ONTARIO, Canada–The biggest credit union in Ontario has cleared a regulatory hurdle in its efforts to launch a new national bank.
Meridian Credit Union has been seeking the national bank charter since August of 2016 when it first announced its plans. Now a notice published in the federal government’s newspaper, the Canada Gazette, said a letters patent had been issued under the Bank Act to incorporate a “motusbank,” according to the Financial Post.
The credit union confirmed to the Post it is the parent company to “motusbank.”
“We are very pleased to confirm that OSFI (the Office of the Superintendent of Financial Institutions) issued motusbank with Letters Patent,” said Teresa Pagnutti in an email to the Financial Post. “This means that we are one step closer to taking the Meridian banking experience beyond Ontario’s borders and making it available to all Canadians.”
Meridian said it is now eyeing a 2019 launch, although that remains flexible. In Canada, after a lender has been created through the issue of its letters patent, they must then obtain an “Order to Commence and Carry on Business,” which is issued by the superintendent. A newly incorporated federally regulated financial institution may not commence operations until it completes the second step, the OFSI told the Financial Post.
Meridian said the word “motus” means a movement or motion in Latin, and it has also applied to trademark the “motusbank” name, according to a federal registry.
No Plans to Go Public
Meridian told the Financial Post its bank would not be publicly traded and would ultimately be owned by Meridian members. Pagnutti added that the bank would be a separate legal entity that operates independently with its own member base and banking system.
The Financial Post quoted the credit union’s 2016 press release, which read, “Like Meridian Credit Union, it will not be hostage to quarterly earnings per share targets the way that publicly traded banks are, and will therefore take a long term view in terms of how it invests to serve its customers.”
The bank would also be entirely digital, with no physical branches “for the foreseeable future,” according to Meridian Credit Union.
“We believe, and our research shows, that there is a clear desire in the marketplace for an innovative digital bank that offers a true full-service alternative to the big banks,” Meridian CEO Bill Maurin said in the 2016 press release.
The $20-billion Meridian has 90 branches in Ontario and more than 300,000 members.