CUDGC outlines status of action to amalgamate credit unions

In November 2001, the Credit Union Deposit Guarantee Corporation (CUDGC) removed the board of directors of the Labrador Savings Credit Union (LSCU) and proceeded to amalgamate the LSCU with Eagle River Credit Union of Labrador (ERCUL).

In January 2002, a member of the LSCU challenged CUDGC's action. On April 12, 2002, the Supreme Court of Newfoundland deferred a hearing on this matter.

The LSCU was originally placed under supervision in 1993, pursuant to the CUDGC regulations. Following passage of the Credit Union Act and Credit Union Regulations in 1999, both the LSCU and CUDGC have treated the supervision as being under this new legislation. A question arose during the legal challenge as to whether or not this was correct.

To clarify matters, the Superintendent of Credit Unions has today notified the LSCU that its continued supervision is under the Credit Union Act and not the 1993 Regulations. CUDGC�s board will meet to decide whether to ratify or vary its previous decisions to dismiss the board of the LSCU and order its amalgamation.

Media contact: Winston Morris, Superintendent of Credit Unions, (709) 729-2570.

2002 04 17                       11:00 a.m.