The Credit Unions Act of 2002 significantly expanded the potential scope of credit union operations, and created greater similarities between these institutions and the commercial banks.
Since the enactment of the first Credit Unions Act in 1944, credit unions in Belize were supervised by a department of government under various ministries. However in December 2005 the Credit Unions Act was amended to:
• Bring credit unions under the regulatory umbrella of the Central Bank of Belize
• Upgrade the supervisory standards of credit unions to comply with international best standards
• Set administrative penalties for non-compliance with the requirements of the Act
Under Section 51(7) of the CUA, the Central Bank of Belize issued two requirements: CUA Requirement No. 1 - Classification of Loans and Other Assets - and CUA Requirement No. 2 - Allowance for Loan Losses and Impaired Assets, which came into effect on 28 March 2013.
CUA Requirement No. 1 establishes the procedures for the classification of loans and other assets and provides guidance for the restructuring of loans; whereas CUA Requirement No. 2 prescribes the methodology for the calculation of allowance for loans losses and impaired assets through charges to income on a quarterly basis.