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CCUA Largest 100 Credit Unions
October 11, 2020
12:35 pm
AltaRed
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I don't know what these institutions are going to do when fintech really takes hold in this country. The Economist has had a number of articles in recent months and years on how the transition is happening and how fast. "Banking transactions" is only the surface of an integrated fintech approach..that will incorporate payments systems, investment products and even online commerce. The cashless society in effect.

I think the bigger CUs want to be in the game and it will be 'go big or go home'. The small players will more likely be gobbled up, fade/shrink as the older demographic dies off, or remain very locally focused serving small communities only where no one else wants to be. Don't know if I will fully see it in my remaining lifetime but it seems to be coming like a freight train.

October 11, 2020
3:17 pm
Norman1
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Unfortunately for them, the fintechs have no money. Some of them barely have enough money to keep their own lights on for the following year!

When someone needs a mortgage or a small business operating line of credit, the person will need to find a lender, like a bank or credit union, that has money to lend.

October 11, 2020
3:32 pm
AltaRed
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What I am reading though is not about the 'end point', i.e. the institutions providing deposit accounts or the source of loans, but the platforms by which one will access all these products and services.

An app on one's phone, even something obscure like Uber app, could be the access point to apply for a mortgage or deposit a cheque with the institutions that app (Uber) has partner associations with. The way to accessing one's EQ Bank account might be through the 'Skip the Dishes' app.

We can (most actually) access CRA MyAccount now via 'partner sign-in' through our big bank home pages. Same with Service Canada. And Transunion or Equifax credit scores.

The bigger banks may actually figure it out such we access our eBay account via our big bank home page. Much more is coming and the question is who is going to be in the forefront to providing these services.

I don't know where it is going but I'd sure like to not have to have separate login credentials for over 100 accounts ranging from National Car Rental to my Utility gas account.

October 11, 2020
3:45 pm
Loonie
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Norman1 said
If credit unions can now spend major amounts of money on stadium naming and sponsoring sports teams, then may be it is time credit unions start paying regular corporate taxes like their other competitors do!  

I'm sure the big banks deduct their sponsorships and so on as either charitable or marketing expenses, so that those funds are not taxed.

October 11, 2020
5:54 pm
Bill
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Credit unions not paying corporate taxes on net profits, which is what I understand Norman1 to be saying, is not the equivalent to not paying taxes on certain expenses deductible by both banks and credit unions.

Re low rates of large credit unions, if I was an FI that attracted people at least partly because they want to virtual signal that they're anti-big business, that they're part of a "movement", you're darn right I'd pay low savings rates to that captive audience, they're not going to my big bank competitors anyway.

October 11, 2020
8:44 pm
Loonie
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That may be what you thought Norman meant. It may even be what he intended to communicate. But it's not what he said.

Credit unions don't and won't pay tax on "net profits" because they don't have "net profits". They are registered non-profit organizations. Any surplus either stays with the CU to meet various needs, is donated to other charities or non-profits, or is returned to members in rates or dividends (if you bought extra shares). These dividends do not receive the Dividend Tax Credit that bank shareholders receive.

Banks are for-profit corporations, and that's why they are eligible to pay taxes. It's also why their shareholders get a big tax break on dividends. If you want credit unions to pay taxes, which I don't recommend, then you'd better be prepared to pay income tax on your dividends and capital gains at the same rate that you pay on GIC income. According to your own past bragging, that amounts to a lot of money. A change like this would, of course, greatly upset the banks' apple carts, and is most assuredly not going to happen.

Your comments about what you'd do if you were running a CU, which you would never happen, show that you don't really appreciate the nature of CUs.
I think it's very safe to say that credit union members are largely motivated by their experiences with both banks and CUs, not by ideology. The minority who may be "anti-big-business" were not born that way; life led them to this conclusion.

October 11, 2020
10:26 pm
Norman1
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Loonie said

I'm sure the big banks deduct their sponsorships and so on as either charitable or marketing expenses, so that those funds are not taxed.

They do. But, it is a deduction and not a credit. So, there is an after tax hit from the sponsorship.

Whether or not they can afford that after tax hit depends on what's left after paying taxes on the income, after deducting the sponsorship.

A $10,000 sponsorship with $1 million income and a 15% tax rate means that there would be ($1 million - $10,000) x (1 - 0.15) = $841,500 left.

In contrast, with a 0% tax rate, there would be ($1 million - $10,000) x (1 - 0.00) = $990,000 left.

If $900,000 after tax profit were needed for next year, then a $10,000 sponsorship is not affordable with a 15% tax rate. However, with a 0% tax rate, the $10,000 is easily affordable. In fact, a more generous $100,000 sponsorship becomes affordable with the 0% tax rate!

A lower tax rate is an enabler. I think the intention was to enable more money to be available for members, like more money to fund mortgages for members. I don't think the intention was to enable credit unions to start funding stadiums and major sports teams.

October 12, 2020
6:24 am
Bill
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Norman1's numerical example illustrates precisely what most of us understood him to mean, it should help. And what virtue-signalers call a credit union "surplus" is what I call net profit, same diff, same as competitors. Net profits of big banks are used to pay taxes, to "meet various needs" of the operation like employee raises, returned to customers in rates or to owners in dividends, etc, i.e. same thing.

You called it a "movement", then retract by saying it's not about "ideology". Whatever. But it's the unprecedented wealth created by the recent (1st time in history) rise of international big-business that has led (among many other things, such as general prosperity to the 99%) to the sexual liberation of women (growing world-wide every day, something to be thankful for today on Thanksgiving) - credit unions would take us back to some locavore, communal past when such sexual liberation was but a dream, it's partly why very relatively few people deal with them and why I say "no thank you!" And you're right, Loonie, some of us at times here have referred to our absolute delight at being invested in big banks over the last few decades, I can tell you it IS an awesome feeling (didn't someone say something once about it not being "bragging" if it's true?), and I'm quite happy if credit union customers can say the same thing.

October 12, 2020
7:41 am
Yatti420
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CCUA TOP 100 CREDIT UNIONS - LARGEST 100 CREDIT UNIONS

As Of 2020 - Q2 (14SEP20)

https://ccua.com/app/uploads/private-files/top100-2Q20_14-sep-20.pdf

October 12, 2020
8:09 am
Norman1
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AltaRed said
What I am reading though is not about the 'end point', i.e. the institutions providing deposit accounts or the source of loans, but the platforms by which one will access all these products and services.

An app on one's phone, even something obscure like Uber app, could be the access point to apply for a mortgage or deposit a cheque with the institutions that app (Uber) has partner associations with. The way to accessing one's EQ Bank account might be through the 'Skip the Dishes' app.

We can (most actually) access CRA MyAccount now via 'partner sign-in' through our big bank home pages. Same with Service Canada. And Transunion or Equifax credit scores.

I don't know where it is going but I'd sure like to not have to have separate login credentials for over 100 accounts ranging from National Car Rental to my Utility gas account.

Those are no longer technology issues. The issue is pricing.

There are lots of login providers now. For example, one can sign onto the Globe & Mail using one's login from Facebook, Google, or LinkedIn. If Globe & Mail were to sign up for the SecureKey service that CRA uses, then one would be able to sign onto the Globe & Mail too using one's BMO, CIBC, Desjardins, RBC, Scotiabank, or TD online banking login.

Technology is there. But, does the Globe & Mail, National Car Rental, or a utility company want to pay what Facebook, Google, LinkedIn, or SecureKey charges?

Same with accessing EQ Bank through the 'Skip the Dishes' app. It is easy to add a link to an app. But, would EQ Bank want to pay 'Skip the Dishes' for that link or ad?

October 12, 2020
8:38 am
AltaRed
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Norman1 said
Technology is there. But, does the Globe & Mail, National Car Rental, or a utility company want to pay what Facebook, Google, LinkedIn, or SecureKey charges?

Same with accessing EQ Bank through the 'Skip the Dishes' app. It is easy to add a link to an app. But, would EQ Bank want to pay 'Skip the Dishes' for that link or ad?  

That is indeed the discussion and argument well underway, particularly in some other regions of the world. The answer is apparently yes, at least to some degree, as a means to draw new customers/clients. It all seems improbable but that is because we haven't thought about it that way. Not that many years ago, we would have never considered logging in to numerous sites via Facebook, Google, LinkedIn. I still wouldn't for anything important but apparently many do.

October 12, 2020
10:40 am
topgun
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AltaRed said

That is indeed the discussion and argument well underway, particularly in some other regions of the world. The answer is apparently yes, at least to some degree, as a means to draw new customers/clients. It all seems improbable but that is because we haven't thought about it that way. Not that many years ago, we would have never considered logging in to numerous sites via Facebook, Google, LinkedIn. I still wouldn't for anything important but apparently many do.  

I found something interesting on Google October 1st. I created an account. I downloaded the information. Several days later I deleted the account. It was easy. A rarity that I need these types of accounts.

Have a Great Day

October 12, 2020
10:59 am
hwyc
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hwyc said
... ICYMI 2020 Q2 reports are out. ... some pastime during this COVID-19 altered Thanksgivng ... stay safe  

The Q2 charts seemed to agree with recent rate drops - loan growth trending downward while deposit growth is not.

... only 8 months ago I rejected without hesitation the notion of 5 yr GIC @ 3%, now there's a voice inside my head tempting me to go for the 5 yr @ 2%, sigh

October 12, 2020
12:21 pm
topgun
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The number of members is more than reality. Some people belong to more than one. It would be difficult to determine actual memberships.

Have a Great Day

October 12, 2020
3:47 pm
Loonie
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I'm interested in rational arguments but see no point in wasting my time on a detailed reasoned response to Bill's last post where he rants on about the sexual revolution as if it had something to do with credit unions, about bank stock dividends as if they had nothing to do with taxes, and about his great joy in receiving said dividends. He has moved the goalposts, and he will do it again if I respond. That's what trolls do.

And as for bragging, it's still bragging, whether or not it reflects some true event - and tiresome when repeated so often, not to mention boring. Who cares?

I'll give some thought to what Norman has said later, but, off the top, it doesn't make sense to me.

October 12, 2020
4:56 pm
Bill
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Bragging (says the person who not too long ago referred to his acquaintances wondering how he has so much money), waste of time, rants, tiresome, boring (and then the conclusion is I'm the troll, I see what you're doing) but you continue to be pretty much my most devoted reader. That's "who cares". Anyway, don't forget that comparing bank to credit union ownership focusing only on the dividends misses half the joy, there is also the joy of substantial capital gains over the decades. And taxed at low rates - with the opportunity to offset with other realized capital losses, if any. I'm not familiar enough with credit union share ownership to know if they got the same capital appreciation bang over that time period, did they?

And I do agree with Norman1, what are non-profits doing spending money on funding stadiums and pro sports teams?

October 12, 2020
5:28 pm
AltaRed
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Bill said
And I do agree with Norman1, what are non-profits doing spending money on funding stadiums and pro sports teams?  

Guess it is just another form of advertising rather than just radio, print, internet and TV.
Here is another one that everyone locally knows very well https://www.kelownanow.com/watercooler/news/news/Kelowna/Prospera_Place_naming_rights_extended/#fs_73858

October 12, 2020
7:51 pm
Loonie
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Yes, of course it's advertising. No different than Scotiabank Giller Prize, RBC's sponsorship of the Canadian Open (golf) and so on. It's all part of doing business, whether bank, CU, telecom or whatever.
Or did you expect the CUs to uniquely get by without advertising?

October 12, 2020
8:44 pm
AltaRed
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There's been no objection from me...

October 13, 2020
5:53 pm
Norman1
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Loonie said

I'll give some thought to what Norman has said later, but, off the top, it doesn't make sense to me.

It may help to keep in mind that credit unions are a not-for-profit organization and not a non-profit one. There is a profit for them.

Credit union do need some profit to expand their capital base to keep making loans. Otherwise, they will hit a limit in their risk adjusted capital ratios, just like a bank would, and can't take on any more "assets" (loans), regardless of any new deposits coming in.

As well, they need the profit to make up for loans that go bad and the money lent is not fully recovered.

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