“Credit unions and caisses populaires provide valuable services that benefit their members, help grow the economy and create jobs,” Ontario Finance Minister Charles Sousa said. “Implementing these recommendations would foster a more efficient and effective regulatory framework that better protects consumers and investors while improving the competitiveness of Ontario’s financial services sector.”
The government says it recognizes that credit unions offer mortgage and financial products to many Canadians often underserved by larger banks.
“Many support small businesses and entrepreneurs that may not otherwise have qualified for credit with other financial institutions,” Laura Albanese said. “Many are the sole financial institution in rural, remote and inner-city communities. These recommendations can help credit unions and caisses populaires better serve these communities in the years ahead.”
The full recommendations can be found below.
- Changing the deposit insurance coverage limit to $250,000 (currently $100,000 for basic deposits and unlimited for deposits in registered accounts such as registered retirement savings plans and tax-free savings accounts)
- Permitting credit unions to wholly own a wider spectrum of subsidiary businesses than currently permitted, such as insurance brokerages, so they can better compete with other financial institutions
- Working with credit unions to explore the role they can play in protecting and educating consumers of payday loans
The recommendations are, unsurprisingly, being embraced by Ontario credit unions.
“The changes announced today will help level the playing field for credit unions, allowing us to continue to foster local economic growth and job creation – which will benefit all Ontarians," Meridian President & CEO Bill Maurin told MortgageBrokerNews.ca. "The changes will increase credit unions’ access to capital, which will result in more money to lend to small businesses and individuals.”
Recommendations by Ontario’s Finance Minister could help credit unions become more competitive in the broker channel.