How Ontario Credit Unions Are Regulated


Revisions to DICO By-law #5

We are pleased to confirm that the government recently approved the revised DICO By-law #5. This revised by-law becomes effective for financial years starting on or after January 1, 2012.

DIRECTOR TRAINING AND QUALIFICATIONS

Following industry consultation, including comments received at the second webinar, we are pleased to confirm final guidance (see table below) which incorporates minor changes to help improve clarity.

The Guidance Note

  • provides guidance on setting Board policy for director training and qualifications
  • outlines core competencies considered critical for directors to effectively fulfill their responsibilities
  • sets out expectations for minimum competency levels, training requirements, and time frame for the attainment of competency levels
  • summarizes the assessment criteria DICO will use in considering the adequacy of a credit union’s policy and practices relating to director training and qualifications
  • these requirements become effective for directors elected or appointed on or after July 1, 2012

The Application Guide describes the nine core competencies in detail

Note: While the minimum competency requirements remain unchanged (Class 1: Good; Class 2: Strong), the application guide now includes:

  • Class 1 Institutions: Basic, Good and Strong
  • Class 2 Institutions: Basic, Good, Strong and Expert

Next Steps

We are pleased to confirm that a small working group of industry representatives has been established to help DICO with a number of initiatives in this area including:

  • Director self-assessment tools
  • Sample policies
  • Best practices for director information, selection criteria and nomination

Members of the working group will consult with directors at their organizations for input as we move forward.

We anticipate that these will be finalized before May 31, 2012. In the meantime, you may wish to contact any of the following participants if you have any questions or suggestions:

Director Training and Qualifications Working Group

Ms. Sheryl Wherry, Chair
Corporate Secretary
Meridian Credit Union Limited
Email: Sheryl Wherry

 Ms. Madeleine Brillant
Vice-President Corporate Affairs
Alterna Savings and Credit Union Limited
Email: Madeleine Brillant
Ms. Diane Kocet
General Manager/CEO
The Energy Credit Union Limited
Email: Diane Kocet

 Mr. Jean-Guy Laflèche
Administrateur
Caisse populaire Trillium Inc.
Email: Jean-Guy Laflèche
Ms. Kim Leak
President/CEO
Ontario Civil Service Credit Union Limited
Email: Kim Leak

 M. Luc Racette
Directeur des opérations
L'Alliance des Caisses populaires de l'Ontario Limitée
Email: Luc Racette
Ms. Janet Taylor
Governance Specialist
Libro Credit Union Limited
Email: Janet Taylor

 Ms. April Williams
Human Resources and Training Manager
Lambton Financial Credit Union Limited
Email: April Williams


Publication Highlights
Guidance Note: Director Training and Qualifications
  • Class 1 Credit Unions, March 2012
Guidance Note: Director Training and Qualifications
  • Class 2 Credit Unions, March 2012
Application Guide: Director Competencies
  • Class 1 Credit Unions, March 2012
Application Guide: Director Competencies
  • Class 2 Credit Unions, March 2012
Stakeholder Feedback
  • November 2011
 

ENTERPRISE RISK MANAGEMENT (ERM) - Class 2 Institutions (refer to table below)

As previously indicated, DICO proposes to phase-in this new requirement over the next two years although early adoption is encouraged. Institutions with more than $250 million in assets will need to address this requirement starting in 2012. All other Class 2 institutions will need to address this requirement in 2013.

Final versions of the Enterprise Risk Management (ERM) Framework, the Application Guide and the Guidance Note are now available. On Thursday, September 29, 2011 DICO hosted a webinar on this subject to review the concepts outlined in the documents, provide more clarification and address any questions from the sector.

Class 1 institutions may also wish to review these documents to see if they may be helpful.

Guidance Note: Enterprise Risk Management (ERM)

This guidance note outlines the minimum requirements for an enterprise risk management program. It also identifies the typical features of this program and provides further information on the key responsibilities for the Board, Audit Committee and management and DICO's expectations and assessment criteria.

ERM Framework and ERM Framework Application Guide

DICO has been working with an industry working group to develop additional information and tools for help in setting up an ERM program. The ERM Framework document outlines basic objectives, concepts and structure of an effective ERM program while the ERM Application Guide provides an example of an ERM methodology for consideration. The ERM methodology and process adopted by a credit union will differ between credit unions based on their size and complexity.

We would like to take this opportunity to thank the industry working group for their valuable insight and hard work in developing these documents and to the sector members who sent us their comments helping us to further refine and improve these documents.

 
Publication Highlights
Enterprise Risk Management (ERM) Framework
  • September 2011


ERM Application Guide
  • September 2011


Guidance Note:Enterprise Risk Management (ERM) for Class 2 insured institutions
  • September 2011





Ontario credit unions are regulated through a comprehensive regulatory framework which involves the Ministry of Finance , the Financial Services Commission of Ontario (FSCO)  and the Deposit Insurance Corporation of Ontario (DICO).

This regulatory framework includes:

The Ministry of Finance is responsible for developing and establishing the legislative and regulatory framework under which credit unions must operate. FSCO is responsible for ensuring that credit unions operate in accordance with the requirements of the Act and Regulations, particularly with respect to issues involving market conduct issues relating to members and the general public.

DICO is responsible for overseeing compliance with solvency rules and for providing deposit insurance protection for deposits held in Ontario credit unions up to prescribed limits. As part of this responsibility, DICO has the authority to issue by-laws to ensure that insured institutions operate in accordance with Sound Business and Financial Practices.