Purpose of consultation

The Financial Services Regulatory Authority of Ontario (FSRA) is taking steps to promote reasonable and prudent credit union commercial lending practices to ensure that their members are protected.

The Commercial lending Guidance (the Guidance) establishes outcomes credit unions (CUs) must achieve for FSRA to conclude that the credit union is in compliance with applicable requirements under the Credit Unions and Caisses Populaires Act, 2020 (CUCPA 2020) and Rule 2021 – 001 Sound Business and Financial Practices (the SBFP Rule).

 The Guidance outlines the respective responsibilities of a CU’s Board and Senior Management to:

  • develop and maintain policies, standards, and procedures for commercial lending activities
  • manage and protect the systems and technology needed for commercial lending activities
  • manage and mitigate associated commercial lending risks effectively

Outcome of consultation

As a result of the consultation, the following changes have been reflected in the final version of the Guidance:

Section Original Wording Revised Wording

Approach to Principle 1 – Credit Decision Making Process

As a prudent practice an independent third-party conducting a review of the Commercial Loan file will arrive at the same credit decision by replicating all aspects of the underwriting criteria.

As a prudent practice occasional reviews should be conducted by a qualified and sufficiently independent individual on a sample basis and where risks are rising, to confirm the credit decisions as determined by the original adjudication process by replicating:

  • all aspects of the underwriting criteria for a commercial loan
  • the time period during which the commercial loan was approved and funded

Approach to Principle 1 – Property Appraisals

...specifies which of the three, or a combination of the valuation approaches of a commercial property appraisal should be used i.e., a direct comparison of market value, income, or cost to replace approach.

...specify which commercial property valuation approach, or combination of approaches, is appropriate and prudent in particular circumstances (i.e., a direct comparison of market value approach, income approach and/or cost to replace approach).

Approach to Principle 1 – Re-Evaluation

...provide for the re-evaluation of collateral upon review, renewal and/or due to early warning indicators.

...provide for the type of re-evaluation of collateral upon review, renewal and/or due to other risk indicators.

Feedback from the sector:

FSRA received 5 submissions with feedback on the Guidance during the consultation period, which began on January 3, 2024 and ended on March 1, 2024. The submissions and comments are also available on FSRA’s website.

FSRA thanks all commenters. FSRA carefully considered all comments before finalizing and issuing the Guidance.


The following stakeholders took the time to share their perspectives with FSRA:





Mainstreet Credit Union (MCU)

Sandy Ferguson, Chief Financial Officer


DUCA Credit Union

Riz Ahmad, Chief Risk Officer


Meridian Credit Union

John Trivieri, Chief Risk Officer


Canadian Credit Union Association (CCUA)

Brent Furtney, Regional Director, Ontario Government Relations


Desjardins Ontario Credit Union

Giuseppina Marra Senior Director, Regulatory Relations

Feedback summary and FSRA’s responses: