Ontario credit unions have voted overwhelmingly in favour of a plan that would clear the last major hurdle standing in the way of a merger between the credit union centrals of Ontario and British Columbia.

On Saturday, credit unions in Ontario voted 98% in favour of a deal that would see $129 million of asset-backed commercial paper (ABCP) transferred from the books of the Credit Union Central of Ontario onto the books of a special purpose vehicle created for the sole intention of holding the ABCP. The vote was held on a one-institution, one-vote basis.

“The vote went well,” says Art Chamberlain, manager of media and public relations for both the Credit Union Central of Ontario and the national central.

Ontario credit unions will own the ABCP on a pro-rated basis, based roughly on their asset size. The intention is that the credit unions will hold the ABCP until valuations rise or until maturity.

The credit union centrals of Ontario and B.C. had announced in the spring of 2007 their intention to combine into a new entity called Central 1 Credit Union, but the fact that the Ontario central held so much ABCP — it held $197 million in par value ABCP and has taken writedowns on a good portion of that — became an obstacle to the merger after the credit crisis hit in August of last year.

The approved plan to move the ABCP off the Ontario central’s books should now leave no obstacles in the way of the merger between the two provincial centrals, which is set to take place July 1. Don Rolfe, who is currently the president and CEO of the Credit Union Central of B.C., will take the reins with the combined entity on that date.