Regulators in New Brunswick are working on reforms intended to streamline the regulatory framework for credit unions in the province.
The Financial and Consumer Services Commission (FCNB) announced Wednesday that it is working with the industry and other regulators — including the trade association for credit unions, Atlantic Central, the Risk Management Agency (RMA), and the N.B. Credit Union Deposit Insurance Corp. — on a proposal to modernize the regulatory framework for its credit union system.
In particular, regulators are seeking to craft a legislative proposal that would streamline and consolidate the regulatory framework to make it more proportionate to the size of the credit union system in the province.
“The objective is to reduce the regulatory burden and cost to the credit unions without diminishing oversight and continue to provide deposit protection to credit union members,” says Rick Hancox, CEO, FCNB, in a statement.
The current structure was designed in the early 1990s when the credit union and caisses populaires systems were both provincially regulated, the FCNB notes, However, since the caisses populaires system transferred to federal jurisdiction in 2016, the regulatory framework is now disproportionate to the size of the provincial credit union system.
Currently, there are three organizations overseeing the province’s credit union system, including: the FCNB, the RMA and the deposit regulator. “A restructured regulatory framework is needed to assist credit unions in their long-term sustainability and competitiveness,” the FCNB says.
A new, streamlined model is expected to consolidate of all of the regulatory functions under the Superintendent of Credit Unions, and to consolidate the stabilization fund and the deposit insurance fund into a single deposit protection fund. The consolidated model would be under the oversight of the FCNB.
A legislative proposal to implement the new model is expected to be completed next year.
“At the end of the process, we want to have a regulatory model that is modern, streamlined and effective; one that does not place an unnecessary cost burden on credit unions,” says Michael Leonard, CEO of Atlantic Central, in a statement.