The Canadian Securities Administrators, the country’s top financial regulators, has approved project management credit for credit union credit unions for the first time.
The decision comes as a result of a joint investigation into the problem of credit unions failing to report certain types of debt to the CRA.
The CSAs decision follows a three-month investigation by the Financial Industry Regulatory Authority, which concluded that some credit unions did not adequately disclose their credit risks to the government.
The CRA has since tightened rules governing credit unions.
The agency says that credit unions must disclose their debt and assets to the agency.
“Credit unions should be required to file credit card statements and other financial records, including debt and credit card balances, with the CRA, so that they can be assessed for compliance with applicable regulations,” said John Dvorak, director of the CRA’s enforcement division.
“The CRA believes that this information helps ensure that credit union employees and customers have adequate information to make informed decisions about the best use of their credit.”
Credit unions have a number of financial obligations.
The majority are for employees, but they also owe money to non-employees for operating expenses.
Credit unions also pay a fee to the federal government for each credit card transaction they accept.
The new rules also allow credit unions to apply for the right to apply a project management charge to a project, which could be used to offset some or all of the costs of the project.
The project management charges are typically a percentage of the cost of the financing, but are generally based on a project’s size and complexity.
The government is paying up to 50 per cent of a project credit line.
“This new provision allows credit unions, like any other business, to apply to apply project management payments to their own credit cards for up to a specified percentage of their financing costs,” said Robert Dufault, chief executive officer of the Canadian Association of Credit Unions.
“When credit unions apply for these payment, they must apply the same credit card charges as other businesses.”