What is a credit union?

October 10, 2019

Are you considering banking with a credit union? You may be asking yourself, “what’s a credit union anyways?” or “what’s the difference between a credit union and a bank?”

Although both types of financial institutions provide services such as chequing accounts, investments, and loans, the main difference between banks and credit unions is in how each institution is run.

Credit unions are financial cooperatives that are locally owned by their account holders — at Libro, these are known as our Owners. Credit unions reinvest profits back into the business, issues dividends to members, and invest in local community initiatives. Like banks, credit unions have both physical branches, ATMs and online and mobile banking.

What kind of accounts can you hold at a credit union?

Whatever your banking needs may be, you can likely open an account at a credit union to help you achieve your goals. Libro Credit Union offers chequing and savings accounts, mortgages, loans, credit cards, and investment and retirement products.

Who governs a credit union?

As credit unions like Libro are owned by their account holders, we value democratic governance to ensure our Owners’ best interests are top-of-mind.

Board of Directors at a credit union

A credit union’s board of directors is volunteer-run and elected democratically, with each credit union member getting one vote regardless of how much they have invested at the credit union. The Board of Directors at Libro ensures our Owners’ interests continue to be considered first in all that we do.

Owner Representatives

In addition to a Board of Directors, at Libro, our Owner Representatives are ambassadors who are highly informed on how Libro can make a positive impact in their local communities. Libro’s Owner Representatives carry the vote on behalf of our Owners to make informed governance decisions.

How are credit unions regulated?

Credit Unions in Ontario are provincially regulated and adhere to certain federal requirements. We work with the Financial Services Regulatory Authority (FSRA) as our regulator and other government agencies to ensure our Owners are protected.

Are credit unions safe?

Credit union members have protection equal to, or higher than, the big banks. In Ontario, all credit unions are insured by FSRA.

FRSA helps keep Ontario’s credit unions safe by providing deposit insurance and regulating their activities, automatically insuring deposits up to $250,000, with eligible deposits in all registered plans being fully insured, including RRSP, RESP, RRIF, and TFSA. There are some deposits and investments that FRSA does not insure, such as mutual funds and stocks.

If you’re ready to bank differently, a Libro Coach can answer any questions you may have — contact us today!

By Libro