Are you ready to unbank?

“Credit unions are probably the last true alternative to banks,” says Mark Ventry, a marketing administrator for the Guelph and Welland Credit Union in southern Ontario. “Our ‘Unbank Yourself’ slogan is our way of telling people we’re a mainstream financial institution with all the services of an ordinary bank with a unique co-operative twist.”

One in three Canadians is a credit union or caisse populaire member, the highest national rate of credit union membership in the world. Two-thirds of Quebecers are members of a caisse populaire (francophone credit union). Membership rates are also high in Saskatchewan and British Columbia,  where the movement first took hold in the “dirty thirties.”

Here are some considerations if you’re thinking about “unbanking”

• Credit unions and caisse populaires are independent, provincially regulated financial co-operatives that provide banking services for members.

• Members must own a share, and shareholders each get a vote at the annual general meeting, receive dividends, and may run for election to the board of directors.

• Closed-bond credit unions limit membership to employees of company or members of a religious, ethnic, trade or professional group.

• Community-bond credit unions open membership to people living or working within their geographic boundaries and usually offer a wider range of financial services. The largest, the 40-branch, 289,000-member Vancouver City Savings Credit Union, owns its own bank. Members access the Citizens Bank of Canada by ABM, Internet or by phone.

• According to Credit Union Central of Canada, the system’s national trade association, Canada’s 632 local credit unions had assets totalling $66.4 billion at the end of 2002.
• The Quebec-based caisse populaire organization, Mouvement Desjardins, reported assets of $89.9 billion.

• Members’ money tends to stay in the community as mortgages, personal loans and small business loans.

• Credit unions developed many services we now take for granted, such as consumer loans, daily interest savings accounts, automated bank machines (ABMs), point-of-sale debits, payroll deductions and ethical mutual funds.

• According to the 2002 Consumer TrendZ Report from Millward Brown Goldfarb, people over age 50 represent 40 per cent of Canadian membership.

• Members, including small business owners, report high levels of satisfaction with their credit unions.

• From 1989 to 2000, the major banks’ share of the small business market fell from 75.5 to 70.4 per cent. Most of that lost business went to credit unions.

• Since 2000, 72 of the branches closed by the big banks in six provinces have been re-opened by credit unions. 

• Special benefits and discounts for older members (some as young as age 55) vary with each credit union.

• Credit unions offer a Gold MasterCard featuring out-of-province/country travel health plan that covers people up to the age of 70 for the first 31 days of each trip outside the home province or country. Additional coverage may be purchased for up to 180 days. Qualification for the card is based solely on income and credit history. (There is an annual fee for this card.)

• Some provinces offer unlimited deposit insurance. Others cover deposits to the same level of the Canada Deposit Insurance Corporation, which covers bank deposits.

• The credit union system has three tiers. Local credit unions are shareholders in provincial centrals, which maintain liquidity and provide them with services such as cheque clearing. Credit Union Central of Canada is the national body serving the provincial centrals.

• Efforts to merge provincial centrals and to create a national co-operative bank have so far not been successful. One reason is that community-based credit unions are reluctant to give up their autonomy.