Credit unions seek to level the playing field with banks as Ontario reviews financial services rules
Credit unions are looking to level the playing field with the big banks, such as getting powers to grant students loans, as the Ontario government begins a review of legislation governing the sector serving 1.6 million customers in the province.
“We can offer pretty much any service you get at a chartered bank,” Kelly McGiffin, chief executive of Hamilton-based First Ontario Credit Union, said at a news conference with finance minister Charles Sousa on Thursday.
The exceptions, aside from student loans, include restrictions on taking deposits from municipalities, school boards, universities and hospitals. Credit unions hope these will be eased.
Credit unions also want the ability to own a larger than 30 per cent share of subsidiaries such as insurance brokers to improve their own bottom lines, and seek to increase the $100,000 ceiling on deposit insurance by paying higher premiums to the Deposit Insurance Corp. of Ontario.
They are also asking for an end to a prohibition that prevents buyers of properties sold by municipalities for non-payment of taxes from writing cheques certified by credit unions. As regulations now stand, such cheques can only be certified by banks.
Sousa said financial services regulations need to be “nimble and responsive” in the global economy and acknowledged the concerns raised by credit unions seeking to be more competitive.
“We will be addressing them and reviewing where we go next,” he told reporters.
Sousa appointed his parliamentary assistant, MPP Laura Albanese (York South-Weston), to lead the review of the 1994 Credit Unions and Caisses Populaires Act and report back by next fall after consultations with stakeholders across Ontario.
“It’s important to have the right rules,” said Albanese, who has served as chair of the legislature’s finance committee.
The credit unions act is reviewed every five years. Ontario has 104 credit unions — including 25 in communities where there are no banks or other financial institutions — employing about 6,000 people.