Surrey, B.C.-based Coast Capital Savings Credit Union (CU) has launched an effort to expand coast-to-coast as Canada’s second national CU.
Before that can happen, though, Coast Capital, which is already Canada’s third-largest CU with approximately 532,000 members and more than $17 billion in total assets under administration (AUA), needs approval of at least 66.7% of its membership in a six-week special resolution vote that began Oct. 17 and runs until Nov. 28.
Coast Capital has been studying the option of becoming a national CU for the past 18 months. The move would enable the firm to strengthen itself and better respond to its members’ changing needs by bringing them new products and delivering new online banking and mobile technologies faster than ever before, which are particularly important for millennial and next-generation customers, says Don Coulter, president and CEO Coast Capital.
“It doesn’t make sense for our business to have to stop at the Alberta border,” he explains. “We believe becoming a federal credit union will be good for our employees, our members, our business and the communities we serve.”
CUs in Canada were only allowed to do business in their home provinces until 2012, when the federal government amended regulations for the federal Banking Act. This allowed CUs to register federally under regulation by the Office of the Superintendent of Financial Institutions (OSFI).
Under the new rules, the first federal CU in Canada was created this past July when Caraquet, N.B.-based UNI Financial Co-operation received approval from its members and obtained a federal charter.
“We believe this is the right decision for Coast Capital members, and the board is recommending that members vote yes,” says Bill Cooke, chairman of Coast Capital’s board of directors. “We encourage members to get informed and cast their ballot to determine the future of our credit union. For four years we’ve been surveying members about this opportunity and each survey has shown strong support for Coast Capital becoming a federal credit union.”
However, membership approval of the special resolution doesn’t guarantee that Coast Capital will automatically become a federal CU. It will also need approval from federal regulators such as OSFI, the federal government as well as the B.C. Financial Institutions Commission. The earliest it expects to begin operating nationally, if all approvals are given, would be 2018.
“If Coast Capital becomes a federal credit union, then day-to-day, you won’t notice much of a difference in how we operate,” said pamphlet sent to all members said. “There will be a change in deposit insurance coverage, but the deposits currently held by 96% of our personal members would be fully covered by the Canada Deposit Insurance Corp. We’ll offer the same signature products and services, just in more places.”
Coast Capital members’ deposits are currently insured by Credit Union Insurance Corp., which performs the same service for all CUs in British Columbia. In total, there are 42 credit unions in B.C. with $71 billion in AUA.
Results of Coast Capital’s special resolution vote will be announced at a special general meeting in Surrey on Dec. 14.
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