The Rise of Credit Unions
As General Counsel, Susan Ols’ role is to provide industry-oriented advice and counsel on various corporate and commercial issues for Credit Union Central of Manitoba (CUCM) and CUCM related entities. She has a mandate to create, review and approve legal agreements, resolutions, by-laws and other documents to ensure CUCM and Manitoba credit union interests are appropriately represented and protected. Susan discusses credit unions: “As cooperatives, credit unions adhere to seven Co-operative Principles – statements that emphasize service, equality, respect, autonomy, community, democracy and education”, as well as the challenges she faces as General Counsel.
There are twice as many credit union locations in Manitoba as there are for other financial institutions; what challenges does this pose on your role as General Counsel?
Nearly half of Manitobans – over 600,000 – use a credit union for their financial needs. Manitoba credit unions are sophisticated, competitive financial cooperatives – each locally owned and democratically governed by its member owners. Today, Manitoba credit union total assets represent around $28.5 billion of the Manitoban economy – that represents growth of 120% from a decade ago.
The trend in the credit union industry today is fewer, larger credit unions. In 2006, there were 57 independent credit unions in Manitoba – at the time of writing, there were only 30. Ten years ago, only 3 credit unions had assets over 1 billion. Today, that number has more than doubled. This trend is expected to continue.
In this climate of accelerated growth, I provide guidance to Manitoba credit unions on matters of common concern, such as corporate governance, compliance, and regulatory requirements, both federal and provincial. I am in frequent contact with provincial regulators, including the Financial Institutions Regulation Branch (FIRB), an arm of the provincial government that oversees the legislative and regulatory framework of the credit union industry, and Deposit Guarantee Corporation of Manitoba (DGCM), a statutory body established under the Act to oversee credit union operations and performance, and guarantee member deposits.
I am also involved in the legal vetting of operational and policy manuals that CUCM maintains, as mandated by the Act, on behalf of credit unions. The manuals deal with various legislative and regulatory issues faced by credit unions in relation to, inter alia, Privacy, Foreign Tax Compliance, Anti-Spam Legislation, Anti-Money Laundering, and Common Reporting Standards. Compliance and risk management support are crucially important services that CUCM provides to credit unions. In consultation with other regional and provincial centrals, our team provides guidance to help credit unions comply with the extensive set of federal legislation and provincial standards.
How do you ensure you maintain the best outcome for clients, whilst adhering to the company’s needs?
As a creature of statute, CUCM’s purpose is defined by the Credit Unions and Caisses Populaires Act, which establishes our objectives and credit union expectations. In addition to managing credit union liquidity and credit granting procedures, we exist to provide top quality services for credit unions. Some services are those that are most effectively provided on a centralised basis, including educational, research, and advisory work. Others are custom solutions. We also do our utmost to promote sound management principles and operating procedures for the benefit of credit unions, while broadly promoting the organisation, development and best interests of credit unions in Manitoba.
What is the most challenging aspect of maintaining that balance? How do you overcome this?
Building and maintaining good working relationships is essential in this position, as is managing priorities and time. I try to acknowledge all incoming requests or queries, and provide a preliminary review of the matter in order to assign priority. I also consider or inquire into relevant timelines to ensure deadlines are met. If additional time is required to complete an assignment, I give notice as soon as possible. Providing regular progress reports helps reassure clients that their matters are being attended to in the event of unexpected delay.
What benefits do credit unions offer to businesses and corporations?
In terms of products and services, there is little difference between credit unions and other financial institutions. Like other financial institutions, credit unions are highly regulated, their capital requirements are stringent, and they are closely monitored by provincial and federal regulators for compliance with legislation and financial indicators.
Like other financial institutions, credit unions constantly try to balance traditional customer service, emerging technology, compliance, member-customer needs and profit. For some, profit is the deciding factor, and this is where credit unions differ, whether providing service to individuals or businesses and corporations: credit unions operate on the principle of ‘profit for service’, not ‘service for profit’.
Credit unions are profitable enterprises and all members are shareholders, so when credit unions plough profits back into their operations — to enhance electronic services, offer very competitive loan and savings rates and low fees — all members benefit, including business and corporate members.
After contributing to their own equity to meet regulatory requirements, supporting community groups and initiatives — and making enhancements to operations, products and services — credit unions return any profit that remains directly to members in the form of shares, rebates, and lower lending rates and higher deposit rates.
It’s a business model that has proven very successful in Manitoba, with its long co-operative tradition.
Credit unions also have a great deal of experience and success with Manitoba business.
Credit unions are the number one lender to small- and medium-sized business in Manitoba; no other financial institution even comes close – almost 50% of small businesses in Manitoba use a credit union as their primary financial institution. They are also safe and solid – every dollar on deposit at every credit union in Manitoba, and every dollar of interest earned, is guaranteed without limit by the Deposit Guarantee of Manitoba.
Credit unions have branches in over 100 communities throughout the province, thereby providing Manitobans substantially better physical access to high quality financial services and products than any other financial institution. In over one-half of those communities, a credit union is the only financial institution in town to serve local residents and business.
Are there any legal changes occurring in 2018 which will heavily impact your work; if not, are there any changes you are hoping for?
Throughout the course of 2017, CUCM participated in a number of working sessions of the Law Review Committee, members of which include representatives of the Financial Institutions Regulation Branch (FIRB) and Deposit Guarantee Corporation of Manitoba (DGCM).
The Committee was tasked with reviewing a series of proposals to update The Credit Unions and Caisses Populaires Act (Manitoba). The proposals were aimed at facilitating the transfer of supervisory authority of CUCM from the Office of the Superintendent of Financial Institutions (OSFI) to FIRB. The proposals also sought to accommodate a number of changes to the regulatory landscape within the Manitoba credit union system in relation to capital/liquidity requirements and governance. It is anticipated these proposals, once enacted into provincial legislation, will have a significant impact on the operations and governance of CUCM and Manitoba credit unions.
What impact has the country’s economic status had on your work, if any?
Canada has a stable economy, which fared reasonably well during the 2008 financial crisis. Nonetheless, the effect of the 2008 crisis has been to increase the degree of regulatory scrutiny applied to the financial services industry generally. The regulatory burden on credit unions, however, has been disproportionate given their asset size relative to other Canadian financial institutions. CUCM’s role is to help Manitoba credit unions navigate the increasingly complex regulatory labyrinth.
Susan Ols, BAH, LLB, LLM
General Counsel & Director, Legal Affairs
Credit Union Central of Manitoba Limited
+1 (204) 985-4815 I Susan.Ols@cucm.org
My name is Susan Ols and I am General Counsel and Director of Legal Affairs at Credit Union Central of Manitoba Limited (CUCM). Prior to arriving at CUCM, I acted as Crown Counsel for the federal Department of Justice, Canada. I’ve been fortunate to have had the opportunity to work as in-house counsel in both the public and private sector, in Europe and in Canada. I’ve found that many of the corporate compliance issues facing business today are increasingly transcending national borders.
I grew up in Winnipeg, Canada and studied at home and abroad. I completed both law degrees (LLB; LLM, Cantab) in England. I am a member of the Bar Council of England and Wales, the Manitoba Law Society and the Manitoba Bar Association.
CUCM is the trade association and service provider for the province’s 30 autonomous credit unions. CUCM was created by The Credit Unions and Caisses Populaires Act (Manitoba), and is mandated by the Act to manage liquidity reserves of credit unions (the Act requires credit unions to maintain prescribed levels), and to monitor credit union lending procedures. CUCM also provides common trade services to credit unions in areas such as corporate governance, government relations, representation and advocacy.
In addition to the above, CUCM provides services to credit unions in the areas of payment and settlement systems, treasury, human resources, research, communications, marketing, planning, lending, R & D, and business consulting.
Manitoba credit unions jointly own CUCM and representatives from six provincial Peer Groups sit on its board of directors. CUCM is financed through assessments and fee income derived through its operations.
