The Financial Services Regulatory Authority of Ontario (FSRA) has resumed oversight of the day-to-day operations of PACE Credit Union (PCU) following the resignation of “several” PACE directors, according to a release.
In September 2018, PACE was placed into administration by FSRA’s predecessor due to “mismanagement and misconduct by members of senior management and a lack of effective governance by the PCU Board,” the release said.
In a first step toward regaining member-controlled governance, PACE elected new directors in January 2020. In April, PACE hired new senior management, and oversight of PCU’s day-to-day operations was given to the new PACE leadership team.
On Friday, FSRA announced it had concluded an investigation into misconduct related to PACE’s sale of preferred shares to PACE members from July 2017 to June 2019.
FSRA determined, and PACE agreed, that the sales breached the Credit Unions and Caisses Populaires Act. According to the release, there was no consensus between FSRA and PACE on how to address those breaches, which ultimately led to the resignation of PACE’s directors.
The resignations included PACE’s CEO and chief risk officer, according to the release.
“The Board of PACE inherited problems created by the former PACE leaders, and worked hard to identify and resolve them — and I would like to thank the Board members for their leadership during this difficult time,” Mark White, CEO of FSRA, said in a statement.
FSRA will be working with stakeholders to return PACE to member-controlled governance. The release said a members’ meeting will be organized in the near future.
“I want to reassure members of PACE that their deposits are protected through the deposit insurance reserve fund administered by FSRA,” White said. “PACE will be open for business as usual on Monday and I expect it will continue to serve [members’] needs.”