Financial Services Co‑Operatives
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SS01 FACT SHEET FACT Financial Services Co‑operatives Introduction Co‑ops in Ontario are governed by the patronage, dividends, or is reinvested into Resources Co-operative Corporations Act; however, credit the credit union and its services. Financial co‑ops (generally called credit Credit Unions unions and caisses populaires are subject to of Ontario unions) are provincially‑regulated, Decisions are made locally — no Ontario different legislation. They are incorporated creditunionsofontario. credit union has a head office located deposit‑taking and loan‑granting financial and regulated under Ontario’s Credit Unions com outside of the province. Credit unions A comprehensive, user‑ institutions. They are member owned, and Caisses Populaires Act (1994). are only permitted to conduct business are mandated by law to follow the co‑op friendly database of Ontario Credit Unions with their members and they operate on principles and adhere to the triple bottom and surcharge free co‑op principles. Caisses populaires are line (social, environmental and economic ATMs. This resource The Difference between also includes a list credit unions which conduct their business Credit Unions and Banks goals). Community involvement for credit unions is the norm and an expectation. of available services, principally in French. In Ontario, credit guidebooks for moving Many credit unions in Ontario offer all of unions form the second largest co‑op sector Banks, in comparison, are owned by your finances and other the products and services banks do, but informative articles (by number of organizations) after housing. shareholders who are primarily interested there are still key differences. For example, regarding Credit Unions in maximizing profits and may not use the in Ontario. There are other types of co‑operatives that customers of the credit union are also the banks’ services at all. The shareholders’ operate in the financial sector. These co‑ops member‑owners of the credit union. When Central 1 Credit Union monetary contribution directly determines central1.com offer insurance and investment services, joining the credit union, members must either directly to members or to other their decision‑making power. It is the The primary liquidity purchase a “share” in the organization manager, payments shareholders, not the consumers of the co‑ops operating in Ontario (or Canada). (making them “owners”), which is returned processor and trade bank’s services, who are eligible to vote at if they close their accounts. association for member Meridian Credit Union, Alterna Savings meetings, elect the board of directors or run Credit Unions in Ontario and FirstOntario Credit Union are some These members elect their volunteer board for directorship. and B.C. of the larger credit unions operating in of directors (which come from within the Canadian Credit Banks are regulated federally and have communities throughout Ontario, while membership itself) in a democratic one‑ Union Association a branch structure that stretches across ccua.com The Co‑operators is a financial services and person‑one‑vote system regardless of the the country. Credit unions, in contrast, are The national trade insurance co‑operative operating across amount of money invested in the credit association for the provincially regulated and must utilize ATMs Canada. Other credit unions are smaller, union. The credit union’s primary purpose Canadian credit and networks such as The Exchange to union system. such as Ottawa Women’s Credit Union, and is to serve the interests of its members, allow their members to access basic banking serve niche markets that may be neglected and as such, any profit or surplus the credit services at another credit union. in larger institutions. union generates is returned to members in SS01 Financial Services Co‑operatives 2 FACT SHEET FOR MORE Credit unions have also historically marketed • issuing of cheque books, certified their members and are accountable to a INFORMATION, themselves as providing superior member cheques and other forms of payment triple bottom line (people, planet, profit) — CONTACT service. Surveys of both bank and credit deliverable by post; corporations are not. Ontario Co‑operative union customers have supported this claim Association • provision of personal loans, commercial 30 Douglas Street by consistently showing a significantly The most well‑known examples of an loans and mortgage loans; Guelph ON N1H 2S9 higher customer satisfaction rate with the insurance co‑operative in Ontario is The Phone: 519.763.8271 quality of service at credit unions. • provision of overdraft agreements and Co‑operators, which have been in business [email protected] charge card advances; and for over 65 years and have over a million ontario.coop In light of the global recession, financial clients across the country. The Co‑operators More resources are co‑operatives have also proven to be more • access to insurance products and mutual available at: was built by farmers to take care of resilient than other banks (according to a funds, among others. CoopZone Network themselves and their communities when coopzone.coop report published by the International Labour It is also worth noting that eligible accounts traditional insurers were not meeting their Organization). Credit unions didn’t face a This is one of a series in credit unions and caisse populaires are needs. The goal of co‑operative insurance of FACTSheets created drop in the economic crisis of 2008 — in fact, covered by deposit insurance, just as they was to work with policyholders to keep by OCA providing they kept on growing slowly, regularly, but general knowledge, would be in a bank. Many credit unions them insured in good times and bad. Many not dramatically. The report also explains best practices, and have embraced technology and offer smart Canadian co‑operative and mutual insurance sector‑specific that financial co‑operatives help to prevent phone apps, tablet apps and other modern companies have roots in rural communities information. the danger of monopolistic supply by options as well. and the agricultural sector, and today, many Get the full list of moneylenders, correcting market failure. mutual insurance companies in Canada FACTSheets online at ontario.coop/ Despite all these differences, many of the remain focused on insuring farm operations. documents_ products and services at credit unions and Co‑operative and Mutual downloads According to the International Co‑operative banks are very similar. Such as: Insurance Companies and Mutual Insurance Federation, • savings accounts; There are other types of co‑ops in the co‑operative and mutual insurers’ market financial services sector as well, such share in Canada is increasing steadily. • chequing accounts; as co‑operative and mutual insurance Between 2007 and 2011, their market share • term deposits; companies. These co‑ops provide all the increased from 16.3% to 19.5% [ICMIF, Market products and services other insurance Insights Canada 2011, 2013]. • financial transactions at branches, companies do, including home, auto, life, through ATMs, or online banking; health, group benefits, travel, commercial • issuing of credit cards and debit cards, and farm insurance, and investment including processing transactions and products. The major difference between billing; corporate and co‑operative insurance companies is their structure. Co‑ops are 100% democratically owned and run by This fact sheet was produced by the Ontario Co‑operative Association, and made possible through a grant from the Ontario Trillium Foundation (an agency of the Government of Ontario)..