledge and thank the generous individuals, credit unions and organizations that continually help us bring accessible and affordable financial services to individuals living in developing countries. Our Supporters provide important resources to their members and often use innovative technology to increase financial inclusion and meet member demands. Take a look below at how a few of our Supporters are implementing unique technology platforms to expand access and improve financial services.

As always, thank you for your continual support and leadership!

Calyn Ostrowski
Worldwide Foundation Director


See how some of our Supporters are using technology to expand financial inclusion:

PSECU
Mobile Apps and Deposits

Mountain America Credit Union
Online Financial Literacy

BCU
Cloud Banking


Join Us!

Guayabetal

Through Supporter contributions, World Council is able to reach millions of people worldwide. One of the ways we do this is by providing mobile technology to credit union officers so they can reach underserved communities, securely record transactions and sign up new members. Support these initiatives and more by becoming a World Council Supporter today.

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