Capital Modernization Project

BCFSA is conducting a multi-year initiative to modernize the capital framework for B.C.’s credit unions. The goals of the Capital Modernization Project are to ensure that capital adequacy requirements for credit unions continue to reflect underlying risks and, as appropriate, reflect developments in international standards and best practices. The ultimate outcome of this initiative is expected to be a new Capital Rule that will replace portions of the existing Capital Requirements Regulation respecting credit unions.

It is BCFSA’s objective to proactively engage with credit unions and other stakeholders throughout the Capital Modernization Project. Engagement with key stakeholders will help ensure that the unique characteristics of the B.C. credit union system are considered as part of the work to adopt a capital framework, based on Basel III, that will align more closely with international standards.

Background

BCFSA’s Capital Modernization Project follows the Financial Institutions Act and Credit Union Incorporation Act Review issued in March 2018 by the Ministry of Finance, which included recommendations to adopt a Basel III-like capital framework and rules-based approach for capital standards applicable to all provincial credit unions.

As detailed in BCFSA’s Regulatory Roadmap, the Capital Modernization Project is a core focus for credit unions over the coming years.

Project Timeline

Phase 1: Planning, Development and Consultation Launch
2021 — 2022

Phase 2: Stakeholder Engagement
2022 — 2023

Phase 3: Consultation and Rule Development
2023 — 2024

Phase 4: Implementation and Transition
2024 — 2025

Phase 2: Stakeholder Engagement

Consultation on Proposed Capital Framework

BCFSA has released its Capital Modernization: Consultation Paper for B.C. Credit Unions proposing changes to modernize the capital framework for B.C.’s credit unions and is seeking feedback from B.C. credit unions and the public during a 90-day consultation period.

The consultation paper includes a number of discussion questions, and responses can be submitted through an online Consultation Feedback Form.

• Extension of Consultation Period

  NOTE: BCFSA has extended its consultation on the Capital Modernization Project for two weeks to provide additional time for credit unions impacted by wildfires to provide feedback. The consultation will now formally close on November 6, 2023.

We also invite credit unions to register for the following series of information sessions to learn more about the changes proposed in the Consultation Paper. You have the option to participate in one or multiple webinars from the series.

At each session, participants will have the opportunity to take part in a moderated question and answer period following the presentation. Please submit questions in advance, through our Ask Us Form.

Session 1: Capital Modernization Project Consultation Launch
Thursday, August 3, 2023, 1:00 – 2:30 pm PST
This webinar provides an overview of the Consultation Paper and an opportunity to learn more about the consultation process, timelines and activities.

• View Consultation Launch Webinar Recording
• View PowerPoint Presentation

Session 2: Capital Overview
Thursday, September 7, 2023, 1:00 – 3:00 pm PST
This session focuses on the regulatory capital components. BCFSA’s goal is to raise the quality and consistency of regulatory capital with an approach tailored to address the cooperative nature of the B.C. credit union system.

• View Session 2 Webinar Recording
• View PowerPoint Presentation

Session 3: Capital Buffers, Operational Risk, Leverage Ratio and Market Risk Overview
Thursday, September 14, 2023, 1:00 – 3:00 pm PST
This session is an introduction to the capital buffers, operational risk, internationally harmonized leverage ratio and an overview of market risk.

• View Session 3 Webinar Recording
• View Powerpoint Presentation

Session 4: Credit Risk Overview
Thursday, September 21, 2023, 1:00 – 3:00 pm PST
This session is an overview of the credit risk approach proposed in the Consultation Paper to achieve sound, risk-sensitive capital requirements that address the features of the economic landscape for B.C.’s credit unions.

• View Session 4 Webinar Recording
• View Powerpoint Presentation

Register for the Series of Information Sessions

Working Group Consultation

As part of BCFSA’s commitment to engaging proactively with credit unions and other stakeholders throughout the Capital Modernization Project, a diverse group of representatives from B.C. credit unions were appointed to serve as members of its Credit Union Capital Modernization Working Group (“Working Group”) following an open call for members to all B.C. regulated credit unions.

Working Group members participated in focused discussions and were invited to provide feedback and impact analysis on targeted topics.

Working Group Terms of Reference

Working Group Member List

• • BlueShore Financial Credit Union
  • Bulkley Valley Credit Union
  • Central 1 Credit Union
  • Coastal Community Credit Union
  • Gulf & Fraser Fisherman’s Credit Union
  • Integris Credit Union
  • Interior Savings Credit Union
  • Kootenay Savings Credit Union
• • Nelson & District Credit Union
  • Prospera Credit Union
  • Revelstoke Credit Union
  • Summerland & District Credit Union
  • Sunshine Coast Credit Union
  • Vancouver City Savings Credit Union
  • Williams Lake and District Credit Union

Phase 1 (Complete): Planning, Development and Consultation Launch (2021 — 2022)

To officially launch the project, BCFSA hosted an information session for all interested stakeholders on Tuesday, June 28, 2022, providing an overview of the project goals and objectives, highlighting the opportunities for stakeholder input, and responding to questions. See the session recording or presentation for more information.