That’s a Wrap! 2023 Hike the Hill Highlights
Credit union leaders across Canada travelled to Ottawa for CCUA’s annual Hike the Hill and Government Relations Forum on November 22 and 23. Since 2009, Hike the Hill has allowed legislators to hear directly from credit union leaders about the sector’s successes and ways credit unions can work with the government for better public policy outcomes. During Hike the Hill, passionate credit union leaders met with over 40 legislators from across the political spectrum to advocate for a legislative environment conducive to ensuring competition in the financial sector to the benefit of all Canadians.
Watch a video highlight of the event here
Fall Economic Statement
On November 21, Minister Freeland presented the fall economic statement. There were several major announcements related to financial sector policy in the statement, including expanding Payments Canada membership to credit unions and the creation of a new Mortgage Charter.
The Minister also announced that an open banking regime will be included in the 2024 federal budget in a few months, the proposed details of which are outlined here.
More details about announcements of significance to credit unions can be found here.
If you have any questions, please contact Rachel Barry.
Fall Economic Statement and Budget Act
On November 28, the Minister tabled the Fall Economic Statement Implementation Act to legislatively implement announcements from the Fall Economic Statement and Budget 2023. The bill is over 500 pages long and has many items relevant to credit unions outlined below.
Included in the Act is the updated definition of credit union in the Income Tax Act. This was first promised in Budget 2023 and is a huge advocacy win for the sector. This will save credit unions hundreds of millions of dollars in future tax liabilities.
The Act will also allow virtual meetings for federally regulated financial institutions, another advocacy priority for the sector, bringing federal legislation in line with most provinces.
Another CCUA advocacy priority included in the Act is changes to Payments Canada, allowing credit unions to become direct members.
Other legislative changes in the Act include strengthening Canada's AML/ATF Regime, changes to the Competition Act, and the creation of the Department of Housing, Infrastructure & Communities.
The Act is a substantial piece of legislation. As the CCUA advocacy team continues its analysis of the Act, an in-depth analysis will be released before end of year.
For more information, or if you have any questions, please contact Rachel Barry.
Open Banking in the Federal Fall Economic Statement
Yesterday’s federal Fall Economic Statement included long-awaited news on open banking, specifically, that legislation will be introduced in next year’s budget to create an open banking framework. The government aims to adopt legislation and fully implement the governance framework by 2025. The announcement was also followed by a policy statement that contained additional information relating to the framework. The highlights are summarized below.
The aim of the legislation will be to:
- Codify key elements, including scope, common rules for liability, privacy, security, accreditation, and management of technical standards;
- Scope refers to what entities can participate, the breadth of data that must be shared among them, and functionality (e.g., read or write access).
- The framework would set out the process and specific criteria for data requestors to access consumer financial data. An accrediting body then evaluates applications against the framework’s criteria and publishes a list of all accredited organizations in a central registry.
- Mandatory reporting of key information regularly will be mandatory to maintain accreditation.
- Tiered accreditation would not be included in the initial phase but may be considered once the framework is established.
- Participants of the framework would be required to comply with applicable legislative frameworks. Additional privacy rules would also need to be enacted that are unique to financial data sharing, specifically around consent to access.
- Mandate responsibility to a government-led entity for monitoring and supervising the system, enforcing common rules, accrediting, defining and updating technical standards.
- Address liability among industry participants.
- Rules on liability will be based on the principle that liability moves with the data and rests with the party at fault if anything goes wrong. Entities would also be required to implement internal policies and procedures for complaint handling and provision of redress.
- Organizations other than federally-regulated financial institutions and credit unions (given their mature risk management regimes overseen by prudential regulators), would be required to demonstrate they can protect consumer data and meet security requirements as part of the accreditation process and ongoing reporting obligations.
- The use of a single technical standard will be mandated and legislation will set out principles and oversight of the technical standard. Government will be consulting with industry and international partners on this.
Participation for federally-required financial institutions that meet a specific threshold for retail volume will be required to participate initially, with remaining federally-regulated financial institutions, credit unions, and accredited third parties to opt-in to the framework if they wish. As expected, it has been confirmed that federally-regulated banks, credit unions, and provincially-regulated credit unions would be exempt from accreditation.
The policy statement also notes that it will continue to engage with industry, federal regulators, provincial governments, and other stakeholders.
CCUA would like to extend our deep gratitude to our national and provincial open banking committees for the immense time and work these groups have provided since they were created in July 2022. CCUA will continue to engage these groups as the government develops legislation on the framework and consults with industry.
If you have any questions, please contact Sabena Sandhu.
LCUC’s Open Banking RFP – Partner Selection Announcement
Following [SS1] a rigorous RFP process spearheaded by the LCUC CIO group, Caspian One was selected as the preferred partner to deliver an Open Banking solution tailored to the credit union system in Canada. As a result, a collective of 10 large credit unions, comprised of both LCUC and non-LCUC participants, have committed to partnering with Caspian One to develop a customized version of their Open Banking platform that meets the unique needs of the credit union system. Credit unions of all sizes are invited to join this collaborative effort and leverage the Caspian One platform. The LCUC and Caspian One will be hosting a webinar on December 12th, 12:00 PM –1:30 PM ET, to demonstrate the solution, answer any questions you may have, and provide details on how your credit union can get involved.
Additional details about the RFP process and the proposed open banking solution are available here, including the value proposition of the Caspian One platform, benefits from credit unions aligning around a common solution, inclusivity for smaller credit unions, and more.
Call for Projects – Low Carbon Economy Fund
Environment and Climate Change Canada (ECCC) is pleased to announce the launch of a new intake of the Low Carbon Economy Challenge!
If you are interested in advancing climate action and have a project idea that will help Canada reduce its greenhouse gas emissions, please visit the program webpage for information on how to apply. The Challenge Fund application period will open on November 7th, 2023. The application submission deadline is February 8th, 2024, at 8:00 PM Eastern Standard Time (EST).
ECCC will hold two webinar sessions to share information about the application process and to answer applicant questions. The same material will be presented at both sessions. A recording of the webinar will be available on the Challenge web page after the first live session. The first webinar will take place on November 28th, 2023 (English) and November 29th, 2023 (French) from 1:00 PM to 2:00 PM Eastern Daylight Standard Time (EST). The second webinar session will take place on January 16th, 2024 (English) and January 17th, 2024 (French). Instructions for accessing the webinar will be available shortly.
Please click here for more information.
OSFI’s E-21: Operational Resilience & Operational Risk
CCUA is seeking your feedback on our proposed response to OSFI’s updated draft guideline E-21: Operational Resilience & Operational Risk.
Please click here for our proposed response in bullet form. We welcome your feedback by Wednesday, December 13.
OSFI’s E-23: Model Risk Framework
On October 20th, OSFI launched its consultation on an updated draft guidance E-23: Model Risk Management.
This draft builds on a 2022 consultation that expanded the guideline’s applicability from a sole focus on capital calculation and risk management for deposit-taking institutions to include forecasting economic conditions, estimating financial risks, pricing products, and optimizing business strategies. It also responded to an increased reliance on AI/ML models in financial services, as well as the number and variety of stakeholders that continue to increase over the model lifecycle.
The 2023 draft incorporates feedback from last year’s consultation and now includes models used for non-financial risks such as climate, cyber, tech, and digital innovation risks, and is intended to adopt a flexible and principles-based approach through a Model Risk Management (MRM) framework.
Please see the appendix of CCUA’s system brief for a summary of feedback received in 2022 and questions for the current consultation. We welcome feedback by Wednesday, December 13.
2024 Annual Economic, Policy, and Social Outlook Webinar
The Canadian Credit Union Association (CCUA) is delighted to host its fourth annual 2024 Economic, Policy, and Social Outlook webinar on Thursday, December 7, 2023, from 1:00 p.m. - 2:15 p.m. ET. This special virtual event will feature presentations from subject matter experts on the Economic and Policy Outlook as they explore the challenges and opportunities facing business leaders in the coming year. This year's Social Outlook will focus on Newcomers to Canada. Our panelists will share their expertise and views on newcomer demographics, the financial challenges new Canadians face, and how credit unions can support these communities while growing their membership. Register online: 2024 Economic, Policy and Social Outlook - Canadian Credit Union Association (ccua.com)
OSFI Consulting on Disclosure of Crypto-Asset Exposure
OSFI is looking for feedback on the public disclosure of crypto-asset exposures by federally regulated financial institutions in Canada. Running in parallel to this consultation is the Basel Committee on Banking Supervision (BCBS) consultation, also on crypto asset disclosures for internationally active banks. OSFI intends to combine the feedback received from this consultation with the BCBS and develop public disclosure expectations for banks and insurers in Canada. Please see here for additional details.
If you have any questions, please contact Sabena Sandhu.
Bank of Canada Releases Report Summarizing Consultation Feedback
In the Spring of 2023, the Bank of Canada released a public survey on the concept of a Digital Canadian Dollar. Based on the feedback received, the Bank of Canada has released a ‘what we heard’ report.
Highlights of the report are below:
- Financial sector stakeholders generally wanted more concrete details about how a digital dollar would work so they could better understand the potential impacts on their business models and overall financial stability.
- Focus group participants largely accepted the potential need for a digital dollar in the future but wanted more information on how exactly it would work.
- Civil society groups mainly supported a digital dollar if its design would remove existing barriers to accessibility and financial inclusion.
- Respondents to the public questionnaire were largely opposed to a digital dollar and the Bank of Canada researching it. They were concerned about the impacts that a digital dollar could have on their rights.
CCUA participated in this survey via a written submission in the Spring, and also participated in a wider consultation with the Department of Finance on the Digitalization of Money last year.
The Bank of Canada will continue to engage with stakeholders to prepare for the possibility of a digital dollar. The Bank notes that there will be additional opportunities for Canadians to provide input on this possible development.
The Bank of Canada’s Engagement Plan on a Digital Canadian Dollar Webinar
Join us on December 6th at 11 am to listen to the Bank of Canada’s engagement plan on a digital Canadian Dollar following its public and stakeholder consultations on a Centralized Bank Digital Currency (CBDC). The webinar will provide insights into the BoC’s policy thinking and next steps. The webinar will include a Q&A – please submit your questions ahead of time to governmentrelations@ccua.com
Upcoming CLA Leadership Summit Event
The Canadian Lenders Association will be holding a summit event that CCUA members can attend at a discounted rate. For more information, please see below:
- The Bankers Summit is happening on May 15th, 2024. Join over 500 banks, credit unions, and fintechs to network, build partnerships, and hear topics like Core Modernization, BaaS, Embedded, Sustainable Finance, and more. Click here to register now.
All CCUA members can attend the CLA event at the same discount as a CLA member. The code is CCUAmember for 30% off. Note: All CCUA members can attend the CLA Leadership Summits without becoming CLA members.