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This week, our team has been working on several initiatives to help provide your members and clients with the ability to access important benefits, while at the same time supporting those of you who are reviewing and employing liquidity strategies. This continues to be a challenging time for so many, and our priority remains the same – to support your organization as you navigate these highly unusual times.

CRA’s Direct Deposit via Financial Institutions Service

Over the weekend, several clients went live with Canada Revenue Agency’s (CRA) Direct Deposit via Financial Institutions service, with many more scheduled to launch. Developing and implementing this initiative in under eight days took a tremendous effort and will help so many of your members and customers access their emergency benefits faster.

For those of you who have initiated the Direct Deposit via Financial Institutions service with us, I want to thank you for your collaboration as we finalize your implementation plans. If you are considering offering this service, full details can be found here.

Canada Emergency Business Account (CEBA) & Business Credit Availability Program (BCAP)

We are maintaining close contact with the CCUA regarding the Canada Emergency Business Account (CEBA) and Business Credit Availability Program (BCAP). We understand the importance of helping you assist business owners access this crucial government financial support and more information will be available in the coming days. We are currently developing a solution that equips EDC accredited credit unions on our MemberDirect and Forge Digital Banking platforms with a Canada Emergency Business Account (CEBA) application form, designed for business looking to apply through an accredited financial institution. We are currently finalizing a detailed implementation plan for this.

Digital Banking, MemberDirect and Forge
In anticipation of more of your members and customers increasing their use of digital banking, we are proactively adding additional storage capacity for MemberDirect, expected to be completed by April 10.

The Forge Digital Banking Service Upgrade was successfully completed this weekend. This was in important upgrade to enhance features and security which will provide benefits for all Forge clients and those actively seeking to join the platform. Thank you for collaborating with us and trusting us to guide you through the upgrade.

Treasury and Market Update

As a primary liquidity provider to the credit union system, Central 1 manages our portfolio to ensure we have appropriate levels of liquidity to support the system during times of stress. We are focused on maintaining confidence in the system and are committed to supporting you through this unprecedented time, ensuring the system’s resilience and success now and through the months to come. Central 1 has taken three important steps over the last week, which include:

1.Bolstering our balance sheet to create more short-term liquidity for Central 1

To maximize Central 1’s flexibility and responsiveness to any increased credit union liquidity needs, Central 1 prudently accessed the capital markets on March 30, and successfully raised $150 million in a re-opening of our recent senior deposit note. The fundraising increases our ability react swiftly to support members and clients who are reviewing and employing liquidity strategies.

2. Accessing recently announced programs by the Bank of Canada and reviewing the new measures to understand the practicalities and options available to the credit union system

On April 2, Central 1 accessed the Bank of Canada’s recently launched Commercial Paper Purchase Program (CPPP) to support the continuous functioning of financial markets. Access to this program ensures Central 1 has a consistent and stable source of short-term market funding to support our members and clients.

The Canadian commercial paper (CP) market is a key source of short-term financing to support the ongoing needs of a wide range of firms and public authorities. The CPPP will help support the flow of credit to the economy by alleviating strains in Canada’s commercial paper markets. The CPPP guarantees commercial paper funding to an amount equal to 1.25 times of the maximum program size over the past 12 months.

Central 1 also secured access to the Bank of Canada’s Standing Term Liquidity Facility (STLF). This facility provides financial institutions that are Payments Canada members to borrow from the Bank of Canada using a wide range of collateral, including mortgages. While the STLF was announced prior to the pandemic, it became operational on March 30. The large Canadian banks have accessed the STLF to supplement their funding programs. The Treasury team is establishing processes for credit unions to access the STLF though Central 1. We intend to borrow against this facility as a test the week of April 6.

3. Creating access to newly announced securitization programs, ensuring Central 1 sets up the infrastructure to access these programs which are directly available for your credit union.

 Central 1 successfully completed our first Insured Mortgage Purchase Program (IMPP) transaction on March 31 in the program’s first transaction.

Acting on behalf of a credit union as a third-party swap counterparty, Central 1 helped secure $176 million in funding to support our member’s liquidity management. Our team efficiently set up the infrastructure within three days to ensure Central 1 was ready to help and simplify the process for our members.

We are the only securitization partner in Canada that provides end-to-end securitization support in-house, from National Housing Act Mortgage-Backed Securities (NHS MBS) servicing to swap counterparty services. IMPP and securitization will help many credit unions during this period. Approximately 40 of our members, who are NHA MBS issuers, can access IMPP through Central 1. As credit unions employ various liquidity strategies, we anticipate supporting a volume of approximately $800 million through IMPP.

Payments Modernization

Payments Canada are scaling back FI-related activities for the short-term. During this time, Central 1 will remain very active in supporting Payments Canada with advice on policies and rules to maintain momentum of our core Payments Modernization project plan.

Central 1 met the timelines for official submission of our application for Lynx implementation. Based on stakeholder feedback, we are now considering a three-month delay in the launch of Lynx release 1 (September 2021). We will keep you updated as plans evolve. There are no formal changes to the enablement of ISO20022 for wires which is currently planned for 2022. There are no formal changes on RTR which continues to be planned for 2022.

Keeping you informed

I will continue to send you weekly emails to provide you with a summary of our actions and important highlights on how Central 1 can support you and your members. In addition, we have dedicated pages for COVID-19 updates on Secure Site and Central1.com, as well as daily updates through The Hub.

If you have any questions or comments, please reach out directly to me, our Relationship Managers, Member Relations staff or our Client Support Services team.

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