OTTAWA – Canada’s national credit union lobby last week urged MPs to reject suggestions that Ottawa give up its power to regulate regional credit union centrals.
Bill Knight, president of Credit Union Central of Canada, told the Commons finance committee Sept. 24 that provincial regulation of regional centrals would deprive the credit union movement of a powerful tool.
It was recommended in a federal discussion paper earlier this year on how to reform regulation of financial institutions.
“The credit union system believes that federal regulation provides a common bond in an increasingly borderless world,” Knight told MPs.
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He also argued for:
- More flexible rules# to allow Canadian and regional credit union centrals to offer retail financial services.
- New investment rules that would allow national, regional or local credit unions to band together to own businesses such as credit card subsidiaries. Current rules require ownership by either national or regional centrals, a restriction that Knight called difficult.
Individual credit unions are regulated provincially, but work through credit union centrals for out-of-province dealings.
Knight said the same points have been made to finance department officials and they appear flexible, although the department has not agreed yet to change the rules.
MPs seemed receptive to the message.
Finance committee chair Jim Peterson said he will watch the result of credit union negotiations with the finance department. “We will want to hear the reasons from finance if they do not accept your proposals.”
Reform party finance critic Monte Solberg said he hopes the finance department is sympathetic because a strong credit union movement will increase competition in Canada’s financial services business.
National Credit Union Central chair Robert McVeigh told MPs the movement has more than 1,900 outlets and more than $44 billion in assets across the country. It represents credit unions everywhere in Canada except Quebec, where the provincial Dejardins movement is provincially regulated.
He said more than 18,000 Canadians work for credit unions.
In British Columbia and Saskatchewan, credit unions hold 26 and 30 percent of market share.
