Meeting summary

Credit Union Technical Advisory Committee (TAC) for Regulatory and Supervisory Initiatives

Date: August 23, 2023
Time: 1:00 – 2:00 pm
Location: Virtual
Attendees: See Appendix A

This meeting of the Regulatory and Supervisory Initiatives TAC focused on the following two agenda items:

  1. Public Facing FSRA Guidance Tables
  2. Draft Credit Union Rule for Unclaimed Deposits 

Public-facing FSRA Guidance tables

Overview

FSRA provided a brief overview of recent updates that have been made to FSRA’s online Guidance Table. The updates make Guidance easier to find and access as they can be filtered using different parameters. FSRA is looking to ensure sectors can use the table in a way that works for them. Before FSRA makes additional changes, they would like to get a sense from credit unions (CUs) how they use the table. This feedback will be used for potential future improvements.

Questions and feedback

  1. FSRA asked whether members were familiar with the Guidance Table and what their experiences were with the Table?
    • Members indicated that some of them had used the Table but the familiarity with the Table was not widespread.
    • Another member noted that they use the Table to ensure that they are using the most update and active guidance. They found that at times the search results are messy and convoluted. Suggest making the Table/search results easier to navigate.
    • One member stated that overall, they can find what they are looking for when using the Table. In past they had trouble determining what is an active guidance versus not active, but this seems clearer now.
    • Another member stated it would be helpful to have the ability to download the guidance into an excel spreadsheet to be able to track it better for compliance purposes.
    • A member suggested having the Table default to organizing the guidance by name instead of by guidance number.
  2. One member suggested that it may be useful for FSRA to allow for a search field for just consultation guidance.
    • FSRA noted that the Table allows you to search for consultation versions of guidance (in the field you can choose active/past consultations). 
  3. FSRA asked members if it would be helpful to filter results according to the most recently published guidance by sector.
    • Members indicated that this would helpful especially in case they missed the release of Guidance via e-blasts.

Draft Credit Union Rule governing unclaimed deposits

Overview

FSRA opened the meeting by thanking the TAC for their input and feedback on proposed Rule elements at a previous TAC meeting held in February 2023. The feedback that TAC members provided alongside that from the Consumer Advisory Panel Working Group has been instrumental in developing the proposed Rule elements.

FSRA provided a brief recap of the legislative framework for unclaimed deposits as outlined in s.147 of the CUCPA 2020. FSRA than provided a brief overview of some additional details on the Draft Rule including the following: 

  1. How and when CUs would pay unclaimed deposits to FSRA. 
    • The Draft Rule proposes that CUs would transfer unclaimed deposits electronically on an annual basis. 
  2. What would constitute satisfactory evidence of a person’s entitlement to an unclaimed deposit. 
    • The Draft Rule proposes to take an outcome focused approach to defining what constitutes satisfactory evidence. FSRA will provide examples of what constitutes satisfactory evidence to provide claimants guidance on what should be submitted. 
  3. Interest would not be payable by FSRA once unclaimed deposits are transferred to FSRA.
    • CUs would be required to transfer unclaimed deposits to FSRA alongside any interest that accrued while the account was inactive. Any passive interest earned by FSRA while holding the unclaimed deposits would be used to administer the unclaimed deposit program. 
  4. Proposed requirements for CUs around notifying/contacting members with inactive accounts.
    • The Draft Rule proposes that CUs notify members with inactive accounts as follows:
      • At 2-years of account inactivity, in writing;
      • At 5-years of account inactivity, in writing and would make reasonable efforts to locate the member proportionate to the deposit balance; and
      • At 9-years of account inactivity, in writing and would again make reasonable efforts to locate member, proportionate to the deposit balance.
  5. A right of reconsideration would be available for claimants. 
    • The Draft Rule proposes to include a right of reconsideration for claims that are denied. The right of reconsideration would be available for claimants that are able to establish a reasonable basis for reconsideration and/or where there is new information to validate their claim.
  6. Unclaimed deposits would include deposits in foreign currency.
    • The Draft Rule proposes that CUs would transfer all foreign currency unclaimed deposits to FSRA. Deposits would be converted to CAD prior to transfer and paid to claimants in CAD.

Summary of questions and feedback

  1. A member asked whether the deposit information FSRA will require CUs to submit has been reviewed against the Bank Act?
    • FSRA noted that the deposit information that CUs would need to submit to FSRA is informed by the Bank of Canada and British Columbia’s requirements alongside some additional information. FSRA has not finalized the list and the examples noted in the presentation are illustrative. FSRA plans to consult and obtain feedback from the sector before finalizing this list. 
  2. One member noted that CUs don’t keep copies of IDs due to privacy concerns. FSRA should consider privacy requirements as it relates to the information FSRA plans to request from CUs.
    • FSRA is undertaking a privacy impact assessment and will also work with the Office of the Privacy Commissioner to ensure the Rule is compliant with applicable privacy legislation. 
  3. A member asked whether the requirement to notify a member “in writing” includes electronic communication (e-mails/phone calls) or are only written letters permitted?
    • FSRA will provide further details and consult on what constitutes “reasonable efforts” and what constitutes “in writing”.
  4. One member asked whether CUs could continue to charge fees on inactive accounts before they are transferred to FSRA?
    • FSRA confirmed that the fees that CUs apply to inactive accounts when held by the credit union are outside the scope of this Rule.
  5. FSRA asked whether the sector had any concerns using the Bank of Canada rate for the foreign currency conversions to CAD prior to transfer the funds to FSRA?
    • Members did not indicate any concerns with using the Bank of Canada rate.
  6. One member asked whether FSRA will differentiate between inactive accounts and inactive profiles for the purposes of the Rule.
    • FSRA noted that for a member’s account to be considered unclaimed, the whole membership needs to be inactive and not just one account.
  7. One member asked whether FSRA will be drafting Guidance on how to determine which inactive accounts are required to be sent to FSRA as unclaimed deposits.
    • FSRA noted that it anticipates releasing Guidance which will set out some of the operational details that CUs will need in order to process and send unclaimed deposits to FSRA.
  8. One member asked what happens if a member purchases a certified cheque and it stays uncashed for over 10 years. Would a CU keep these funds, or would they be transferred to FSRA under the Unclaimed Deposit program?
    • Certified cheques are not part of the scope of this Rule given that the definition of what constitutes a deposit is defined by the CUCPA 2020. FSRA plans to issue guidance on how we interpret the definition of deposit. 

Next steps

FSRA invited CUs to submit any further comments/feedback they may have on any of the questions posed today or any other considerations. FSRA looks forward to receiving further input on operational details from CUs on the proposed Rule elements.

FSRA plans to finalize the draft Rule in the coming months and seek pre-clearance from MOF. FSRA is targeting releasing the draft Rule for broader public consultation in the Winter of 2023/24.

Appendix A: Attendance record

Invited/Attended

Company name

Attendance status
(A)ttended; (R)egrets; (S)ubstitute;
Amber McNair FSRA A
Bradley Hodgins FSRA A
David Huang FSRA A
Grace Wen FSRA A
John Caldwell FSRA A
Jason Harris FSRA A
Mai Vo FSRA A
Shad Rafi FSRA A
Shamaila Mian FSRA A
Trevor McKillop FSRA A
Amy Vincent Copper Fin A
Angie Sorrenti Northern Credit Union A
Anita Saar Northern Birch Credit Union A
Bhuwan Singla DUCA Financial Credit Union A
Damian Chiu Canadian Credit Union Association A
Ed Cahais DUCA Financial Credit Union A
Janet Johnson Libro Credit Union  A
Kaitlyn Stadey Copper Fin A
Kirsten Sonius Meridian Credit Union  A
Maryse Gauvin Caisse Alliance A
Michel Marleau Caisse Alliance A
My Ngoc Truong DUCA Financial Credit Union A
Oliver Lareau Desjardins A
Richard Adam Northern Credit Union A
Riz Ahmad DUCA Financial Credit     A
Sandy Stephens Alterna Credit Union A