TV newscaster Alicia Ortega aired findings of a recent investigation into the situation of the Cooperativa de Ahorros y Créditos de Herrera (Coop-Herrera), a 56-year old institution with over 37,000 uninsured depositors. The cooperative bank could go bankrupt, and reports are that its depositors are desperate to take out their savings only to be told, “the system is down.” Most of the depositors are low income and these savings are crucial.
El Informe con Alicia Ortega explains that state prosecutors are investigating irregularities in the financial management and suspect money laundering operations of the cooperative bank that has owned up to around RD$10 billion in assets.
Ortega alerts the present situation with Coop Herrera is not about a cooperative that could face bankruptcy. It is about a system that handles RD$240 billion in assets and has hundreds of thousands of depositors and yet is not regulated by the Monetary Law.
She alerts to the consequences of the collapse of a large cooperative bank such as is Coop Herrera.
Ortega says Coop Herrera has been under official intervention for some three weeks. The depositors are desperate for their savings.
Idecoop has intervened the cooperative bank for weeks, while the Public Ministry is also investigating the possible irregularities of the cooperative bank while there is talk of money laundering.
Ortega titles her report, “all that glitters is not gold.” She highlights that the annual report indicated all was swell at the cooperative bank. But now it does not have the cash to respond to depositors, most people of low income.
Ortega says the financial statements issued by the cooperative bank should have raised red flags as there was enough questionable information in them to trigger the alarms of the authorities.
Idecoop, the national cooperative institute, intervenes the entity. In commenting on the difficulties at the bank, Esteban Delgado for El Despertador morning news program on Channel 9 alerted the situation is brought about the lax regulation on the cooperatives. He explained that cooperatives are self-regulating and, despite the large amount of money they handle are not subject to the Superintendency of Banks nor fall under the National Monetary Law.
Delgado explained that the top executive at Coop-Herrera is Jorge Eligio Mendez, a former president of Conacoop, the National Council of Cooperatives. Delgado explained that in 2018 the then Ministry of the Presidency had drafted a bill to create the Superintendency for Cooperatives and included that those that act as financial intermediaries fall under the Monetary Law, but this did not get anywhere. The bill would have helped to avoid a situation whereby the thousands of depositors now do not have access to their savings.
Delgado said instead of the Superintendency for Cooperatives a supervisory department was created at Idecoop, but regulation has been very lax.
According to the authorities, cooperative associations represent an important arm of the economy and account for around 8 percent of the national Gross Domestic Product and assets of more than 271 billion pesos.
Follow the story:
El Informe con Alicia Ortega
El Despertador – 11:30 minutes
22 June 2023