
Proving Misconceptions Wrong and Profit with a Purpose Right
More than a way of life: making money, saving money and securing a comfortable future is first and foremost for many. We learn the value of a dollar early on and try our best to keep our pockets full, wallets heavy and accounts in order. We tend to limit our thinking when it comes to choosing a financial institution. It’s the place where we save money, not where we make it. Depending on its profit structure and business model this is only sometimes true.
As a financial institution based on principles, credit unions (CUs) proudly offer a not-for-profit business model.
Leading the shift in thinking towards banking local and a member-centric profit and performance paradigm, credit unions are bound by a refreshing common thread: giving back to the local communities they operate in and making a difference.
Without sales targets to hit and shareholders to answer to, profits go back to customers through annual profit sharing and in the form of no or low fees and competitive rates. As a member-owned and member-run institution, credit unions provide an understanding of financial realities and equal opportunity.
Although CUs are rooted in social and community alignment such as developing the local economy, supporting the community and growing local families and businesses, a number of general misconceptions are tied to their brands. These misunderstandings have led to confusion and doubt and left a lasting impression. Beyond fundamental gaps in understanding, credit unions need to overcome the challenge of connecting with those who aren’t aware of the alternative. According to research by Canadian Credit Union Association (CCUA) on national awareness, 39 per cent of non-members have no knowledge about credit unions. This number is even higher in the Greater Toronto Area.
Often associated with being small, disconnected and behind the times, some believe that credit unions target a niche market and are limited in their financial capabilities. This is not the case. While teachers, farmers and ethnic groups have a long history of depending on credit unions for support, no membership restrictions exist. Just like big banks, CUs are open for everyone to join (free of an annual membership) and offer a full range of products and services with the same convenient access. To be clear: credit unions provide everything from savings and chequing accounts to mortgages, loans and investments and promise branch, mobile and online services. With an extensive national network of ATMs available, CUs are easily accessible for those outside of small towns and rural communities. Above and beyond the big banking system, as drivers of the local economy and community investment, CUs offer entrepreneurs and small business owners specialized microloans.
Perhaps surprising, credit unions are not new, not unsubstantial and not vulnerable. Established in 1901, CUs serve 5.6 million Canadians and offer the same or higher deposit protection as banks. A flip from the considered under-performer, credit unions are a results-oriented financial partner capable of delivering profit in more ways than the banks. By increasing customer service and financial literacy, practicing a personalized approach and fostering innovation, credit unions build confidence and enhance the full member experience. Credit unions have continued to push social and digital boundaries by being the first financial institution to allow a woman to borrow under her own name and the first to allow a member to deposit a cheque by phone and pay by debit.

By promoting the bank local movement, members are encouraged to keep their dollars close to home where it can do the most good.
Thanks to the multiplier effect, dollars are passed through local businesses and invested back into the community.
This in turn raises wages, grows jobs and increases community value. With a credit union as the local bank, community members benefit from a financial institution that exists on the ground and a limited distribution of wealth. By building strong relationships and connecting to residents, families and small business owners, CUs know first-hand the people they serve and the neighbourhoods they are part of.
A change from big banks, credit unions work with their members’ best interest in mind. All of them are treated equally, known by face and name. Never fee gouging, taking advantage or reflecting mistakes, CUs provide honest advice and keep their values close. Directing all of their profits towards rewarding their members and improving their overall banking experience, credit unions represent doing good and making money at the same time (a rare, but winning combination). By supporting a not-for-profit paradigm, members back financial fairness and profit with a purpose. And everybody wins.
