The Financial Services Regulatory Authority of Ontario (FSRA) is holding a 45-day consultation on its interpretation of the rules governing credit unions in Ontario.

The Proposed Credit Union Market Conduct Framework and interpretation guidance outlines FSRA’s interpretation of the existing Standards of Sound Business and Financial Practices from by-law number five of the Deposit Insurance Corporation of Ontario (DICO), and section 102 of the Credit Unions and Caisses Populaires Act, 2020. The approach section of FSRA’s guidance further outlines how FSRA determines whether a credit union is meeting its legal requirements with the creation of a suitable market conduct framework (MCF).

“An MCF promotes better conduct for a credit union by detailing how the credit union should behave to ensure fair outcomes for its members and customers by prioritizing treatment of members and customers across the entire organization, (by) promoting consistent conduct standards across the entire credit union and among all levels of its business, and (by) setting clear accountability within the credit union for implementation and oversight,” the guidance document states.

They further add that a credit union must comply with two specific actions in order to satisfy the requirements outlined in the DICO by-law and the Act: Credit unions must adopt a code of market conduct and establish related policies, practices and procedures. The document also states that credit unions must establish an effective governance structure and oversight processes. 

According to the documents, a credit union’s business conduct standards must also address, at a minimum, a number of subjects including access to deposits, mis-selling, tied selling, misrepresentation of information to members or customers, disclosure of material information, complaints handling, conflicts of interest and the protection of member or customer information. 

FSRA is accepting feedback on the framework and guidance until August 12, 2021.