The Office of the Superintendent of Financial Institutions (OSFI) has launched a streamlined approvals framework for provincially regulated credit unions and innovative banking models looking to become federally regulated institutions, the government agency announced Thursday.
The framework was initially announced in April, and complements measures in Budget 2025 that made it easier for credit unions to enter the federal system.
Applicants that don’t meet the requirements of the streamlined framework or are outside of its scope, such as insurance companies and foreign bank branches, will continue to follow OSFI’s existing approvals processes.
The streamlined framework supports risk-based assessments with shorter and defined application timelines, OSFI said. An online dashboard gives industry participants and the public transparency into each entity’s application status.
Applicants move through three phases under the new framework: an initial readiness assessment, a formal application and operational readiness. The regulatory process can be completed in under 18 months.
“We aim to create a smoother, more accessible pathway for credible new entrants navigating the federal process, without lowering our standards,” Peter Routledge, OSFI’s superintendent of financial institutions, said in a release. “That means being clearer about what we expect, more transparent about the process, and more risk-based in how we assess applications. Done well, this can support greater competition and responsible innovation without compromising the safety and soundness of the financial system.”
The initial readiness assessment is an early engagement between OSFI and the applicant to look at ownership, financial strength and overall viability, among other factors. Within four weeks of the meeting, OSFI will issue an assessment letter to the applicant determining whether it’s suitable for the streamlined framework and outlining expectations on the proposed applications.
Once the institution makes a formal application for letters patent, OSFI will take up to 12 months to perform a risk-based review, including evaluations on operational resilience, financial resilience, risk governance and integrity and security risks.
Institutions apply for an an Order to Commence and Carry on Business (OCCB) after receiving letters patent. OSFI will issue an OCCB within three months after continuing its review, including exit plans for the orderly wind-down of operations. If appropriate, OSFI may impose temporary restrictions on certain activities until gaps are remediated.
Credit unions get their letters patent from the finance minister and their OCCB from OSFI at the same time, shrinking the timeline by another three months.