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BCFSA has released a consultation paper proposing changes to modernize the capital framework for B.C.’s credit unions and is seeking feedback from credit unions and the public during a 90-day consultation period. The consultation is part of a multi-year initiative to align B.C. credit unions with international standards while ensuring that unique aspects of the B.C. credit union segment are considered.
BCFSA is recommending changes to the current Capital Requirements Regulation to ensure that capital adequacy requirements for credit unions continue to reflect the underlying risks. The changes are intended to raise both the quality and quantity of regulatory capital and enhance the risk coverage of the capital framework.
“The credit union system in B.C. has grown significantly in both size and complexity since the current capital requirements were introduced in 1990,” said Blair Morrison, Chief Executive Officer, BCFSA.
“Growth, consolidation, and increased interconnectivity in the segment have resulted in greater complexity of operations and a greater concentration of assets into fewer and larger credit unions. Credit unions are operating in a changing environment with increased risks associated with the globalization of the financial market. Traditional risks, such as economic and credit, and newer risks, such as cyber and natural catastrophe and climate, need to be addressed.”
Through the consultation paper, BCFSA aims to enhance transparency by seeking input at an early stage of the rule-making process and improving stakeholder understanding of the objectives. Credit unions and the public are invited to review the consultation paper and provide comments through an online Consultation Feedback Form. The consultation is open until November 6, 2023.