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Peoples Trust Company applies to convert to a Bank
December 29, 2014
5:51 pm
Doug
British Columbia, Canada
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For what it's worth and for those interested in the happenings of federal bank & trust company machinations, Peoples Trust Company applied December 10th, 2014 (and published in Canada Gazette Dec. 20th, 2014) to the Minister of Finance through the Office of the Superintendent of Financial Institutions for a letters patent of continuance that has the effect of formally dissolving Peoples Trust Company and reincorporating it as Peoples Bank of Canada (in English) and Banque Peoples du Canada (in French). This is just the first step and will likely take a year, perhaps two (or more), to finalize. It's unclear their immediate reason(s) for the conversion (perhaps cheque clearing, product reason(s), capital adequacy reason(s) or some other reason(s)). :)

Source: http://www.gazette.gc.ca/rp-pr.....ng.php#ml4

This is different than the approach Home Trust Company is taking - they've applied to incorporate a new wholly-owned subsidiary, Home Trust Bank (in English), as a subsidiary of Home Trust Company. Their motivation indicated they're looking at transferring the Oaken Financial business into Home Trust Bank and, perhaps, keeping the mortgages, VISA cards and private-label credit cards as well as the broker-sourced deposits with Home Trust Company.

Meanwhile, ResMor Trust Company has long since been dissolved post-Ally Canada and had its application to become a bank die on the "order paper," so to speak. Similarly, Street Capital Corp has applied for Bank status in late 2012 and is still waiting. These things can take quite some time.

Cheers,
Doug

January 1, 2015
11:01 am
musicalmaestro
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Interesting, thanks for sharing!

January 1, 2015
11:27 am
kanaka
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Doug your comments about Home and Oaken are surprising! Didn't Oaken just happen recently? I thought they developed Oaken for the DIY person with higher rates leaving Home to the brokers.

July 23, 2019
2:05 pm
Doug
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From the Well That Took Awhile File...I just noticed that there is a new Schedule I (domestically-controlled) federally chartered bank in Peoples Bank of Canada (Link: http://www.osfi-bsif.gc.ca/Eng.....WWRLink111) on the Office of the Superintendent of Financial Institutions' website. So, I looked into it further and, indeed, Peoples Trust Company confirmed via press release (link: https://www.peoplestrust.com/en/peoples-group-receives-letters-patent-of-incorporation-for-peoples-bank-of-canada/) on July 16, 2019, that the Minister of Finance has issued a Letters Patent incorporating Peoples Bank of Canada as a wholly-owned subsidiary of Peoples Trust Company. The OSFI Superintendent has yet to issue an Order to Commence Operations and Carry On Business, but such orders typically follow within a month (two at the most) of a bank Letters Patent being issued. The OSFI website typically doesn't add financial institutions to its "Who We Regulate" page until an Order to Commence and Carry On has been issued, so such an order is like imminent, if it hasn't already been issued (could even be about to be gazetted this Friday or next).

It doesn't look like Peoples Trust Company has launched, or will be launching, a separate website for Peoples Bank of Canada and I don't really expect them to. They'd said in the past that their aim was to be able to issue GICs, and possibly HISAs, to new and existing clients within single online and core banking platforms in much the same way that Oaken Financial does with its Home Trust Company and Home Bank dual issuer GICs.

Note that from my original post announcing the plans, Peoples Trust had planned to convert itself to Peoples Bank of Canada, but likely, possibly as a result of the launch of Oaken Financial and EQ Bank, decided on either refiling, or filing an amendment to, its application such that Peoples Bank of Canada would be a new financial institution. This could likely explain the extended delay in getting its bank license, nearly five years later.

For its part, EQ Bank has since been given a trust company subsidiary in Equitable Trust and the OSFI superintended has granted it permission to carry on business and commence operations; however, because it's a trust company, with the powers to trustee and custody registered plans, act as an estate administrator, and so forth, it requires concurrent provincial approval by regulators in each of Canada's 10 provinces and 3 territories. Nevertheless, by the end of the year, I fully expect we'll have Peoples Trust Company/Peoples Bank of Canada and Equitable Bank/Equitable Trust joining Home Trust Company/Home Bank and the "Big 6" banks + HSBC offering bank and trust company HISA and/or GIC issuers. sf-cool

Cheers,
Doug

July 23, 2019
9:19 pm
Loonie
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We will look forward to these changes, then, as they wil double our CDIC coverage at each of these two FIs.

November 4, 2019
2:08 pm
Doug
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OSFI's Superintendent, Jeremy Rudin, has signed the Order to Commence Operations and Carry On Business to Peoples Trust Company's Schedule I chartered bank subsidiary, Peoples Bank of Canada, retroactively effective October 16, 2019.

Details: http://www.gazette.gc.ca/rp-pr.....g.html#ne5

I don't expect Peoples Trust Company to launch a separate website but, rather, expect them to initially launch Peoples Bank direct-to-consumer and brokerage GICs. DtC GICs are expected to be coded via a product code of some sort to distinguish them in PTC's banking system from PTC and PBoC GICs.

Cheers,
Doug

Note: In the Canadian context, PBoC refers to Peoples Bank of Canada, a privately chartered retail bank wholly owned by Peoples Trust Company. In China, PBOC refers to the Chinese central bank.

November 5, 2019
5:14 am
Briguy
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Peoples Trust are still appealing the 16.8 million dollars they owe in that prepaid gift card class action lawsuit so I'm surprised that all this other activity of forming a national bank is going on. I do like dealing with them, so I wish them the best in this endeavour.

November 5, 2019
12:44 pm
Doug
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Briguy said
Peoples Trust are still appealing the 16.8 million dollars they owe in that prepaid gift card class action lawsuit so I'm surprised that all this other activity of forming a national bank is going on. I do like dealing with them, so I wish them the best in this endeavour.  

@Briguy, it's important to point out that the prepaid credit card balances do not appear to be included in Peoples Trust Company's annual report; while the company may issue the card, the cards would appear to be on affiliate Peoples Card Services, L.P.'s balance sheet—a related entity owned by Peoples Group. Also, in terms of lawsuits, it's a pretty trivial one, particularly since Vancouver City Savings Credit Union's prepaid credit card and corporate gift card fees are even more egregious.

Cheers,
Doug

November 5, 2019
3:27 pm
Nehpets
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Doug said ....the cards would appear to be on affiliate Peoples Card Services.....Vancouver City Savings Credit Union's prepaid credit card and corporate gift card fees are even more egregious......

I don't have experience with prepaid credit cards. What's the problem with these cards or at least what is the alleged issue with Peoples Card Services and Vancouver City Savings?

Should there be any concern about the stability of Peoples Trust and this aspect of their business when investing in Peoples Trust GIC's?

Stephen

November 5, 2019
4:53 pm
Doug
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Nehpets said

Doug said ....the cards would appear to be on affiliate Peoples Card Services.....Vancouver City Savings Credit Union's prepaid credit card and corporate gift card fees are even more egregious......

I don't have experience with prepaid credit cards. What's the problem with these cards or at least what is the alleged issue with Peoples Card Services and Vancouver City Savings?

Should there be any concern about the stability of Peoples Trust and this aspect of their business when investing in Peoples Trust GIC's?

Stephen  

I don't know the particulars of the PTC/Peoples Card Services L.P. or Vancity gift cards/prepaid credit cards, but presume it is related to exorbitant fees being charged and disclosure issues?

As for stability, quite right. I agree with you there that a PTC/Peoples Card Services L.P. lawsuit re: their prepaid credit cards/gift cards would no bearing on the safety of these GICs. The potential financial penalty they're facing is well covered by one year's of annual profit for PTC, so they shouldn't need to raise equity or anything if their appeal is unsuccesful.

Cheers,
Doug

November 5, 2019
11:48 pm
Loonie
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A lot of the prepaid cards sold in grocery stores are issued by Peoples; and some of them do have or have had nasty fees. These include monthly fees, transaction fees, inactivity fees etc., which can drain the card.
Need to read the fine print on any you might buy or receive, especially this time of year as they are often popular as gifts. I would like to think this practice has stopped but am not sure it has. Caveat emptor!

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