Скачать или смотреть FinTips Episode 8: What is a Credit Union

In the eighth episode of FinTips Mark explains what exactly a credit union is.

00:55 We’ve been chatting about some important topics when it comes to students, their finances and their education. And it’s been great! There’s been a question I’ve had for a while though. What exactly IS a credit union?

In simplest terms, a credit union is a financial institution just like a bank. We provide all the same banking services and products as a traditional financial institution. Every day products like chequing and savings accounts, borrowing products such as loans, lines of credit and mortgages as well as debit and credit cards, ATMs and online and mobile services too. If you are looking to start a registered savings plan or invest in mutual funds, credit unions offer that too. Unlike banks, credit unions are co-operatives that are owned by their customers. We call them members.

Anyone can become a member and join a credit union by opening a membership. FirstOntario Credit Union is an example of an open bond credit union where anyone in the community can join. A closed bond credit union would only serve members who have a certain bond of association, for example, of a particular profession like teachers. Part of FirstOntario’s history includes starting out as Stelco Employees Credit Union open to those employees only before becoming Avestel Credit Union that was open to everyone. FirstOntario has been serving members for over 80 years and has been part of the Niagara community starting as the St. Catharines Auto Workers’ Credit Union and then Family Savings Credit Union.

02:58 I didn’t realize the history that FirstOntario Credit Union has in Niagara. I do know that a traditional bank has deposit insurance protection for my money and investments. Can a credit union protect my money in the same way?

It is important to know that yes, your money is well protected at a credit union. Credit unions are provincially regulated and each province has their own regulatory bodies, whereas banks fall under federal regulation. In Ontario, the Financial Service Regulatory Authority of Ontario’s (FSRA) deposit insurance program protects deposits held with Ontario credit unions and caisses populaires up to a maximum of $250,000 for non-registered insurable deposits like chequing and savings accounts and deposits in registered accounts like RRSPs or TFSAs, have unlimited coverage. At a Canadian federally-regulated bank, eligible deposits, such as a chequing or savings account, are covered through the Canada Deposit Insurance Corporation or CDIC up to $100,000.

04:08 What else makes credit unions different from a bank?

The biggest difference is co-operative ownership. Shareholders own banks whereas every member of a credit union is a member-owner. When you join as a member of a credit union you have ownership through shares that you purchase. That means that all members have equal ownership and as a member-owner you have a say in how the credit union operates, including a vote for its board of directors. Another difference is that credit unions make decisions that put the members’ needs first and members share in the successes of the credit union through profits or dividends that can be distributed back to members. Another big difference is that credit unions are community based financial institutions with very strong local ties and commitment to strengthening the local community’s economic, social, and environmental well-being.

FirstOntario does this through donations, scholarships, volunteer support and through partnerships with like-minded groups and organizations in the community like Brock University. By working together with the university for example, we are helping to bring financial literacy to students through the FinTips program and through Goodman Lemonade. All credit unions follow the co-operative principles and values of self-help, self-responsibility, democracy, equality, equity, and solidarity. When you deal with a credit union, you know that we believe in putting our members’ needs first and that we have a responsibility to do our part to help build strong communities and for the benefit of everyone. FirstOntario believes in supporting our communities by helping make connections - where together we can and build a stronger tomorrow.

At FirstOntario Credit Union, we are committed to financial literacy. We know that strong financial literacy is key when making confident, informed decisions about money, including when you should spend it, why you should save it and how to make it grow. Brock University FinTips is a video series sponsored by FirstOntario Credit Union that shares information and tips for students on managing money and finances.

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