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Enabling Credit Unions and Caisses Populaires to Meet the Evolving Needs of their Members

Backgrounder

Enabling Credit Unions and Caisses Populaires to Meet the Evolving Needs of their Members

Ministry of Finance

Ontario is taking action on the 15 recommendations laid out in the Credit Unions and Caisses Populaires Act, 1994 legislative review report. To better protect consumers, align legislation with international best practices to mitigate risk and enable credit unions and caisses populaires to meet the evolving needs of their members, the report recommends:

Consumer Protection

1)     Closely align consumer protections with those in place for federally regulated banks

2)     Ask credit unions and caisses populaires to publish annual accountability statements, provide notices of branch closures and submit complaints data to the regulator

3)     Work with the sector to explore the role it can play in protecting and educating consumers of payday loans

 Capital Adequacy

4)     Make the sector more resilient to financial shocks by ensuring the level and quality of capital held by credit unions conforms to international standards

5)     Repeal group capital provisions that are not being used by credit unions and caisses populaires

Lending and Investment Rules

6)     Let credit unions and caisses populaires enter into loan syndication agreements with credit unions and caisses populaires in other provinces

7)     Permit them to wholly own a wider spectrum of subsidiary businesses than currently allowed, such as insurance brokerages, so they can better serve their members

Rules Based on Size

8)     Remove the rules that make small credit unions and caisses populaires subject to restrictive limits on lending and investment activities and allow them to establish their own tailored prudent policies in these areas similar to larger credit unions and caisses populaires

Corporate Governance

9)     Ensure credit unions and caisses populaires maintain strong corporate governance by encouraging the regulator to continue monitoring their governance practices

10)  Require credit unions and caisses populaires to report to members on the gender composition of their boards

 Roles of Regulators

11)  Consider the impact on credit unions and caisses populaires of the recommendations of the panel reviewing the mandates of the Financial Services Commission of Ontario, the Financial Services Tribunal and the Deposit Insurance Corporation of Ontario

Deposit Insurance

12)     Set the deposit insurance coverage limit at $250,000 for each type of account, including basic cash, tax-free savings accounts, registered retirement savings plans and registered retirement income funds

Extraprovincial Operations

13)     Continue to foster a dynamic financial services sector by maintaining Ontario's ability to enter into intergovernmental agreements that could permit Ontario credit unions and caisses populaires the option of expanding beyond provincial borders

Technical Amendments

14)     Consider changes to Municipal Act rules such as restrictions on the types of deposits a municipality can hold with a financial institution that doesn't have a credit rating (credit unions and caisses populaires don't have credit ratings)

15)     Include credit unions and caisses populaires as permissible financial institutions in all relevant Ontario regulations

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