The running of the BIU Credit Union has come under fire from the Bermuda Monetary Authority for the second year in a row.

The BMA criticised the practices of the Bermuda Industrial Union members' bank as "less than satisfactory'' in the financial services section of its annual report, released to Parliament this month.

In 1993, the BMA said it made a number of recommendations to Credit Union management on how to bring about compliance with the Credit Unions Act 1982.

The recommendations concerned "changes necessary to bring the accounts, the statistical returns systems and the operations of the Credit Union into better order'', the BMA report said.

"Some progress has been made in this matter but the situation is still less than satisfactory,'' it concluded.

Credit Union chief Mr. Calvin Smith had no comment yesterday on the criticism.

"You better talk to them -- let them explain it,'' Mr. Smith said.

The BMA, which is headed by Mr. Malcolm Williams, is charged with the responsibility of regulating financial institutions which operate in or from Bermuda.

The report described the BMA's role as one of ensuring that such institutions have "policies and procedures in place so as to operate effectively and efficiently in the interests of their depositors and shareholders''.

Bermuda had avoided a growing tendency internationally to legislate its regulatory role so as to maintain a competitive edge in banking and financial services, the report noted.

However, it said, "There is a need to strive for the introduction or building of an efficient and unbureaucratic structure of banking and securities supervision and regulation which complies with international standards.'' Controversy surrounded the BIU in September when it was learned unionised Sonesta hotel workers being laid off this winter would not be getting any unemployment pay from the union because it could not afford it.

And hotel and sources complained benefits paid to BIU members were "basically zero'' when compared to the union's income.

Copies of the BIU's latest financial reports, obtained from the Registrar General, painted the BIU as land rich but cash poor, having spent more money than it earned in 1993 leaving a total of $308,154 cash in the bank.

Almost all of its nearly $8.5 million in assets continued to be in real estate.

And whereas the BIU took in $1,955,925 in member contributions (dues) plus fund administration fees and profits from its gas station, it paid out less than $25,000 in benefits (sick, strike, superannuation, education upgrading and unemployment pay).