The Financial Services Regulatory Authority of Ontario (FSRA) continues to make the protection of credit union members’ deposits and the stability of the credit union sector a priority.
Ontario’s Credit Union sector is well capitalized and has strong liquidity, so it can provide financial products and services to consumers in a reliable manner, even in times of emergency. However, the COVID-19 pandemic has emphasized the importance of ensuring the safety, protection and availability of the assets that credit unions hold for liquidity purposes.
FSRA is proposing enhancements to its existing liquidity guidance, in order to better protect the assets that credit unions hold to satisfy potential liquidity needs. The proposed enhancements will ensure that the assets credit unions hold for liquidity purposes continue to be:
- available on demand; and
- protected from creditors of third parties.
We are seeking sector stakeholder and public input on the proposed enhancements to FSRA’s liquidity guidance for credit unions. We invite you to submit feedback on FSRA’s website until December 2, 2020.
FSRA is also pleased to advise that the Government of Ontario has agreed to provide an enhanced line of credit to FSRA, with a limit of $2B for a period of 12 months. Should extraordinary stress arise, which is not currently expected, the new credit facility will offer supplementary financing to FSRA. This will allow FSRA to continue to support viable credit unions that may be experiencing short-term liquidity stress, in order to protect depositors, and promote confidence in the sector.
Credit unions and caisses populaires may contact their Relationship Managers for additional details or any questions.