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B.C. Credit Unions insure entire deposit

Central 1 Credit Union website
Shannon Rupp

Banking with B.C.’s credit unions became even safer with new legislation that guarantees member deposits are insured for the entire amount. As of November 27 2008, members at B.C.’s credit unions are insured for the maximum amount of their deposits, including any accrued interest. By contrast, customers at commercial banks are insured to a maximum of $100,000.

The change to unlimited deposit insurance offers credit union members additional peace of mind and puts B.C. on par with Alberta and the rest of the Western provinces. Ontario still limits deposit insurance to a maximum of $100,000, and Quebec, New Brunswick, and Newfoundland limit coverage to $250,000.

In B.C., credit union deposits are insured by the Credit Union Deposit Insurance Corporation (CUDIC), a government corporation that is part of the prudent financial management system that has helped earn Canada its long-held reputation for having the world’s most stable banking system.

Full deposit insurance is one of the automatic benefits of becoming a B.C. credit union member and it covers all money on deposit, including the funds placed in non-equity shares and foreign currencies (and the accrued interest). The insurance applies from the moment money is deposited, regardless of the length of term to maturity, and can be claimed, immediately, in the event of a disaster.

Only investment vehicles such as mutual funds or RRSP equity plans are not covered.

B.C.’s provincial government made the changes to the Financial Institutions Act as part of plan to address the international economic chaos triggered by U.S. bank failures. Although B.C.’s credit unions are governed by the Financial Institutions Commission (FICOM) and are subject to far more stringent rules than their American counterparts, the move to increase deposit insurance is typical of the cautious practices that have earned Canada its reputation for fiscal prudence.

But as Premier Gordon Campbell noted when he announced the changes to deposit insurance (along with a host of measures to armour B.C.’s economy) international financial turbulence has an inevitable impact on Canada. Although the U.S. economic meltdown has been felt most acutely in Central Canada, where the manufacturing economy is suffering the woes of its major trading partner, B.C.’s  provincial government didn’t wait to take action.

“The ripple effects are being felt in every corner of the globe and every region of our province. There are no easy solutions to these problems,” Campbell said in a news release. “However, we are going to act immediately to alleviate the impacts and to emerge stronger than ever.”

3 Mar 2008