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Ministry of Finance – Enabling Credit Unions to Raise Alternative Capital
Letter Summary:
The Ontario government sought input on proposed amendments to the Credit Unions and Caisses Populaires Act, 2020 (CUCPA) that would allow credit unions to raise capital from non-members through the sale of investment shares.
Currently, credit unions can only issue investment shares to members. The proposed changes would enable access to public and private capital markets, expanding long-term funding options. Boards would have discretion over the structure of these shares, including voting rights
Overview of the Council’s Comments:
The CAC supported the proposal, but made suggestions to reinforce investor protection and disclosure mechanisms, and to examine minimum statutory governance rights for non-member shareholders. The Council also urged examination of enhancements to credit union board duties, and suggested a regulatory approval framework for credit unions seeking to issue investment shares to non-members for the first time.