The federal government has announced a plan to provide temporary support to credit unions to help them make the move from the existing provincial regulatory framework to the new federal framework.
Finance minister Jim Flaherty said Friday that the government intends to supply temporary transitional support to provincial credit unions that have received permission to move to the federal framework. This support will include extended deposit insurance, a short-term funding facility, and an extended transition period to comply with federal insurance networking rules.
Finance Canada says that it will work with the credit union industry to develop the terms and conditions for these support measures. To that end, Flaherty has also written to the national trade association for credit unions, the Credit Union Central of Canada, to invite it to participate in the consultation process.
The federal regulatory framework for credit unions came into force in 2012. Finance says that a number of credit unions have pointed out the challenges of moving from provincial regulation to federal standards, stemming from differences in federal and provincial deposit insurance coverage, as well as insurance networking rules — which it aims to address with the measures announced today.
“The enhancements being made to the federal credit union framework will make it easier for eligible provincial credit unions to transition into the federal system, and give them the opportunity to offer their innovative products and services to Canadians nationwide,” said Flaherty.