ID
2022-014

Type
Policy
Sector
Credit Unions and Caisses Populaires
Status
Public comment closed
Date
Comment Due Date

Thank you for providing your feedback on FSRA’s Proposed Differential Premium Score (DPS) Methodology for Credit Unions Differential Premium Score (DPS) Methodology for Credit Unions.

The request for submissions is now closed.

We appreciate the comments and questions received to date. Your feedback will help to inform our final methodology; stay up to date on our newsroom. Follow us on LinkedIn and subscribe to our mailing list for quick updates. 

FSRA is proposing updates to the way it calculates annual deposit insurance premiums for credit unions.

This new approach would make the premiums more equitable, and fair by linking the “riskiness” of an individual credit union with the level of deposit insurance premiums paid by that credit union. It would also recognize the changes arising from the implementation of the Risk Based Supervisory Framework and the adoption of three new FSRA rules.

The Deposit Insurance Reserve Fund (DIRF) is funded through deposit insurance premiums that credit unions pay to FSRA and is designed to protect the deposits of credit union members.

To help inform this work, FSRA is seeking sector input into the proposed new approach. The consultation paper with questions for stakeholders is now open for feedback until January 23, 2023.

FSRA is planning a transition period for implementing any changes until all institutions are assessed under the Risk Based Supervisory Framework at least once.

FSRA consulted the DIRF Technical Advisory Committee and thanks the Committee for their input.

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Before we begin, please make sure you do not include any personal or private financial information. If your inquiry does require this information be shared with us, please call us at 1-800-668-0128 or email us at [email protected] for instructions.

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Sector Comment Date posted
Credit Unions and Caisses Populaires
[2022-014] Ron Smith - Talka Credit Union Limited
Talka's regulatory capital consists of 91.7% Retained Earnings resulting in 11.15% of RWA. When I compare the premium calculations to the closest in the DIRF proposal, it doesn't appear to be equitable to cap the Retained Earnings % at 5.5%. FSRA should be providing more incentives to credit unions to increase the quality of their capital as much as the quantity of capital. For example, in comparison to the Credit Union in column C, Talka has almost twice as much Retained Earnings and only 1.1% or less than 1/10th of the total Capital. Yet the Column C credit union would pay a lower premium all things being equal (ORR & IL).

Perhaps increasing the cap on the RE % of RWA from 5.5% to 7.5% and modifying the tables accordingly would provide incentives to credit unions to improve their quality of capital (see attached table which includes Talka's projected premium).
Credit Unions and Caisses Populaires
[2022-014] Janet Johnson - Libro Credit Union
Thank you for the opportunity to provide feedback on the DPSM. Please see our formal response to the posed FSRA questions, as well as additional commentary attached.

Regards.
Credit Unions and Caisses Populaires
[2022-014] Canadian Credit Union Association
Please find attached submission on behalf of the Canadian Credit Union Association
Credit Unions and Caisses Populaires
[2022-014] Sunny Sodhi - Meridian Credit Union
Please see attached Meridian Credit Union's submission on the Proposed Differential Premium Score Methodology for Credit Unions.
[2022-014] Giuseppina Marra - Desjardins Group
Mr. Mark White
Chief Executive Officer
Financial Services Regulatory Authority of Ontario
5160 Yonge Street, 16th Floor
Toronto, Ontario M2N 6L9
______________________________________________
Desjardins Group submits for the attention of the Financial Services Regulatory Authority of Ontario its comments as part of its consultation on FSRA's proposed Differential Premium Score (DPS) Methodology for Credit Unions.
For any additional information, do not hesitate to communicate with the undersigned.
Best regards.
Giuseppina Marra
No questions have been asked about this consultation yet.