OTTAWA, Canada (7/9/12)--New regulations will allow Canadian credit unions to expand beyond provincial borders and compete with big banks, Canada's federal government said Friday.
The announcement was made Thursday by Canadian Federal Finance Minister Jim Flaherty, as the government released proposed regulations that could help create large credit unions and allow them to level the playing field with Canadian banks (The Globe and Mail and July 6).
"Credit unions are used by millions of Canadians for financial services similar to those offered by large banks," Flaherty said in a statement. "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."
Under the proposed regulations, the government would provide the option to become federally incorporated to provincially regulated credit unions, which would give them the means to better conduct business across provincial borders (Postmedia News July 6).
"Credit Union Central of Canada supports the availability of a federal option for credit unions," Gary Rodgers, vice president, Financial Policy, Credit Union Central of Canada, said in a statement. "We welcome today's announcement as another step toward enabling credit unions to choose a new option to address growth opportunities and enhance service to their members."
Canada's financial industry will have 30 days to comment on the proposed regulations, which were first announced and considered in a 2010 budget.
If the proposal takes effect, credit unions would be placed under the purview of the Office of the Superintendent of Financial Institutions.