Screening criteria

Provincial Credit Unions (PCU) seeking to continue as Federal Credit Unions (FCU)

PCU applicants should be able to demonstrate, at the onset of the application process, how their proposed continuance as a FCU aligns with the elements set out below. These elements help OSFI assess suitability for the streamlined framework.

• A well-established, transparent, and readily understood business model, primarily based on activities and structures standard in the credit union sector.
• An established operating history and a demonstrated supervisory track record under a provincial regulatory authority.
• The capacity to maintain adequate capital over time through retained earnings, supported by stable, sustainable profitability appropriate to the credit union's size, business model, and risk profile with near-term forecasts reflecting continued profitability.
• Systems and management capacity sufficient to support effective scaling at the federal level, commensurate with the nature, scope, and complexity of activities and the overall risk profile.
• A planned approach to engaging with the membership and the relevant provincial regulator on federal continuance, supported by a clear understanding of key aspects of the transition, including its timing, process and impacts.
• A clear and viable legislative pathway within the credit union's home province to effect provincial discontinuance within a reasonable timeframe and without material uncertainty.

Credit unions who are not deemed suitably positioned for the streamlined framework following the initial readiness assessment will be formally advised and directed to apply under OSFI's existing guides and approvals processes.

Entities with innovative banking models seeking to become federally regulated institutions

Applicants with innovative methods or products described below should be able to demonstrate, at the onset of the application process, how their proposed business model aligns with the elements below. These elements help OSFI assess suitability for the streamlined framework.

Innovative methods

Compared to existing industry practices, the applicant uses new or meaningfully different approaches to delivering or operating financial services that result in demonstrated improvements in one or more of the following areas:

• efficiency
• cost
• speed
• resilience
• accessibility
• risk management

Examples of innovative methods may include novel operating models, capabilities, distribution frameworks, or end‑to‑end process designs.

Innovative products

The applicant offers new or materially differentiated financial products in Canada, such as:

• novel account types, pricing or fee structures; or
• integrated bundled financial services that deliver differentiated and measurable value to customers.

Applicants in this category who are not deemed suitably positioned for the streamlined framework following the initial readiness assessment will be formally advised and directed to apply under OSFI's existing guides and approvals processes.