Frequently Asked Questions
Q. We hear a lot about banks these days but what about credit unions? Are credit unions growing in size and importance?
A. Very much so. Membership and assets are increasing steadily. Let's look at KCCU as an example.
Since the current CEO Jon Dessau began working at KCCU in 2000, KCCU was approximately $40 Million with 7,700 members and reserves of $2.5 Million and 27 employees. There are now over 12,000 members with reserves of approximately $13 million and assets of over $140 million with over 40 employees.
Nationally, there are over 10 Million Canadians who have more than $340 billion invested in Credit Unions and Caisses Populaires across Canada, with over 2,900 branches. In Ontario alone, there are over 90 credit unions serving 1.4 million members, employing over 6,000 people holding over $40 billion in assets.
Q. How secure are credit unions?
A. No one has ever lost a dollar that was held on deposit in an Ontario credit union.
The record shows that your funds are safe in a credit union. In our case, Kingston Community, we have a very strong foundation and first rate financials. We meet and exceed all regulatory requirements.
Following strict business guidelines, we report on a monthly basis to the Deposit Insurance Corporation of Ontario (DICO). It provides the same kind of protection for members as that afforded to customers of other financial institutions. Member deposits are insured to $100,000 dollars, plus we have the advantage in that deposits held in registered plans are fully insured with no maximum amount. Registered Savings Plans include RRSP (Registered Retirement Savings Plan), RRIF (Registered Retirement Income Fund), RESP (Registered Educational Savings Plan) and TFSA (Tax-Free Savings Account).
The Financial Services Commission of Ontario (FSCO) requires high standards and we exceed those standards. Our reserve fund exceeds the requirements set by the ministry. We meet provincial and national standards through the Central 1 and the Canadian Credit Union Association.
Q. Banks also emphasize personal service in national advertising campaigns. When it comes to service, what is the difference between the Credit Union and the Bank?
A. The people to whom we provide service -- our members -- are our owners.
Working for the Credit Union, we work directly for the people who own the business. We are in business to provide a fair and equitable return to all of our members. A very personal bond is established. Our personal service goes beyond that of other financial institutions. We sit down with people and show them how to manage their budget. Here is an illustration of the differences between credit unions and banks..
Often, we work in a personal way to help people get out of debt. When we talk about loans, we don't employ any impersonal point system. To us, the character of the individual is more important than judging a person by the number of points scored on a test.
Banks exist strictly to maximize profits for a few shareholders. We exist to provide service and a fair return to all our members; they are our owners. We operate using the seven co-operative principles ( co-operative principles video).
Q. Are there any more differences between credit union's and other financial institutions -- when it comes to service?
A.The biggest difference is that while everybody talks about personal service, we actually provide it. For instance, our staff is stable with very little turnover, year-to-year. We have a staff who really care about the people they serve.
Our members and staff likely know one another on a first-name basis. If a member loses a job, he or she knows that advice and friendship is available. Staff can help the member budget and help determine the best method to invest.
Beyond being good listeners, our staff are professionals and are constantly taking courses to renew their knowledge of financial services.
Q. Speaking about financial services, does the Credit Union offer a wide range?
A. We offer all the services that a person expects from a financial institution.
All the customary services are available -- such as Chequing and Saving Accounts, Term Deposits/GICs, Mutual funds offered through Credential Asset Management, Loans, RRSPs, RRIFs, TFSAs, Mortgages, Lines of Credit, Automated Teller Machines (ATMs), MemberCard® debit cards, Interac® and Mastercard.
Credit unions have been innovators in the services offered. Because members wanted mortgage arrangements that best suited them, we developed the weekly and bi-weekly payment options.
Many are surprised at the diverse range of services we offer -- from financial advice to budget counselling and planning, from credit insurance products to low rate financing for dealers' customers, for home repairs, renovations, automobiles, boats and just about anything that might require financing. We are a one-stop financial service centre. We offer consumer (member) advocacy and education. An example of this is "It's a Money Thing". This is a series of videos and graphics which explain as in this example, the differences between credit unions and banks. Other topics include understanding how to improve your credit score, budgeting basics, the power of compound interest, identity theft, co-operative principles , comparing payment cards and more.
Q. What is the appeal of Credit Unions that has lead to this increase in membership and assets?
A. Most people see us as a full-service banking alternative.
We are no longer just the place to borrow fifty dollars until pay day. People have discovered that we can provide the financial services that they need. For our members, we are their primary financial institution.
Many people do business with us because they see us, the Credit Union, as compatible to their way of thinking. For instance, they appreciate that their dollars stay in the community and that our investments are always ethical.
People like the personal nature of the credit union. They like the fact that we treat our members and staff with the respect they deserve. People deal with us because we are not tied to some head office who are detached from the day to day operation. If they want to talk to the top, the top is right here and always accessible.
In addition to local, personal appeal we are able, through international connections with Mastercard, Interac®, Plus and many others to provide our members access to financial facilities around the world. Credit union's focus on their members has been recognized by Synovate who ranked credit unions as #1 in service and in online banking for the past eleven years.
Q. How can I find extra money to put away for my kids education?
A. We encourage you to go over your financial situation with one of our financial advisers.
If you owe money on credit cards, it's good to consolidate and not only save money with a lower interest rate, but also improve your cash flow which you can then place in an RESP.
Q. How can I save money with weekly or bi-weekly payments?
A. Because you pay more often, you pay the principal down faster. Because the principal is paid down faster, you pay less interest.
Q. What are the Credit Union Rates for LOANS, MORTGAGES and INVESTMENTS (RRSPs and GICs)?
A. In most cases we will match or beat the rates available at the big banks for all mortgage, loan and investments at your Credit Union. Please give us a call and see what a difference it can make dealing with your local community credit union.
*Mutual funds are offered through Credential Asset Management Inc. Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Please read the prospectus before investing. Unless otherwise stated, mutual funds and other securities are not guaranteed, their values change frequently and past performance may not be repeated. ®Credential is a registered mark owned by Credential Financial Inc. and is used under license.