Update on two outstanding federal credit union continuance applications (Innovation Credit Union and First West Credit Union) | Page 2 | General financial discussion | Discussion forum

Norman1 said

everhopeful said

An interesting question: If the Manitoba gov't backstopped the DGCM, could they selectively only bail out Manitoba residents?

The Manitoba government is not required to backstop DGCM. Should the shortfall be too large, the government could just let DGCM go through bankruptcy and the insured depositors file unsecured claims against DGCM's estate.

Government could then offer to buy those claims, from Manitoba residents only, at 100% of value.

Non-Manitoban depositors would complain. But, non-Manitobans cannot vote in the provincial elections. There would be no votes lost by not including them in the offer.

The settlement of that 2007 asset-backed commercial paper fiasco years ago showed it is legally possible to not treat all claimants equally. In that fiasco, small holders of the paper were made whole. Large holders were not.  

That strategy would be one way to boost provincial population growth. I'd buy a cottage in Gimli in that scenario, as it would cost less than the funds I have on deposit at Manitoba CUs.

It also won't work for voting in provincial elections. Need to be a Manitoba resident and not just a non-resident owner of a property in Manitoba.

Some Canadian senators tried pulling a stunt like that and were found out. Couldn't produce a drivers license or health card from the province they were supposed to represent in the Senate. That's because both actually lived in Ontario.

I think one of them lived in Toronto and the another in a suburb of Ottawa.

correction: "Once the transition to Federal CU status is complete (no ETA yet), future deposit insurance will be available only under CDIC ($100K max)."