Ontario has proclaimed amendments to the Credit Union and Caisses Populaires Act, 1994 that will enable credit unions and caisses populaires to remain competitive in the financial services marketplace while preserving the soundness of the regulatory system.

By updating and streamlining the statutes and regulations governing Ontario credit unions, the government is:

• Modernizing capital rules while maintaining appropriate capital standards

• Updating investment and lending rules consistent with prudent risk management standards

• Simplifying requirements for smaller, less complex credit unions

• Modernizing corporate governance

• Streamlining regulatory oversight while providing regulators with additional tools to promote compliance

• Making it easier for consumers to understand the cost of borrowing.

Responsibility for ensuring compliance with capital, liquidity and other solvency related standards will be transferred from the Superintendent of the Financial Services Commission of Ontario (FSCO) to the Deposit Insurance Corporation of Ontario (DICO).  This will further clarify the roles of FSCO and DICO and strengthen solvency regulation in the province.

Amendments to the Act and new regulations will take effect on October 1, 2009.  A limited number of provisions requiring a transition period, including new cost of borrowing and disclosure borrower requirements, are set to come into effect on October 1, 2010.

After the changes to the Act and regulations are completed in 2010, Ontario will have implemented a new standard for providing modern and streamlined regulations for credit unions that will give the sector increased flexibility and encourage competitiveness.