Wednesday, January 26, 2022

Trust Proposed to Protect Savings & Loans Co-ops

By on May 20, 2016

SAN JUAN – A proposal to amend the bylaws of the Cooperatives Supervision and Insurance Corp. (COSSEC by its Spanish acronym) to create a trust to protect the island’s savings & loans co-ops has been presented by Sen. Gilberto Rodríguez Valle, chairman of the Senate’s Co-ops, Small & Midsize Enterprises and Microbusinesses Committee.

Rodríguez Valle, of the Popular Democratic Party, joined by Sens. José “Joito” Pérez Sosa, of the New Progressive Party, and María de Lourdes Santiago, of the Puerto Rico Independence Party, explained the purpose of the legislation is to move forward the Legislative Assembly’s policy of providing the co-operative movement with the tools to allow it to continue its social and economic development efforts.

“Today we continue efforts to modernize and bring up-to-date the disposition of COSSEC’s bylaws to insure, protect, and safe keep its resources as a source of support and strength to the co-ops and its members,” Rodríguez Valle indicated.

For more than three decades, COSSEC has supervised, regulated and insured co-ops. Under its bylaws, co-ops have been able to maintain a steady growth pattern in terms of their assets and members.

The proposed bill would establish the statutory basis for the use of trusts as an additional safeguard to COSSEC’s resources which insure the co-ops’ shares and deposits. In addition, the bill would allow for the juridical segregation and protection of such resources, complementing the accounting segregation already performed in COSSEC’s books and financial statements, Rodríguez Valle indicated.

Sen. Gilberto Rodríguez Valle, chairman of the Senate’s Co-ops, Small & Midsize Enterprises and Microbusinesses Committee, center, offers details on the measure. (Inter News Service photo)According to statistics provided by COSSEC, between 2008 and 2015, the island’s co-ops have experienced an incremental growth of 144,625 members, or 17.6%, and an increase in total assets of $1.77 billion, or 26.4%.

In addition, the island’s co-ops reflect an increase in assets that is twice that of commercial banks.

“These numbers demonstrate that the savings & loans co-ops have not stopped fighting and reinventing themselves to achieve a liquid solvency that helps maintain Puerto Rico’s economic development, propelled with financing to small and midsize enterprises, as well as municipalities through social work creation,” Rodríguez Valle said.

Pérez-Sosa noted the bill will help more than one million co-op members to protect and safeguard their accumulated funds.

“It also seeks for co-ops to continue their contribution to Puerto Rico’s economic development, with social interest projects, helping many municipalities with their infrastructure and business development,” Pérez-Sosa said.

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