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Latest news from Advocacy and Government Relations

August 9, 2018

Marc-Andre Pigeon, AVP Government Relations, Canadian Credit Union Association

Unclaimed Balances:
CCUA is looking for input into its response to a federal Department of Finance consultation on proposed changes to the policies that govern deposit balances at federally-regulated banks/trust companies (FRFIs) that have been dormant for more than 10 years. The unclaimed deposit balance proposals bear directly on federal credit unions but may also exert some influence on provincial policymakers. Among other things, the Department is proposing to:

  • require federally-regulated deposit-taking entities to provide more information than is currently the case to the Bank of Canada (which receives unclaimed balances). This information could include for example a social insurance number, date of birth, signature card or business number;
  • impose requirements on FRFIs to communicate through means other than by physical mail with inactive account holders including, for example, via electronic mail;
  • extend unclaimed balance practices to accounts holding foreign currency deposits;
  • establish a “reasonable threshold” for “small balances” – for example, under $100 – and to shorten the prescribed inactivity period to something less than 10 years;
  • reduce or eliminate the current requirement to pay a 1.5 per cent interest rate on unclaimed balances while maintaining the current policy of no administrative fees;
  • allow exiting financial institutions to transfer outstanding unclaimed balances – regardless of dormancy duration – to the Bank of Canada.
The unclaimed balances consultation closes August 21. Please share any comments on this consultation with Marc-Andre Pigeon at by no later than August 16.

Canadian Payments Act:
In 2015, the Government of Canada made several changes to the Canadian Payments Act to reform the governance and oversight framework of Payments Canada. Earlier this year, as required under the Act, the Department of Finance launched a review the Act to ensure that the 2015 changes are having the intended effects. CCUA in partnership with the Group Clearer responded to this consultation on behalf of the credit union system. This joint response can be found online here.

Basel III:
Late last year, the Basel Committee on Banking Supervision (BCBS) issued the last part of its Basel III reforms, a set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. Of particular interest to credit unions given their reliance on loans as a source of income, the finalized rules set out the BCBS’s suggested risk weights for a variety of loan products, including mortgages (residential, commercial), other retail exposures, and credit cards. Last month, the Office of the Superintendent of Financial Institutions (OSFI) released a consultation document outlining how it plans to implement this final package of reforms. For the most part, OSFI is proposing to adopt the vast majority of these reforms with a few exceptions, notably in the area of credit risk. The Consultation closes August 31. Please share any comments on this consultation with Marc-Andre Pigeon at mpigeon@ccua.comby August 24.

Canadian Securities Association – Proposed National Instrument 93-101 Derivatives:
The Canadian Securities Association (CSA) is in the field with a second round of consultations around proposed market conduct rules for entities that deal in derivative products (e.g., foreign exchange hedges that extend out more than two days). The proposed instrument – which will likely come into effect in 2019 or 2020, could involve significant regulatory burden for credit unions.

In response to the first round of consultation last summer, CCUA stressed that the vast majority of credit unions should qualify for the “end user” exemption since their use of derivatives is tied strictly to hedging their own assets/liabilities and not sold to members. CCUA also sought a de minimis exemption for those very few credit unions that do make available derivative products directly to members (who are the end-users in these cases).

While the second-round consultation did not provide this de minimis exemption, it does give some additional clarity around the end-user exemption for those credit unions that do not provide products to their members (engage strictly in hedging their own book). CCUA is working with treasury personnel from credit unions and centrals as well as an experienced lawyer from the law firm Borden Ladner Gervais to help develop its response to this second-round consultation. Credit unions are encouraged to share their thoughts on the proposed market conduct rules with Brenda O’Connor at