Our Cooperative Banking Initiative What is it Really all About

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Our Cooperative Banking Initiative
What is it Really all About?
Dont Gamble With Your Future
A Presentation to the Credit Union Managers
Association

• October 9, 2002
• Gary Seveny

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Cooperative Banking - Background

• Reform of financial sector culminated in 2001
  with Bill C-8
• Cooperative Banking not addressed
• However, commitment from Minister of Finance to
  progress cooperative banking in parallel to C-8
  implementation
• Initial step Cooperative Banking Discussion Paper

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Cooperative Banking Discussion Paper

• Issued by the Department of Finance of Canada on
  April 2, 2002
• To gauge interest towards cooperative banking
  legislation
• To assess if consensus can be reached
• Consultation closed October 4, 2002

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Proposed Models

• The National Cooperative Bank Model (NCB)
• The Federated Cooperative Bank Model (FCB)
• The individual Cooperative Bank Model
• Discussion Paper open to other models

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Submissions Received

• Five submissions received as at September 23
• More expected by deadline (CUCC, Federation
  Desjardins)
• All supportive of the Cooperative Bank concept
  and enabling legislation
• No consensus on preferred model

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And Us, Credit Unions? Where Do We
Stand?
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Mixed Messages from Credit Unions

• Many see the opportunity
• Others are concerned with
• Fragmentation of the credit union system
• Large credit unions vs. smaller ones
• Bank vs. credit union

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Do we ignore opportunity?
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Cooperative Bank-What is it?

• Based on co-operative principles
• One member one vote
• No individual or group has control
• Profits reinvested for benefit of members or
  returned to members
• Capital raised in ways to preserve democratic
  control by members
• Preferential tax regime to allow build-up of
  reserves
• Like a credit union but at federal level

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Dont Gamble With Your Future

• Future (current) needs of credit unions
• Efficiency
• Ability to grow/expand
• Linkage
• Ability to provide services throughout Canada
• Recognition
• As credible players within the financial sector
• These needs are addressed by Cooperative Banking
  Why not support an option that helps us move
  towards the future?

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Whats in it For Credit Unions?

• Unique window of opportunity for credit unions
• Attractive option for present or future needs of
  credit unions
• Combines member-ownership with national presence
  a first in Canada
• Now is the Time Now is Our Time!

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Whats Next? By Year-End

• Department of Finance will
• Assess submissions received
• Make a go / no go decision
• Likely be also influenced by
• Climate within credit union system
• Provincial policy-makers and regulators
• Our attitude as supporters of Cooperative Banking
  is crucial

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Whats Next? Afterwards

• If go decision from Finance
• White Position Paper
• Followed by draft legislation
• Input and support from credit unions instrumental
  in moving forward
• Why gamble with your future? Have your say, get
  involved!

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Whats Next? CS CO-OPs Action Plan

• CS CO-OP owns a bank Alterna Bank
• Needs to be a cooperative bank
• Target December 31, 2004