Market Turbulence

Financial Market Turbulence and You

Like most Canadians, credit union members are worried about the current turmoil in the financial markets. Many want to know if their credit union remains sound and reliable, and whether their deposits are safe. The answer to both questions is: Yes.

Here’s why you can continue to count on your credit union:

• The credit union system is thriving and continues to grow. Assets of the B.C. system stood at more than $42 billion at year-end 2007, up almost 60 percent in just the past five years.

• Credit unions in Canada have high deposit levels sourced mainly from local credit union members rather than global capital markets. This provides a stable deposit base relative to other financial institutions in Canada, the U.S. and elsewhere. In B.C. alone, credit unions have $37 billion on deposit, representing growth of almost 50 percent over the past five years.

• Credit unions and other Canadian financial institutions do not offer sub-prime mortgages – a chief cause of the current turmoil in the U.S.

• Credit unions loan prudently in communities where we live, work and serve. As a result, our loan delinquency rates are exceptionally low by historical standards.

• Credit unions have more than 150 percent of the capital reserves required by regulators. Eighty percent of these are retained earnings, which are funds accumulated from years of profitable operation.

• Credit unions maintain high liquidity levels, ensuring funds are available to meet obligations to depositors at any time, including during periods of financial market upheaval.

• The provincial government of B.C., through the regulator, the Financial Institutions Commission of B.C., provides strong oversight of credit unions.

• The Credit Union Deposit Insurance Corporation of British Columbia (CUDIC), a provincial corporation administered by the Financial Institutions Commission, an agency of the B.C. government, provides deposit insurance for deposits at credit unions.

• On November 27, 2008, the Provincial legislature passed amendments to the Financial Institutions Act to provide unlimited deposit insurance protection on all deposits in British Columbia's credit unions, through the Credit Union Deposit Insurance Corporation (CUDIC). All money on deposit and money invested in non-equity shares of a BC credit union is 100% guaranteed, including foreign currencies and accrued interest, regardless of the length of the term to maturity.

Click here for more information on deposit insurance

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