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PACE CU to be folded into another CU
April 22, 2022
10:32 am
Norman1
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RWAbacus406 said

It was in the CU building where I was introduced to PACE SECURITIES by an investment counsellor (Tajie Varicat) after the CU manager at the time advised that I was making poor investment choices using GICs.

Unfortunately, Tajie was not an investment counsellor. Not even close.

I looked up the person's registrations in the CSA National Registration Search. Tajie's registration from October 29, 2014 to April 02, 2020 with PACE Securities was as a "Dealing Representative (Investment Dealer)".

In other words, an investment salesperson.

I still have lots of GICs, my TFSA and "high-interest" savings in PACE CU. Is it time now to desert the Bailey Brothers Building and Loan? (AKA: movie - It's a Wonderful Life).

That depends on how you feel about Alterna Savings & Credit Union. That's where the deposits, branches, branch staff, and most of the loans are being transferred to.

April 22, 2022
10:36 am
savemoresaveoften
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I have like $2k and change total in equity shares and some class A shares of some sort? They are supposed to mature and good for withdrawal 2024 I think. Like others I joined in 2018. It was 2X $1k at the time and they matched something. I was too nice to agree and decide to throw the advisor a $2k bone...
I already assume I will never see that $2k when PACE started blowing up...

April 22, 2022
10:44 am
Norman1
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COIN said
I just checked my March 2022 PACE statement and under Equity Shares I see $1,175.00. Thanks to Jen I now remember the $175.00. For the life of me, I don't remember the $1,000.00 that is part of the $1,175.00 total.

That $1,000 was probably extra PACE CU membership shares that you had decided to purchase.

I found a copy of the PACE CU 2018 dividend declaration. It includes this:

In addition, and for a fifth year in a row, a 3% Membership Share dividend will be paid to those who opened their account prior to December 31, 2017. A reminder that members are welcome to add to their $175 minimum in their Membership Share account to take advantage of strong historical dividends - to a maximum of $1,175.

April 22, 2022
10:49 am
savemoresaveoften
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Norman1 said

COIN said
I just checked my March 2022 PACE statement and under Equity Shares I see $1,175.00. Thanks to Jen I now remember the $175.00. For the life of me, I don't remember the $1,000.00 that is part of the $1,175.00 total.

That $1,000 was probably extra PACE CU membership shares that you had decided to purchase.

I found a copy of the PACE CU 2018 dividend declaration. It includes this:

In addition, and for a fifth year in a row, a 3% Membership Share dividend will be paid to those who opened their account prior to December 31, 2017. A reminder that members are welcome to add to their $175 minimum in their Membership Share account to take advantage of strong historical dividends - to a maximum of $1,175.

  

Thanks Norman for refreshing my memory. Thats exactly why my Equity share reads $1175.

And I also bot $1k class A....

Guess I am part of the 2% suckers...

April 22, 2022
10:52 am
Norman1
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There seems to be three classes of PACE CU shares:

  1. PACE Class A Investment Shares
  2. PACE Class B Investment Shares
  3. PACE Membership Shares

PACE CU is not insolvent. So, there's some value to the shares. Just not certain right now much.

April 22, 2022
10:56 am
savemoresaveoften
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Norman1 said
PACE CU is not insolvent. So, there's some value to the shares. Just not certain right now much.  

After paying all the fee to "wind down" the operation, the investment shares are most likely wipe out. May get 10-20cents on the dollar on the membership shares is my guess. I hope I guess wrong this time.

April 22, 2022
1:35 pm
COIN
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If memory serves me right, PACE was aggressively promoting their GIC's in 2018 (e.g. CP24 commercial). All my GIC's matured in 2021 and I was paid in full. My only connection to PACE now are those darn equity shares.

April 22, 2022
1:55 pm
savemoresaveoften
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COIN said
If memory serves me right, PACE was aggressively promoting their GIC's in 2018 (e.g. CP24 commercial). All my GIC's matured in 2021 and I was paid in full. My only connection to PACE now are those darn equity shares.  

same here, was their infamous 30mth GIC at 3.4%...
And I think for the investment shares and membership shares, I recd $200 and $100 as as bonus perk. So I basically had a 85% loss on those at the end....

April 22, 2022
2:14 pm
AltaRed
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COIN said
If memory serves me right, PACE was aggressively promoting their GIC's in 2018 (e.g. CP24 commercial). All my GIC's matured in 2021 and I was paid in full. My only connection to PACE now are those darn equity shares.  

There has never been a question about insured deposits being covered/repaid in full. That is what deposit insurance is about and why one would want to be sure to have insured deposits, especially in second tier companies.

April 22, 2022
5:44 pm
COIN
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From the FAQ:
"11. What happens to Investment, Profit and Membership Shares held by PACE Members?

It’s important to note that the Financial Services Regulatory Authority (FSRA) is keeping investment and profit shares held by 2% of PACE members, and membership shares held by all PACE members, with PACE’s legal entity. They are not part of this transaction."

April 22, 2022
6:56 pm
AltaRed
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Nor should they be part of this transaction. They are not insured deposits.

April 22, 2022
7:25 pm
COIN
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AltaRed said
Nor should they be part of this transaction. They are not insured deposits.  

But, doesn't Alterna want to grow their membership?

April 22, 2022
7:36 pm
AltaRed
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COIN said

But, doesn't Alterna want to grow their membership?  

Alterna will only be interested in PACE members now buying a $15 Alterna membership. Or perhaps FSRA will fund this $15 membership share for transferred deposits. PACE members should be doing handstands in glee about only having to put out $15 to be a full functioning member of a now viable CU.

Alterna has no interest in keeping PACE membership shares (equity) whole, nor does FSRA/insurer want to guarantee non-insured equity at risk. Anyone who buys an equity share in any organization has that cost at risk all the time. Think about the members only golf club, retail cooperative, etc.

April 22, 2022
11:26 pm
Norman1
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Alterna Savings CU will grow their membership. The PACE CU members don't really have a choice.

The PACE CU deposits will be assumed by Alterna. The deposits won't be accessible through PACE CU afterwards. PACE CU will have no branches and no staff. No option has been provided to redeem any of the PACE CU GIC's before maturity.

Alterna CU could require the PACE CU member to purchase the required $15 membership share to become a member in order to access the assumed deposits. Alterna CU could front the $15, like PACE CU fronted the $175 minimum, and claw it back when the PACE CU member leaves Alterna CU.

April 23, 2022
1:03 am
Loonie
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My guess is that Alterna CU will loan the money for the membership as they will not want to rub new members the wrong way who have already had so many problems.

The question in my mind is whether Alterna CU will be able to retain those new members when the GICs mature.
Alterna CU generally has crappy rates for savers. They have a branch very close to my house but I never go in there as they don't offer anything I would want. I do know people who drive miles to get there due to longstanding loyalty, but that loyalty won't exist with former PACE members.

Their GICs are currently 2.25 to 2.55%. I don't know if that will satisfy PACE members or not. Alterna has to get new business out of these folks if it is to be worth their while.

April 23, 2022
6:31 am
COIN
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"PACE CU will have no branches and no staff."

Does this mean a skeleton staff will be retained to wind-up PACE and it will then cease to exist as an entity?

April 23, 2022
7:20 am
savemoresaveoften
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COIN said
"PACE CU will have no branches and no staff."

Does this mean a skeleton staff will be retained to wind-up PACE and it will then cease to exist as an entity?  

yup. the skeleton staff gets paid quite well to wind it down, investors get scrap if anything...

April 23, 2022
9:29 am
Norman1
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PACE CU may be run by FSRA people and not any current PACE CU people.

FSRA said they intend to pursue some of the former PACE CU executives and directors to recover funds for PACE CU. It could be years before those legal actions are resolved and PACE CU is wound up.

April 23, 2022
10:20 am
Loonie
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I hope the board members had Directors liability insurance. A well run organization will offer this but some prospective board members are not wise enough to ask. And PACE was not a well-run organization.

April 24, 2022
10:41 am
Norman1
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PACE CU did have directors liability insurance. But, we don't know how much of it is still left after paying an undisclosed amount towards that $40 million settlement with the PFL and FHH preferred shareholders.

That was a concern of one of the liquidators of PACE Securities, PACE Financial, and First Hamilton Holdings. The liability insurance policies could be used up from defending the other legal actions by the time the preferred shareholders reached a settlement.

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