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After decades of uneven financial protection for Barbados’ small-scale savers, the House of Assembly has passed a landmark piece of legislation that extends deposit insurance coverage to credit union members, ending a long-standing two-tier system that left hundreds of thousands of ordinary depositors unprotected. The Protection of Depositors Insurance Bill, which has drawn bipartisan support from veteran lawmakers and cabinet ministers, aligns regulatory protection for credit unions with that of commercial banks, cementing the sector’s place in the country’s formal financial ecosystem. For Christ Church West Member of Parliament Dr. William Duguid, a long-serving parliamentarian, the bill represents the finalization of a project launched 20 years ago, when deposit insurance was first rolled out for commercial bank customers. Until now, bank depositors enjoyed a government-backed safety net if their institution failed, while credit union members were left with no such guarantee—a disparity Duguid and other supporters have pushed to eliminate.

“This nullifies this two-tier system,” Duguid told the house. “We in Barbados don’t want a two-tier system, that only the banks got the coverage and the credit unions ain’t got none. We’re saying no.” To illustrate the real-world impact of the new law, Duguid shared the example of Dolores, a small-scale food vendor from Sargeant’s Village who saves small increments of her income. The bill, he explained, will give peace of mind to savers like her, guaranteeing that even if their credit union collapses, they will recover their savings up to a cap of $25,000.

“This legislation is to protect her,” he said. “Through this legislation, Dolores could say, you ain’t got to worry, your money insured, and after a period of time, you’re going to get back your money, and that’s what this legislation is about. That’s what this legislation is about, protecting the small man, the man that just got the $25 000, the $20 000, the $10 000, the $5 000, whatever it is up to $25 000.”

Beyond core deposit protection, Duguid highlighted two key structural provisions that make the legislation flexible and efficient. First, the law requires periodic reviews of the $25,000 coverage limit every three years, eliminating the need for full parliamentary amendments to adjust coverage amounts as economic conditions shift. Second, the bill establishes a dedicated public corporation that will also act as the official liquidation authority if a credit union fails, cutting through bureaucratic red tape to speed up compensation for eligible depositors. For Duguid, the entire framework aligns perfectly with the core credit union ethos of “people helping people,” a principle that has guided the movement since its founding in Barbados.

Minister of Labour Colin Jordan, the Member of Parliament for St Peter, echoed Duguid’s support, framing the bill as a historic recognition of credit unions as foundational institutions for working-class Barbadians. Jordan noted that the credit union movement grew directly out of grassroots community financial systems including the landship, susu, and meeting turn—traditional collective savings models created by ordinary people to overcome systemic financial exclusion. Today, he added, the sector boasts roughly 200,000 members, meaning a majority of Barbados’ population relies on credit unions for daily savings and financial services.

“Credit unions represent the people’s institutions,” Jordan said. “The bill represented another step in recognising the importance and legitimacy of credit unions within the financial system. Offering protection to depositors in these institutions is another step in saying to those depositors, those owners of these institutions, the state sees you. The state understands that these are credible institutions. And the state is prepared to put systems in place that will further protect your investments in your institutions.”

Jordan acknowledged that some smaller credit unions have raised concerns about the cost of participating in the new insurance scheme, but argued that protecting ordinary depositors must take priority over institutional cost concerns. He emphasized that the bill targets exactly the demographic that has the most to lose from a credit union collapse: working people with modest savings who built the movement from the ground up. To support the launch of the scheme, the government has committed a $1.7 million contribution to the initial insurance fund, a investment Jordan said demonstrates the administration’s commitment to standing with working Barbadians and the community institutions they built.

“This investment says to the people of this country that we understand the role of the credit union movement, we recognise its importance, and we are prepared to allocate resources to make sure that the people of this country are protected,” Jordan said. Closing his address to the house, Jordan commended the bill to lawmakers and the public, reaffirming the government’s commitment to supporting institutions built by and for ordinary people. “We stand with the people. We stand with their institutions,” he said. “I commend this protection of depositors bill to this house and to this country.”

As a small island nation on the front lines of accelerating climate change, Barbados faces urgent pressure to expand insurance coverage across critical economic sectors including housing and agriculture to cut the crippling post-disaster financial burden that falls on public coffers, the country’s Minister of Economic Affairs Marsha Caddle has emphasized. Her comments came during Tuesday’s parliamentary debate on the newly introduced Protection of Depositors Bill, legislation designed to extend formal insurance protection to savings held by credit union members across the island.

While Caddle publicly affirmed that the new deposit insurance framework marks a meaningful and necessary step forward for Barbados’ financial system, she stressed that equivalent risk-mitigating protections remain sorely lacking across most other parts of the national economy. “That this bill strengthens and makes insurance accessible to credit union depositors is key,” Caddle told lawmakers during the debate. “But frankly, so are all the other kinds of insurance.”

Barbados, like many other small Caribbean island states, faces repeated and intensifying extreme weather events linked to the climate crisis, and consistently struggles to cover the massive costs of post-disaster recovery and reconstruction. Caddle identified low insurance penetration across high-risk sectors as one of the core structural drivers of this ongoing fiscal challenge. “Whether we’re talking about reinsurance in agriculture, whether we’re talking about home insurance in cases where there may be damage to homes as a result of severe weather events, penetration of insurance is critical,” she explained.

Drawing a comparison to higher-income economies such as the United States and the United Kingdom, Caddle noted that those nations’ more robust disaster response systems are rooted in far higher insurance uptake among individual households and private businesses. When more property and assets are covered by private insurance, the public sector is not forced to absorb the vast majority of recovery costs after a major weather event. “When you have a lower penetration of insurance, it means that the state now has to bear the cost of whatever that event is,” she said. For small developing island states like Barbados, that unplanned fiscal burden can set back national development goals for years, she added.

Beyond expanding access to coverage, Caddle also highlighted the need for broader public education to help Barbadians understand the core value of insurance as a long-term risk management tool, even when no immediate payout is received after paying premiums. “We understand that people often think, ‘Why am I putting money into this thing that I may never see a return from?’” she said. “But that is what you call managing your risk, and it is worth it, particularly when the risk is changing and increasing and coming closer to home every time.”

Caddle framed the debate over credit union deposit insurance as a jumping-off point for broader policy action to close persistent insurance gaps that leave homeowners, farmers and other climate-vulnerable groups exposed to crippling financial losses. Closing these gaps would not only protect individual households and businesses, she argued, but also speed up disaster recovery efforts that are often delayed by the enormous uncompensated costs governments are forced to cover. “Just like depositors need to be able to secure the money that they put in a credit union or a bank, homeowners need to be able to secure their investments, farmers need to be able to secure their investments,” Caddle said. “All of us need to be able to make sure that we are managing the risk in our lives every day.”