The federal government has proposed regulatory changes that will establish a legal framework for providing credit unions the option to be incorporated and regulated at the federal level.
Under the proposal, Bill C-9, provincially-regulated credit unions will have the option to become federally incorporated, allowing them to operate more seamlessly across provincial borders and benefit from oversight by the federal Office of the Superintendent of Financial Institutions (OSFI). Until now, credit unions have been regulated provincially.
“Credit unions are used by millions of Canadians for financial services similar to those offered by large banks,” said Federal Finance Minister Jim Flaherty. “The proposed regulations will give credit unions the flexibility they require to grow beyond their provincial borders and benefit from Canada’s world-leading federal regulatory framework and oversight.”
“Allowing credit unions to operate nationally will give consumers greater financial choice and spread the benefits of federal regulation to more Canadians. As a result of these changes, credit unions will be able to improve the services they offer,” added Minister Flaherty.
The option was first announced in the 2010 budget.
Meridian, Ontario’s largest credit union, said the proposed changes will “change the landscape of the Canadian credit union system and create new opportunities for credit unions and credit union Members in Ontario and across Canada.”
“As part of the co-operative movement, credit unions have an advantage over the “Big Banks”; we share our principles and work together, not against each other,” said Sean Jackson, Meridian’s President and CEO in a statement. “With our superior Member service, attractive rates and local approach to decision making, credit unions are truly a flexible and competitive alternative to the traditional banks.”
Credit Union Central of Canada, the national trade association for Canada’s credit union system, said it welcomes Minister Flaherty’s announcement.
“Credit Union Central of Canada supports the availability of a federal option for credit unions. We welcome today’s announcement as another step toward enabling credit unions to choose a new option to address growth opportunities and enhance service to their members,” said Gary Rogers, vice president, Financial Policy, Credit Union Central of Canada.
The Federal Credit Union Conversion Regulations were posted in the Canada Gazette on July 7.