The trade body for Canada’s credit unions is calling for reform of the rules around mergers to help the sector grow in the face of growing competition from big banks, fintechs and global tech giants.
The Canadian Credit Union Association (CCUA) says the financial landscape is “increasingly dominated” by these rivals organisations, leaving the credit union sector “working hard to remain competitive and community-focused”.
Mergers are one mechanism for the sector to face down this threat, but progress is being hampered by an “outdated approval process” that is that is “slowing credit unions’ ability to grow, innovate, and meet the evolving needs of Canadians,” says the CCUA.
It is calling for reform in a report compiled with the support of MLT Aikins LLP, Stronger Together, Sooner, a Roadmap for Faster and Fairer Credit Union Merger Reviews.
The report warns that the current merger review process is “too slow, overly complex, and ill-suited to today’s digital-first economy”.
It adds: “Multiple layers of regulatory approvals – often stretching over a year – create costly delays that hinder innovation, erode competitiveness, and risk leaving communities with fewer financial choices. The existing ‘one-size-fits-all’ approach focuses too narrowly on competition between credit unions, ignoring the reality that they compete daily with banks, fintechs, and tech giants.”
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CCUA president and CEO Jeff Guthrie added: “Every credit union merger must be approved by its members – the very Canadians the Competition Bureau exists to protect.
“Regulators should respect that democratic mandate by streamlining approvals, reducing red tape, and ensuring the process reflects the realities of today’s financial market.”
CCUA emphasises that the process is overly burdensome, with multiple layers of regulatory approvals that vary depending on the type of merger, creating significant delays that undermine innovation and operational efficiency.
“This is about giving credit unions the tools they need to compete on a level playing field,” added Guthrie. “For the credit union sector to remain relevant to Canadians, they need to be able to operate at a level of scale that can support investments in new technologies and services that many credit unions cannot do alone today.”
Among its recommendations, the report calls for member-approved mergers to receive immediate clearance from the Competition Bureau without a full review. If any assessment is required, it should only be focused on those communities that will be left without service options – and even then, the bureau must consider the broader impact of the merger on the viability of the combined operation.
“A streamlined merger review process will help credit unions grow, innovate, and continue delivering the personalised, community-focused services Canadians value,” Guthrie added.
Without these changes, CCUA warns that needed mergers could be delayed or derailed and notes that legislative reform may be necessary if regulatory approaches do not evolve.
