Ontario’s new legislation modernizing the existing framework for the credit union sector across the province has come into effect, the Ministry of Finance announced.
The Credit Unions and Caisses Populaires Act, 2020 aims to reduce the regulatory burden for credit unions, increase their business and investment powers, and improve consumer experience and protection. The new legislation was first introduced in the 2020 Budget and replaced the Credit Unions and Caisses Populaires Act, 1994.
“Now more than ever is the time to ensure that the credit union sector is healthy, strong and competitive – and not constrained by outdated or overly prescriptive legislation and regulations that limit its growth opportunities,” Minister of Finance Peter Bethlenfalvy said. “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.”
In particular, the new legislation removes current restrictions limiting credit unions’ ability to invest and offer services to consumers. It also permits the sale of property and casualty insurance in branches and online to allow insurance intermediaries and credit unions to build mutually beneficial business relationships that reduce costs and increase competition.
The new legislation authorizes the Financial Services Regulatory Authority of Ontario (FSRA) to operate as a principles-based regulator to ensure a more stable credit union industry. Moreover, it enables the FSRA to exercise oversight powers through an industry-led market code of conduct and improved compliance regime to enhance consumer protection.
“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 Canadian Credit Union Association President and CEO Martha Durdin.