On August 19, CCUA submitted our response to the Office of the Superintendent of Financial Institutions (OSFI) consultation on its proposed Internal Liquidity Adequacy Assessment Process (ILAAP) guideline for deposit-taking institutions. CCUA expressed support for OSFI’s objective of strengthening liquidity risk management, while emphasizing the importance of a proportionate, practical, and principles-based framework that reflects the unique operating realities of federal credit unions.

The submission welcomes several aspects of the draft guideline, including OSFI’s recognition of proportionality, its phased implementation approach, and its acknowledgment that not all Pillar 2 liquidity risks will be relevant to every institution. CCUA is encouraging OSFI to clarify ILAAP’s role within existing liquidity risk management frameworks and avoid duplicative governance, reporting, or documentation requirements. ILAAP should help institutions assess and demonstrate liquidity adequacy by leveraging existing risk management practices, rather than requiring the creation of parallel processes that add administrative burden without improving prudential outcomes.

CCUA’s response also highlights the distinct funding and liquidity characteristics of federal credit unions, which often rely on stable member deposits, maintain traditional balance sheets, and have limited reliance on complex wholesale funding markets. The submission calls on OSFI to allow institutions to demonstrate the resilience of these funding models using appropriate evidence, historical experience, internal analysis, and management judgment. CCUA is also seeking greater clarity regarding the treatment of contingency funding sources, including liquidity arrangements provided through centrals, cooperative system networks, committed facilities, and other established liquidity resources.

The submission’s key theme is the need to make proportionality more practical in application. CCUA recommends that proportionality extend beyond the scope of risks assessed to include governance expectations, documentation requirements, modelling approaches, reporting obligations, and supervisory assessment processes. The submission also suggests that OSFI consider providing additional implementation guidance, illustrative examples, and risk-based reporting expectations that better align with the size, complexity, and risk profile of smaller institutions.

Finally, CCUA supports OSFI’s proposed phased implementation approach and encourages ongoing engagement with industry throughout implementation. The submission notes that federal credit unions may need to balance ILAAP implementation alongside other regulatory initiatives and would benefit from continued flexibility as expectations are finalized and operationalized. To read the full submission, please click here or view it below.