Ontario Moving Forward with Recommendations to Strengthen Credit Unions
Proposed Changes will Support Small Businesses and Local Communities
Ontario is proposing changes that will help credit unions and caisses populaires remain competitive and better serve individuals, communities and businesses.
Minister of Finance Charles Sousa was in Hamilton today to accept a report prepared by Laura Albanese, Parliamentary Assistant to the Minister of Finance. The Credit Unions and Caisses Populaires Act, 1994: legislative review report contains fifteen recommendations that will protect consumers, align legislation with international best practices to mitigate risk and enable credit unions to meet the evolving needs of their members.
The recommended changes to the Credit Unions and Caisses Populaires Act include:
- Changing the deposit insurance coverage limit to $250,000 (currently $100,000 for basic deposits and unlimited for deposits in registered accounts such as registered retirement savings plans and tax-free savings accounts)
- Permitting credit unions to wholly own a wider spectrum of subsidiary businesses than currently permitted, such as insurance brokerages, so they can better compete with other financial institutions
- Working with credit unions to explore the role they can play in protecting and educating consumers of payday loans
Strengthening credit unions while protecting consumers is part of the government's plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan includes investing in people's talents and skills, making the largest investment in public infrastructure in the province's history, creating a dynamic, supportive environment where business thrives and building a secure retirement savings plan.
- Credit unions and caisses populaires are member-owned, deposit-taking institutions that provide loans and other financial services to their members. Caisses populaires focus their services on French-speaking communities.
- With almost 1.6 million members, Ontario’s credit unions have provided $39 billion in loans to Ontario households and businesses as of the end of 2015.
- Approximately 6,800 Ontarians are employed by these institutions.
- Parliamentary Assistant Laura Albanese was appointed to lead the review and included consultations across the province to seek input from the public on ways to strengthen credit unions while protecting consumers.
- Members of credit unions, including small businesses, rely on them for essential financial services, often as alternatives to banks or in small communities where banks do not operate.
“Credit unions and caisses populaires provide valuable services that benefit their members, help grow the economy and create jobs. Implementing these recommendations would foster a more efficient and effective regulatory framework that better protects consumers and investors while improving the competitiveness of Ontario’s financial services sector.”
“Throughout the consultations I heard how credit unions and caisses populaires play a pivotal role in their communities. Many support small businesses and entrepreneurs that may not otherwise have qualified for credit with other financial institutions. Many are the sole financial institution in rural, remote and inner-city communities. These recommendations can help credit unions and caisses populaires better serve these communities in the years ahead.”