TORONTO, March 22, 2016 (GLOBE NEWSWIRE) -- The Canadian Credit Union Association (CCUA) says that proposals to support credit unions in today's budget will enhance competition and consumer choice in the banking sector.
In response to requests from CCUA and the credit union sector, the government signaled its intent to clarify the transitional assistance it is willing to offer to prospective federal credit unions.
"We are pleased that the government has listened to credit unions and pledged to create a more predicable path for those wishing to move to the federal level," said Martha Durdin, CCUA's president and CEO. "Clarity is critical for credit unions and their members as they consider navigating the transition in areas like deposit insurance where the federal regime differs from the provincial."
In 2014, the government announced its intention to provide temporary transitional supports for deposit insurance and a short-term funding facility to help credit unions manage the transition to become federal credit unions. However, following consultations last summer, no measures were announced. The absence of certainty has complicated and delayed decisions by credit unions to pursue the federal option that was first created in 2012. So far, only one provincial co-operative financial institution has issued notice of intent to become a federal credit union.
Today's budget indicates that clarity will be coming. "Recognizing that credit unions considering the federal framework may face transition challenges," the budget plan says, "the Government will propose legislative measures to provide targeted protection against transitional risks and facilitate a smooth entry process."
"We look forward to working with Minister Morneau and his officials in the months ahead to develop transitional measures that will serve the interests of those credit unions and their current and future members who opt to move to the federal level," Durdin added. "We join the government in its interest to support a robust credit union system across Canada, and look forward to making consumer-focused contributions to the 2019 Bank Act review."
About Canadian Credit Union Association
Canadian Credit Union Association (CCUA) is the national trade association for the Canadian credit union system. Canada's credit union system is a vital competitor in the financial services industry. CCUA represents 315 credit unions and caisses populaires (outside of Quebec) with more than $188.3 billion in assets and serving over 5.57 million members. For more information about Canada's credit unions visit www.ccua.com.