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News Now

CU System
Puerto Ricos co-op committee holds hearings on insurance
SAN JUAN, P.R. (12/20/10)--The Cooperative Committee of the Puerto Rican Chamber of Representatives held hearings Thursday on circumstances surrounding the resignation of the president of the Public Corporation for the Supervision and Insurance of Puerto Rican Cooperatives (COSSEC), a regulatory oversight group for cooperatives, including credit unions. The committee met for four hours Thursday, during which time it heard from Jose Gonzalez Torres, the former president of COSSEC, who indicated he was pressured to act favorably toward various requests and forced out of COSSEC when he resisted (El Nuevo Dia Dec. 17). COSSEC has a new acting president: Carmen Yolanda Pagan, said news reports. The issue stems from high delinquencies in Puerto Rico and what measures credit unions and the agency are taking to mitigate losses. Puerto Rican credit unions are facing high delinquencies and were looking into ways to sell some credit union loans to a nonfinancial institution. Some call the matter a "bailout," and Gonzalez Torres blocked the sale, said local newspapers reports (El Neuvo Dia and The Daily Sun Dec. 8). Delinquencies continue to rise in Puerto Rican credit unions, but their delinquencies aren't as deep as those at the country's banks, according to information provided by the economics and statistics department at the Credit Union National Association (CUNA). The Puerto Rican legislature is probing what is going on in COSSEC and credit unions. Proceedings surrounding the dismissal of Gonzalez Torres likely won't become public, sources familiar with the matter told News Now. COSSEC's mission is to guarantee the continuity and permanence of Puerto Rico's cooperatives, via regulatory and supervisory duties, and to protect members and depositors through effective use of human and technical resources, said the Sun. Two years ago, a new government agency, the Commission for Cooperative Development (CDCoop) was formed. It is represented on the COSSEC board and allegedly is involved in the situation, although reports did not indicate what the involvement entailed. Credit unions must get COSSEC approval to open new branches and some turf issues among the cooperatives have spilled into the COSSEC board, the reports said. Integration of Financial Services Coop (Integra Coop) had sought approval for $200 million in funding to buy toxic loans from local cooperatives, but the funding agency said it had not approved the loan, according to Sen. Soto Villanueva, who initiated the government's probe (The Sun.


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