TORONTO-Canada has its first federally chartered credit union. The charter comes four years after the federal government in 2012 created legislative framework that will allow for the establishment of federal credit unions.
UNI Financial Corp. said it will become the first Canadian credit union to take advantage of the new charter option. Previously, all credit unions in Canada were chartered at the provincial level.
"On behalf of Canada's credit unions, the Canadian Credit Union Association congratulates and supports the efforts of UNI Financial Cooperation," said Martha Durdin, president and CEO, Canadian Credit Union Association, in a released statement. "Becoming a federal credit union is an important strategic option and allows Canadian credit unions and caisses populaires to better align their capital and liquidity requirements with their risk, which result in efficiencies that benefit both members and local communities."
To take advantage of the federal credit union option, UNI merged into one institution with 51 branches around the province of New Brunswick, according to the CCUA. Federal incorporation also means that deposit insurance coverage will switch from the provincial to the federal deposit insurer.
"A federal credit union charter supports the growth and expansion of the Canadian credit union system, and helps make credit unions and caisses populaires more competitive with banks – which is another important consideration," added Ms. Durdin.
The CCUA, formerly branded Credit Union Central of Canada, said it represented credit union interests in working with the federal government and Department of Finance for more than two years to ensure the necessary steps would be taken to proclaim the federal credit union legislation into force. The CCUA represents 306 credit unions and caisses populaires (outside of Quebec) with more than $190.7 billion in assets and which serve more than over 5.6 million members.