* Cambrian will be closed on Friday September 30 for the National Day for Truth and Reconciliation
 

How are credit unions different from banks?

Cambrian Credit Union Head Office

More Manitobans belong to credit unions than any other financial institution, yet many don’t quite know how to explain the difference between credit unions and banks. A closer look at two key characteristics of credit unions helps explain why these institutions are so popular in Manitoba.

Credit Unions are locally owned

The biggest difference between a credit union and a bank is the ownership structure. While banks are corporations geared towards making profits for their shareholders located worldwide, credit unions are financial co-operatives owned and controlled by the people they serve. To join a credit union, you must purchase a membership share that gives you a vote in how the credit union is run and a share in the profits earned by the institution.

Credit unions are provincially regulated, meaning that they cannot operate branches outside of their province of origin. While many credit unions operate in multiple locations across the province, all can trace their roots to local Manitoban communities where their members still live and work today. Credit unions have always been proud of these local roots and understand that focusing on a healthy and strong community benefits everyone – credit unions and their members included.

Credit Unions are community-focused

This community focus takes many forms, including donated employee volunteer time, local sponsorships, scholarships, and more. In 2015 the 33 credit unions serving Manitoba paid 3.4 million in sponsorships and donations and awarded over $165,000.00 in scholarships.

Manitoban credit unions also employ over 3,300 employees, positively impacting many families in our communities.

In 2021 we committed $280,527 in donations and provided $116,194 in sponsorships to various activities and initiatives in the community. You can see some of our events by searching #CambrianCommunities on Facebook and Instagram.

People Before Profit

To be clear, this doesn’t mean credit unions are not profitable. It just means that their goals have a different focus. Remember that credit unions are owned by their members, so profits are not paid out to shareholders but go back to the membership directly in many ways and are allocated for the benefit of the membership overall.

Some of the benefits to members are financial. Most credit unions offer their members preferential rates on loans and deposits, which are usually more competitive than those offered by chartered banks. Others offer options for their members to reduce or eliminate the service fees they pay monthly.

Other benefits to members come in the form of improved access or services from the institution. Profits are reinvested back into the credit union to help develop ways to make banking more convenient for the membership, such as new branches or improvements in technology. These investments haven’t gone unnoticed. According to the 2021 Ipsos’ Best Banking Awards, credit unions ranked first overall in Customer Service Excellence and Branch Service Excellence for the 17th consecutive year. Canada’s credit unions have achieved an incredible feat in being recognized for their excellence in customer service for 17 consecutive years. “This recognition is truly a reflection of the member-focused service credit unions provide,” explains Martha Durdin, President and CEO of the Canadian Credit Union Association at the 2021 IPSOS Financial Services Excellence Awards.

 

So what does this mean for me?

Credit unions have always been a little different from banks, but if you ask most of their membership, they’ll say it’s in a good way. As a credit union member, you are more than just a customer. You are an owner and you are treated accordingly.

So why is the credit union system is so popular in Manitoba? Visit a credit union today, and you’ll find out.