Letter to the Credit Union Central of Canada
Chief Executive Officer
Credit Union Central of Canada
151 Yonge Street
Toronto, ON M5C 2W7
Dear Mr. Phillips:
I am writing to update you on the recent developments related to the federal credit union framework (“the federal framework”).
Canada is home to a strong financial sector, including credit unions that want to offer Canadians innovative products and services and support their members across Canada. The federal framework, which came into force on December 19, 2012, was designed specifically for that purpose.
A number of credit unions have expressed interest in using the federal framework. They have also indicated that there are challenges in moving from provincial regulation to federal standards, stemming from differences in provincial and federal deposit insurance coverage. Some provinces also have different rules relative to the federal regime pertaining to insurance networking.
To mitigate these challenges, the federal Government will provide temporary transitional support to eligible provincial credit unions moving to federal regulation by offering extended deposit insurance and a short term funding facility, as well as an extended transition period to comply with federal insurance networking rules.
The Department of Finance will work with the credit union industry to develop terms and conditions for these support measures as the continuance process advances.
I look forward to working with your organization as we calibrate federal support.
James M. Flaherty