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Our Cooperative Banking Initiative… What is it Really all About?

Don’t Gamble With Your Future. Our Cooperative Banking Initiative… What is it Really all About?. A Presentation to the Credit Union Managers Association. October 9, 2002 Gary Seveny. Cooperative Banking - Background. Reform of financial sector culminated in 2001 with Bill C-8

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Our Cooperative Banking Initiative… What is it Really all About?

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  1. Don’t Gamble With Your Future Our Cooperative Banking Initiative…What is it Really all About? A Presentation to the Credit Union Managers Association October 9, 2002 Gary Seveny

  2. 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

  3. 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

  4. 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

  5. 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

  6. And Us, Credit Unions? Where Do We Stand?

  7. 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

  8. Do we ignore opportunity?

  9. 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

  10. Don’t 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?

  11. What’s 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!

  12. What’s 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

  13. What’s 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!

  14. What’s Next?CS CO-OP’s Action Plan • CS CO-OP owns a bank: Alterna Bank • Needs to be a cooperative bank • Target: December 31, 2004

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