Credit Union / Caisses Populaires consultation summary report | Financial Services Regulatory Authority of Ontario

Feedback from the sector:

During the consultation period of October 10 to November 13, 2023, FSRA received 2 submissions from stakeholders in the Credit Unions sector on FSRA’s proposed Statement of Priorities for fiscal year 2024-25. The submissions and FSRA’s responses are available on FSRA’s website.

FSRA thanked all stakeholders that took the time to comment. FSRA carefully considered all feedback before finalizing and publishing the 2024-2027 Annual Business Plan.

Contributors to public consultation – Credit Unions sector:

The following stakeholders submitted comments on FSRA’s proposed SOP for fiscal 2024-25 for Credit Union items:

Organization	Stakeholder representative
1. Desjardins Group (“Desjardins”)	Giuseppina Marra
2. Canadian Credit Union Association (“CCUA”)	Brent Furtney

Financial plan

Stakeholder	Summary of Feedback	FSRA’s Response
Desjardins CCUA	A stakeholder noted that the operating costs for supervision of the sector are growing at a faster pace than inflation. More visibility on the reasons supporting the need for a fee increase. A stakeholder noted concern with the proposed 8.3% increase for 2024/25 budget. The stakeholder requested a better understanding of costs, timelines for initiatives and value being derived from investments to date. They commented that each item described in the priorities is high level, which does not expand on where dollars are being spent, or what value is being derived from the investment. It would be beneficial for the sector if FSRA would outline granular activities and expectations for the priorities.	FSRA thanks stakeholders for their comments and will continue to proactively manage its costs to ensure they are reasonable and commensurate with necessary regulatory efforts. FSRA projected a 1.4% increase in Variable Fee Assessment to CU sector from FY2023-24. At the same time, FSRA’s costs in this sector are expected to increase by 6%. FSRA will be able to keep the Variable Fee Assessment increase below its costs increases by proactively using the accumulated surplus. FSRA provided the CU Stakeholder Advisory Committee with a financial overview of the 2024/25 budget for the sector. This overview included cost allocations and expected value for key CU initiatives (i.e., each regulatory initiative, as driven by the Business Division). FSRA lacked more granular information to explain costs beyond that provided in the proposed budget.

Stakeholder

Summary of Feedback

FSRA’s Response

Desjardins
CCUA

A stakeholder noted that the operating costs for supervision of the sector are growing at a faster pace than inflation. More visibility on the reasons supporting the need for a fee increase.

A stakeholder noted concern with the proposed 8.3% increase for 2024/25 budget. The stakeholder requested a better understanding of costs, timelines for initiatives and value being derived from investments to date. They commented that each item described in the priorities is high level, which does not expand on where dollars are being spent, or what value is being derived from the investment. It would be beneficial for the sector if FSRA would outline granular activities and expectations for the priorities.

FSRA thanks stakeholders for their comments and will continue to proactively manage its costs to ensure they are reasonable and commensurate with necessary regulatory efforts. FSRA projected a 1.4% increase in Variable Fee Assessment to CU sector from FY2023-24. At the same time, FSRA’s costs in this sector are expected to increase by 6%. FSRA will be able to keep the Variable Fee Assessment increase below its costs increases by proactively using the accumulated surplus.

FSRA provided the CU Stakeholder Advisory Committee with a financial overview of the 2024/25 budget for the sector. This overview included cost allocations and expected value for key CU initiatives (i.e., each regulatory initiative, as driven by the Business Division). FSRA lacked more granular information to explain costs beyond that provided in the proposed budget.

Enhanced Data Collection

Stakeholder	Summary of Feedback	FSRA’s Response
CCUA	Priority 5.1: A stakeholder commented that FSRA should continue outreach with CUs that have not met with FSRA to prepare them for EDC in advance of summer 2024 transition. Sector should learn and get insights from data submitted to FSRA (i.e., sector briefs, webinars, reports etc.).	FSRA thanked the stakeholder for its submission and the support expressed for the key deliverables included in the proposed 2024-2025 Statement of Priorities and Budget. FSRA will continue its work with individual CUs in preparation for EDC implementation. Since May of 2023, FSRA has been working with credit unions individually through what is known as the “Data Mapping” process. This is an ongoing one-on-one interaction with credit unions through a series of regularly scheduled meetings to collaborate on all aspects of EDC including timing, data, and operational details. Credit unions were onboarded to the data mapping process in order of size and, to date, 41 credit unions are in the data mapping process with FSRA. The remaining credit unions will be added in the coming months at a cadence of approximately 2 per week. All credit unions, regardless of when they join the data mapping process, will be given the same amount of time to prepare for EDC as the go-live dates will be staged based on size.

Stakeholder

Summary of Feedback

FSRA’s Response

CCUA

Priority 5.1: A stakeholder commented that FSRA should continue outreach with CUs that have not met with FSRA to prepare them for EDC in advance of summer 2024 transition. Sector should learn and get insights from data submitted to FSRA (i.e., sector briefs, webinars, reports etc.).

FSRA thanked the stakeholder for its submission and the support expressed for the key deliverables included in the proposed 2024-2025 Statement of Priorities and Budget.

FSRA will continue its work with individual CUs in preparation for EDC implementation. Since May of 2023, FSRA has been working with credit unions individually through what is known as the “Data Mapping” process. This is an ongoing one-on-one interaction with credit unions through a series of regularly scheduled meetings to collaborate on all aspects of EDC including timing, data, and operational details. Credit unions were onboarded to the data mapping process in order of size and, to date, 41 credit unions are in the data mapping process with FSRA. The remaining credit unions will be added in the coming months at a cadence of approximately 2 per week. All credit unions, regardless of when they join the data mapping process, will be given the same amount of time to prepare for EDC as the go-live dates will be staged based on size.

Stability

Stakeholder	Summary of Feedback	FSRA’s Response
Desjardins	Priority 5.2: A stakeholder appreciated that the priorities focus on completing the transformation of the sector. This approach brought stability and gave CUs the capacity to better adjust their activities to new regulatory measures.	FSRA thanked the stakeholder for its submission and their support for the key deliverables included in the proposed 2024-2025 Statement of Priorities and Budget.

Ad hoc requests & workplan updates

Stakeholder	Summary of Feedback	FSRA’s Response
CCUA	Priority 5.2: A stakeholder commented that ad hoc data requests to sector should be added to workplan, when possible. Work plan should be updated and shared with the sector on an annual basis, as it has proven to be an effective document.	FSRA thanked the stakeholder for its submission. Once fully operationalized, an objective of the EDC project is to reduce demand for ad hoc data requests (i.e. instrument-level data can be used to achieve a multitude of purposes). Currently, ad hoc data requests are driven by various factors that are not always known in advance. FSRA endeavours to provide sufficient notice to CUs before ad hoc requests are made and provide a reasonable amount of time to satisfy the request. As noted to FSRA’s Technical Advisory Committee (“TAC”) on Regulatory and Supervisory Initiatives and to the Stakeholder Advisory Committee (“SAC”), FSRA intended to apply the work plan in a flexible manner. FSRA acknowledged that priorities are set on an annual basis and new initiatives, or alternate prioritization of existing initiatives, may be announced based on unforeseen circumstances. FSRA will revisit and update the work plan periodically, as necessary, and engage the TAC and SAC accordingly as part of that process.

Stakeholder

Summary of Feedback

FSRA’s Response

CCUA

Priority 5.2: A stakeholder commented that ad hoc data requests to sector should be added to workplan, when possible. Work plan should be updated and shared with the sector on an annual basis, as it has proven to be an effective document.

FSRA thanked the stakeholder for its submission.

Once fully operationalized, an objective of the EDC project is to reduce demand for ad hoc data requests (i.e. instrument-level data can be used to achieve a multitude of purposes). Currently, ad hoc data requests are driven by various factors that are not always known in advance. FSRA endeavours to provide sufficient notice to CUs before ad hoc requests are made and provide a reasonable amount of time to satisfy the request.

As noted to FSRA’s Technical Advisory Committee (“TAC”) on Regulatory and Supervisory Initiatives and to the Stakeholder Advisory Committee (“SAC”), FSRA intended to apply the work plan in a flexible manner. FSRA acknowledged that priorities are set on an annual basis and new initiatives, or alternate prioritization of existing initiatives, may be announced based on unforeseen circumstances. FSRA will revisit and update the work plan periodically, as necessary, and engage the TAC and SAC accordingly as part of that process.

Capital adequacy review and liquidity adequacy review

Stakeholder	Summary of Feedback	FSRA’s Response
CCUA	Priority 5.2: A stakeholder commented that they do not expect broad wholesale changes to the frameworks as sector was still adapting to the changes from 2022. Major changes to either framework will have a negative impact on CUs during a challenging economic period. Reviews should focus on understanding barriers and ways to enhance sustainable growth.	FSRA thanked the stakeholder for its submission and plans to review both frameworks and update elements as needed. FSRA will proactively engage with stakeholders to ensure sector feedback is considered throughout the review process.

Emergency liquidity assistance/ resolution and recovery plans

Stakeholder	Summary of Feedback	FSRA’s Response
CCUA	Priority 5.3: A stakeholder noted that FSRA should continue to support the sector in enhancing access to emergency liquidity funding. FSRA should also continue to offer direct feedback on how resolution/recovery plans can be improved in 2024 and onwards.	FSRA thanked the stakeholder for its submission and their support for the key deliverables included in the proposed 2024-2025 Statement of Priorities and Budget.

Deposit Insurance Reserve Fund (DIRF)

Stakeholder	Summary of Feedback	FSRA’s Response
CCUA	Priority 5.3: A stakeholder noted that they look forward to proactive discussions on the DIRF modelling process and the long-term strategy in 2024. They appreciated that FSRA was seeking to move DIRF modelling in house. Hopeful that this will increase transparency around modelling and create stronger sector related conversation on the future of the DIRF.	FSRA thanked the stakeholder for its submission and their support for the key deliverables included in the proposed 2024-2025 Statement of Priorities and Budget.