TORONTO – The Finance Ministry last week proposed regulation that would allow credit unions to be regulated at the national level and to operate across Canada and beyond their current provincial boundaries.
The proposal, issued for a 30-day comment period, would promote greater competition between credit unions and the nation’s handful of banks.
“Credit unions are used by millions of Canadians for financial services similar to those offered by large banks,” said Finance Minister Jim Flaherty. “The proposed regulations will give credit unions the flexibility they require to grow beyond their provincial borders....as a result of these changes, [they] will be able to improve the services they offer.”
Until now, credit unions have been regulated provincially, meaning the vast majority of them operate only in one province, or set up sister operations in neighboring jurisdictions if they want to move beyond provincial boundaries. Some credit unions have pushed in recent years to have the choice to incorporate federally, which would make it easier for them to expand. For example, some of British Columbia’s largest credit unions have eyed the Alberta market as a way to increase their membership.
Credit Union Central, the national association representing 368 credit unions with $140 billion in assets, said the changes, if adopted, will allow its members to grow and expand services.