Small salaries hamper ability to oversee credit unions: report
B.C.’s auditor general has warned the province’s oversight agency for credit unions is handicapped by an acute staff shortage.
On Thursday, Auditor General Carol Bellringer released an audit saying that, despite repeated efforts, a staff shortage continues to plague the Financial Institutions Commission, often called Ficom.
The key problem, the report says, is the commission’s inability to offer competitive salaries for auditors due to government pay-scale limits. Ficom operates under the provincial Ministry of Finance.
“It’s like having a smoke detector in your house, but not buying the batteries,” Bellringer said in a statement, noting the commission’s oversight process works, but lacks people to carry out the tasks. “No batteries, no early warning system.”
Carolyn Rogers, the commission’s CEO, said in a statement that she has been warning about the issues raised in the audit for the past three years. Rogers said Ficom should be able to spend the money raised from fees levied on credit unions to carry out its role as regulator.
“That includes the ability to set compensation levels in a very competitive market so that it can hire and retain the staff needed to do the job,” Rogers said. “One of the unintended consequences of the government’s restraint policies has been to impose operating restrictions on a regulator that does not draw its funding from government.”
The report puts the commission’s staff vacancy rate at 37 per cent, something that should also generate concerns outside the credit union sector, said B.C. NDP MLA David Eby. He noted Rogers is also the provincial superintendent of real estate. That means, Eby said, that a shortage of credit union auditors also means a shortage of real estate auditors, since both draw from the same staff pool.
“When you think about the responsibilities within Ficom — pensions, credit unions, real estate, insurance — the impact of a lack of regulation could be devastating,” he said. “We saw in the United States what happens when these industries are not properly regulated.”
Eby also criticized Premier Christy Clark for saying Wednesday that B.C. has an audit team “ready to go” to enforce the new foreign purchasers’ property transfer tax.
“It’s hard for me to understand why the government thinks they have enough auditors to tackle this issue (the new tax) when they don’t even have enough auditors to tackle the basic work that was required of them in credit unions,” Eby said.
B.C.’s Ministry of Finance did not respond to a request for comment. Art Chamberlain, media relations manager of Vancouver’s Central 1 Credit Union, said his agency is still reviewing the audit.
“We’re encouraged that government will work with Ficom on the issues that were raised by the auditor general, but beyond that, we don’t really have anything to say.”
The Mortgage Brokers Association of B.C., which advocates increased industry self-regulation, opposed Rogers’s earlier proposal of more government oversight in the sector. Samantha Gale, CEO of the association said her group has experienced problems with mortgage broker licensing because of the commission staff shortage.