TORONTO–Ontario is seeking to modernize the framework under which credit unions and caisses populaires operate with a goal of better serving communities, according to a new report.
“Now more than ever is the time to ensure that the credit unions and caisses populaires sector is healthy, strong and competitive – and not constrained by outdated or overly prescriptive legislation and regulations that limit its growth opportunities,” said Minister of Finance, Peter Bethlenfalvy, according to NewsOntario.ca. “Our government is enabling modernization in this important sector, which plays a critical role in communities across the province by helping Ontario families and businesses invest in their future.”
NewsOntario.ca reported the new legislation will allow credit unions and caisses populaires to provide more options through expanded services to its members, including small businesses in the agriculture, hospitality and tourism sectors, as well as hard-working Ontario families in small, rural and remote communities where credit unions serve as key financial providers.
The Highlights
Highlights of the Credit Unions and Caisses Populaires Act, 2020 include, according to the NewsOntario.ca:
- Removing restrictions that currently limit credit unions’ ability to invest and offer services to consumers
- Allowing the sale of property and casualty insurance in branches and online, which will provide opportunities for insurance intermediaries and credit unions to seek mutually beneficial business relationships that could reduce costs and increase competition
- Enabling the Financial Services Regulatory Authority of Ontario (FSRA) to operate as a principles-based regulator that maintains the stability of the credit unions and caisses populaires sector, while giving institutions some much needed flexibility
- Enhancing consumer protection by enabling FSRA to have better oversight of the sector through an industry-led market code of conduct and a strengthened compliance regime.
First Proposed in 2020
The government first proposed this new legislative framework in the 2020 Budget, following a comprehensive review to modernize the Credit Unions and Caisses Populaires Act, 1994, which included extensive research on international and national standards to ensure best practices and efficiencies, according to NewsOntario.ca
“The proclamation of the new Credit Unions and Caisses Populaires Act now positions Ontario credit unions to be more competitive in the current financial services landscape,” said Martha Durdin, president and CEO of the Canadian Credit Union Association. “It will also further enable the sector to offer more consumer choice through the new legislative and regulatory powers, such as the ability to sell property and casualty insurance in-branch and offering services to non-members.”
More than 1.7 million Ontarians are members of a credit union or caisse populaire.