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Caribbean Banking

Financial Information Month: Student Loan Series

Financial Information Month 2016 in the Eastern Caribbean Currency Union

Welcome to October!

Financial Information Month in the Eastern Caribbean Currency Union (ECCU) starts today. October 2016 marks the 14th year of this annual public education program coordinated by the Eastern Caribbean Central Bank (ECCB). The goal of Financial Information Month, as stated on the ECCB website, is “to promote awareness and understanding of general financial and economic issues, and support the aim of “a financially developed and vibrant ECCU region that fosters strong and sustainable economic growth and the improved well-being of the citizenry.”

This year’s theme is “Create, Optimise, Pursue, Embrace; Opportunities” and I will be taking the opportunity to:

  • Raise awareness about the issues Caribbean Student Loan Borrowers face;
  • Foster conversations about the experiences of Caribbean Student Loan borrowers; and
  • Address 10+ years of missed opportunities to improve the Student Loan Scheme in the ECCU.
What is the Eastern Caribbean Currency Union?

The Eastern Caribbean Currency Union is a group of states in the Eastern Caribbean that share the same currency: the Eastern Caribbean Dollar (XCD). The countries that share the Eastern Caribbean Dollar Currency and make up w the ECCU are Anguilla, Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, St. Lucia, Saint Kitts and Nevis, and Saint Vincent and the Grenadines. These countries are also part of the Organisation of Eastern Caribbean States (OECS.)

The Eastern Caribbean Dollar is issued by the Eastern Caribbean Central Bank.


Financial Information Month Student Loan Series 2016 More Related Articles


What is the Eastern Caribbean Central Bank?

The Eastern Caribbean Central Bank was established in 1983, oversees the banking system  within the OECS and is responsible for maintaining the stability of the Eastern Caribbean Dollar.

Although the ECCB is the Monetary Authority for the ECCU and provides oversight of the union’s banking system, its authority does not extend to, what are called “non-banks” like Development Banks throughout the region, which are the banks that issue most of the Student Loans in the Caribbean.

Another thing is, the ECCB’s financial education and awareness programs do not specifically address student loans in the Currency Union nor  the common issues faced by  borrowers when navigating these loosely regulated student loan lenders. In fact, even the most recent  Banking Act makes no mention of consumer protection nor banks’ or non-banks’ legal obligations to their customers. That’s why We Need Student Loan Answers in the Caribbean and this Student Loan Series.

Financial Information Month 2016:
Caribbean Student Loan Series

This month’s Student Loan Series is all about fostering a Regional and Diasporic Discussion about Caribbean Student Loans, raising awareness about the widespread issues with bridge work towards addressing the gap of information about Caribbean student loans.

If you’ve read my story, know that I had a Caribbean student loan from the local Development Bank in St. Kitts and Nevis, and experienced many challenges communicating with my lender and understanding how my student loan worked. After 8 years of making payments on my student loan from that lender, I found out that all of my first year of payments went to interest only.

Those payments added up to $4,000, not a penny of which went to my loan’s principal balance. Even worse, the lack of information I had about how my student loan worked is a far too common experience for Caribbean student loan borrowers who live in the U.S. like me, Canada or within the Caribbean region. This Student Loan Series aims to take the first steps towards changing that.


Related Article My Caribbean Student Loan Story


Share Your Caribbean Student Loan Story

If you have a student loan from the Caribbean Bank, especially from an Eastern Caribbean Bank, join the conversation by sharing your own experience with your Caribbean Student Loan.

Whether you are living in the Caribbean or the North American Diaspora in Canada, the U.S.A. or beyond, I would love to feature your story. Your can submit your story all throughout out the Month of October 2016. Just click the below to join the conversation!

Share Your Story Caribbean Student Loan Series

Submit Your Story


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Caribbean Banks: When Raising Your Fees, You Can Do Better

Sometimes I really have to wonder if the Caribbean can’t do any better. And, in this case, can Caribbean Banks do better?

I came across a back and forth conversation on Facebook about the implementation of a ~$9 US fee to savings accounts at the Royal Bank of CanadaSt. Kitts Branch, less than a week before the May 23rd, 2016 effective date. Keep in mind that less than a week is not a lot of time to move your money to another bank as an overseas customer, (it took me 3 days just to get a customer representative the previous month)  and would mean even longer than usual lines for customers locally.

INADEQUATE NOTIFICATION BY DESIGN

For Commercial Banks in the Eastern Caribbean Currency Union (ECCU), there is no regulation specifying the manner in which nor the period over which customers must be notified before new account fees take effect. Royal Bank’s regulator, the Eastern Caribbean Central Bank (ECCB), even issued a press release that emphasized the limits of its power to regulate Commercial Banks’ account fees.

The Eastern Caribbean Central Bank (ECCB) is concerned about the increase in
commercial banks’ fees and charges across the Eastern Caribbean Currency Union
(ECCU) and the effects on depositors.

By law, what the ECCB has power to do, when it comes to Commercial Banks operating in the ECCU, is to:

[R]egulate the minimum savings rate, that is, the minimum interest rate paid on savings deposits.

The long and short of it is that the, ECCB, the regulator of  Commercial Banks, including Royal Back of Canada, can’t, legally, tell them nothing But the ECCB encourages Commercial Banks to be transparent with their customers and properly inform them of new fees. We all know how all that encouragement turned out…customer, confusion, protests, and 4+ hours long waits in bank lines….


Related Post: Featured: CBC Canada News, Royal Bank sparks backlash with fee hikes in the Caribbean


Caribbean Banks Can Still Do Better

Banks have to make money, and if instituting fees is required for their survival, then customers can vote with their dollars and bank elsewhere (or sadly, in some cases. not at all). For Royal Bank of Canada’s roll out of new fees for savings accounts, your ECCU customers in the region and the Diaspora were not adequately notified and it should not take a law to extend that courtesy. Well… maybe it will, since encouragement from the ECCB has not had much effect.

Posting a notice of new bank fees within the Bank Branch and, three pages deep, on RBC -Caribbean website should not represent the standard of service for a leading, financial institution in the region.

Next time around consider:

  • Notifying each customer individually in writing via the mail;
  • Notifying customers electronically, via email;
  • Providing options for customers to close accounts (via the phone and online); or,
  • Providing options for transfer of funds from closed accounts to customers or another financial institution of their choice.

If you are an RBC customer in the Caribbean affected by the new fees, how did you find out about them? Do you think there should be specific regulation or banks and/ or notification of new fees to customers? Let me know in the comments below.