As the government looks towards long-term economic recovery and prosperity, it is important that Ontario’s financial institutions remain resilient and innovative. The flexible new legislative framework will expand opportunities for credit unions and caisses populaires fostering growth and better service for communities.
“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ensure that the credit unions and caisses populaires sector is healthy, strong and competitive – and not constrained by outdated or overly prescriptive legislation and regulations that limit its growth opportunities,” said Minister of Finance, Peter Bethlenfalvy. “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.”
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.
Highlights of the Credit Unions and Caisses Populaires Act, 2020 include:
- 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.
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. Since then, the government has worked closely with stakeholders as well as FSRA on the necessary regulations and rules to provide time to transition to the new requirements and ensure the new legislation, effective March 1, 2022, meets the needs of the sector.
“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.”
“This new Act has become real thanks to the efforts of so many people over a number of years. At Libro, we’re excited about the opportunities it brings for our sector, owners/members, and communities,” said Steve Bolton, CEO, Libro Credit Union. “This Act will allow credit unions to work within a modern financial services environment, and grow to better support more Ontarians who continue to choose to bank with local credit unions.”
“Caisse Alliance is pleased to see the arrival of this new Credit Unions and Caisses Populaires Act. The Caisse recognizes the ongoing collaborative work of the government, the regulator and Ontario’s credit union and caisses populaires sector to bring about this new Act,” said Philippe Boissonneault, Board Chair, Caisse populaire Alliance limitée.
“This new Act reduces barriers to allow us to better serve the people of Northeastern Ontario, increase our capacity to innovate while protecting depositors. The Caisse would like to thank Minister Fedeli for initiating the revision of this Act.”
“Financial services and technology are rapidly evolving and the new Credit Union and Caisses Populaires Act will enable KCCU and the wider sector to continue to expand the products, services, and technological options for financial consumers,” Jon Dessau, CEO, Kingston Community Credit Union. “The Act provides the necessary tools, regulatory framework and oversight for made-in-Ontario financial services and will strongly support the sector’s mission to foster the financial health of our member-owners and our wider communities well into the future.”