What Happens in a Failure

Financial Institution Restructuring Provisions (FIRP)

CDIC can take control of the failing member for a short time to complete its sale, merger, or restructuring. This ensures that the bank continues to offer financial services and that depositors have access to their money. These powers are referred to as CDIC’s Financial Institution Restructuring Provisions (FIRP). 

Before taking this course of action, CDIC must ensure that there is a viable buyer, that a transaction is likely to be quickly completed, and that the transaction meets CDIC’s objectives of protecting depositors and promoting financial stability.  

To learn more, consult our backgrounder on the Forced Sale resolution tool


Will I lose access to my accounts during a forced sale or FIRP scenario? 

No. The bank remains open for business. You continue to have full access to your deposits and benefit from CDIC’s deposit protection. You also continue to have access to regular banking services. 

What happens to my CDIC deposit protection if my bank is purchased by another bank, but they remain separate CDIC member institutions?  

CDIC member institutions can be bought and sold, just like any other business. Regardless of the transaction details, CDIC’s deposit protection continues to apply to pre-existing deposits made prior to the change. 

If my bank is merged with another CDIC member, what happens to my protected deposits?

Pre-existing deposits would continue to be insured up to $100,000 in each of the separately protected categories. 

Term deposits: separate protection applies until they mature or until the money is withdrawn, whichever comes first. 

Demand deposits (e.g., deposits in chequing accounts): separate protection remains until the money is withdrawn.  

Any additional eligible deposits made after the merger will be added to those existing deposits, and the total will be insured to a maximum of $100,000.  

If my bank is purchased by a non-CDIC member, do I lose my CDIC protection?  

If a CDIC member is purchased by a non-member company, The bank remains a CDIC member and deposit protection continues as before. 

What happens to the bank’s shareholders and creditors while CDIC is in control?  

The bank’s shares and subordinated debt will be vested in CDIC, which becomes the sole shareholder. 

The CDIC Act has a safeguard for shareholders and creditors. The Act is used to determine the amount of compensation, if any, to be paid to shareholders, who might be in a worse financial position than they would have been had the institution been liquidated. 

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