Estimated reading time: 9 minutes
Have you ever browsed a website and felt part of the family?
That’s how I felt when reading the website about Canada’s credit unions.
Did you know Canada’s credit unions serve over 5.9 million Canadians and employ over 58,000?
While credit unions are just about everywhere, there are also 394 communities across the country where a credit union is the only financial institution with a physical presence.
If you’re in the market to purchase a home and need a mortgage, require a loan for your small business, or seek support for any other financial needs, you may find a local credit union an excellent option.
Today, let’s explore Canada’s Credit Unions for educational purposes, and perhaps you might be interested in banking with them.
Generation Credit Union Users
I asked five people from various generations if they knew about credit unions, and surprisingly, only a baby boomer had the answer.
Why do credit unions seem to be the “hidden gem” of financial institutions in many parts of Canada?
Perhaps this is because their parents used a ‘big 5’ bank where their children subsequently opened a bank account when they grew up.
On a personal note, when I first moved to Canada from the UK in 2007, I went straight to the Big five banks because I didn’t know what a credit union was.
Recently, I spoke with a Canadian Credit Union Association representative, who answered all of our questions.
Keep reading below to learn more about how they operate and serve their communities!
Related: Is my money safe in the bank?
Benefits Of A Canadian Credit Union
Credit Unions Keep Money In Canadian’ Pockets
Credit unions’ commitment to members’ financial well-being and cooperative model helps Canadians hold on to more of their money.
Often, this is from returning profits to members through profit sharing and low/no fees, community investments in donations, scholarships, and other initiatives, and a national network of surcharge-free ATMs.
You’re An Owner, Not Just A Customer
Credit unions are owned by their members – those who bank with them.
All members have an equal say in how their credit union operates, no matter how much or little they have in their account.
Members can voice their concerns and vote on the issues that matter to them.
Credit unions support their communities, strengthen our national economy, and contribute to our economic, social, and environmental well-being.
In 2020, Canada’s credit unions gave back an estimated 4.3% of their pre-tax profits to community donations and sponsorships and $191.2 million to their members through dividends and patronage.
Credit unions tend to have local expertise, which can mean quicker and more personalized decision-making and greater flexibility than banks with a centralized loan department.
More Opportunities For Entrepreneurs
For credit unions, credit underwriting has always focused on looking at a person’s or a company’s entire picture in good times and downturns, not just a current snapshot.
Because of their local nature and because many credit unions take the time to get to know their members, the lending process can be much more personalized with a credit union.
Support With Financial Literacy
Another great value-add is how they help increase financial literacy with their members and communities by providing several great programs, such as the Each One Teach One initiative.
Customer Service Excellence
Canada’s credit unions continue to set a longstanding record with five 2021 Ipsos Financial Service Excellence Awards wins this year, including the award for best customer service, which they have won for 17 consecutive years.
Credit Unions are Highly Regulated and Your Deposits are Insured
Canada’s credit unions are insured, highly regulated financial institutions with a 100+ year track record of strength and stability.
Most credit unions are provincially regulated (there are currently two federally regulated credit unions).
Whether provincially or federally regulated, deposit insurance protects members’ deposits like big banks. In some provinces, that coverage exceeds that of the big banks.
Q1. What Is A Credit Union?
CCUA: Credit unions are full-service financial cooperatives that serve over 5.9 million Canadians.
Like other financial institutions, they provide chequing and savings accounts, mortgages, business loans, and investment advice and are federally or provincially regulated.
Remarkably, this is only a fraction of Canada’s credit unions offer their members.
Q2. Is There A Type Of Clientele That You Are Seeking?
Canadians from all walks of life are credit union members. Still, members tend to skew a bit towards the older generations.
We want to spread awareness and educate the younger generations (particularly millennials) about the fantastic benefits of choosing a credit union.
Q3. What Services Do Unions Provide Their Members?
Credit unions are well-regulated, full-service financial cooperatives.
Like other financial institutions, we provide chequing and savings accounts, mortgages, business loans, and investment advice.
Are you looking to start a registered savings plan? Invest in mutual funds? Bank online?
Credit unions offer that, too.
Q4. How Can Credit Unions Help Prospective Homeowners Get Into The Market?
While it is common for people to seek mortgage loans from traditional lenders such as the ‘big 5’ banks, credit unions are another excellent way for Canadians to get into the housing market.
Credit unions offer their members hands-on services to help them succeed and come out of the process feeling satisfied and successful.
Most people don’t know that credit unions are actually among the largest lenders to homeowners in Canada!
Credit unions have given $131 billion in residential mortgages and recorded the lowest rate of mortgages in arrears at 0.13 percent.
Q5. Where Are Credit Unions Located?
There are 225 credit unions in Canada (outside of Quebec), operating from 1,697 locations and providing banking services to 5.9 million Canadians (Q2 2021).
All credit unions are autonomous organizations.
Most credit unions are provincially regulated – meaning you must live in the province where they operate to become a member.
However, if you move out of the province, you can still keep your membership.
Q5. Do Credit Unions Have Drive-Thru Banking?
Some do, but not all. It’s important to note that no “one size fits all” credit union exists.
They are all different and provide services to suit the needs of their members within each community.
Q6. Can Members Access Online Banking 24/7
Yes, members have full access to online banking.
Credit unions have received multiple IPSOS Financial Excellence Awards for Online Banking Excellence.
Credit unions provide access to thousands of DING-FREE® ATMs across Canada through THE EXCHANGE® and ACCULINK® networks.
It’s an ATM network more extensive than most banks.
Q7. Do Your Members Need X Amount Of Dollars To Join?
When you join a credit union, you must purchase a membership share.
The amount varies from credit union to credit union but is typically a nominal fee, often as low as $1.
The member fee is a one-time transaction and will be returned to you if you decide to leave the credit union.
When you purchase a membership share, you become an owner of the credit union.
As an owner, you have a say in how the credit union is run by voting for the board of directors.
All members have an equal voice — it doesn’t matter how much money you have deposited with the credit union.
All credit unions operate under the “one member, one vote.”
Q8. How Could We Encourage More Canadians To Join A Credit Union?
Our goal is to motivate Canadians to join credit unions by educating them about how they work.
So many Canadians are unaware of credit unions and their benefits.
One of the most significant value propositions is that Canada’s credit unions put their members first and support local communities.
Credit unions are owned by their members — the people who bank with them – which means your bottom line is theirs.
All members have an equal say in how their credit union operates and can democratically vote for its board of directors.
Q9. What Services Do Your Members Have To Pay For?
A lot of credit unions have no or low-fee accounts. Banking packages vary among credit unions.
Q10. Do You Offer Financial Advice For Members Who Are Struggling Financially?
Many credit unions offer financial advice and wealth management services through partners such as AVISO Wealth.
Credit unions also help increase members’ and their communities’ financial literacy by providing several great programs, such as the Each One Teach One initiative.
There is also hands-on member support and financial advice for members when needed.
All credit unions are different and provide services to suit the needs of their members and the communities they serve.
Joining A Canadian Credit Union
For additional information on Canada’s credit unions, visit canadascreditunions.ca.
Both Mrs. CBB and I discussed joining a credit union because of the system’s commitment, dedication, community involvement, and giving back to its members.
Thanks for reading, and thanks to the representative for explaining how a credit union works.
I highly suggest reading this Community & Economic Impact Report to learn more about Canada’s Credit Unions.
Discussion Question For CBB Readers
Do you belong to a Canadian Credit Union?
If yes, please share your experiences below.