Log In
Register
Home
Topic RSS
Facebook
Twitter
Email this10:58 am
October 27, 2013
Offline
MDWWDM said
Does anyone know if this would be grounds to get out of GICs held with Motusbank? I have several GICs in both my TFSA and RRSP with them that are going to mature after the transition to Coast Capital. I have no desire to have anything to do with this banking institution.
Probably not but dig into the fine print. The T's and C's often include one that provides issuer flexibility to assign to another party for just this sort of reason. IF that is the case, it will be up to Motus what 'concessions' they may offer. Desjardins offered some concessions when they wound up Zag Bank in 2018, maturing GICs with relatively short remaining maturities, etc. It may be more complicated with registered accounts.
The learning here is not to do business with a 2nd or 3rd tier institution that has a higher probability of being sold or wound up. My last foray into this tier of FIs was actually Zag Bank. We are going to see more and more of this as consolidation to economies of scale continues.
11:34 am
April 6, 2013
Offline
If the bank deposit is assumable by another financial institution according to the fine print, then the bank won't offer any concessions at all!
Another financial institution will assume the deposit. Bank will receive approval, wind up, and evaporate.
6:36 pm
December 12, 2009
Offline
Loonie said
I have been under the impression that Meridian doesn't want to take membership outside of Ontario at this time, and that Coast Capital doesn't want to go outside of BC or maybe the West generally.. CC has been federally incorporated for a while now. We thought they would then expand nationally, but they show no interest.
Clients could be given a choice. Those who value the CDIC insurance and want a "bank" would likely choose CC, but there is no mention of having a choice in #1 above.
You'd think that, eh!? Most of us certainly did. Coast Capital Savings seems have wanted to incorporate federally as a means to expand into other provinces through acquisitions, but that hasn't happened. Innovation went national; First West is on the road to going national later this year or early next year. Servus and Connect First merged in Alberta to essentially create the first province with essentially one credit union only. Mergers are happening within each province.
6:39 pm
December 12, 2009
Offline
Norman1 said
Loonie said
…
Clients could be given a choice. Those who value the CDIC insurance and want a "bank" would likely choose CC, but there is no mention of having a choice in #1 above.CDIC will likely refuse to approve any transfer of the bank's loans (assets) to a financial institution outside its jurisdiction while CDIC is still on the hook for the bank's insured deposits (liabilities).
No financial institution, including Meridian CU, would assume any of the bank's deposit liabilities without receiving a like amount of assets in return.
Why would CDIC be "on the hook"? In such an asset purchase agreement, the assuming provincial credit union would be acquiring the assets and liabilities. There is no perpetual guarantee for CDIC insurance if the deposits move to another jurisdiction.
In any case, it's moot because it sounds like all deposits, all $80-100 million of them, are going to Coast Capital Savings, which is CDIC insured. All lending products are going to Meridian Credit Union, meaning Meridian essentially has opened up its bond of association to allow non-Ontario resident members.
6:42 pm
November 18, 2017
Offline
When BlueShore (formerly North Shore Credit Union) was merged into the recently merged Beem credit union at the end of 2024, we were offered the ability to withdraw our share deposits - which is really laborious normally. I took my shares into a GIC with a decent rate.
But I didn't have any GICs to try to cash in.
RetirEd
6:10 am
December 12, 2009
Offline
Norman1 said
If the bank deposit is assumable by another financial institution according to the fine print, then the bank won't offer any concessions at all!Another financial institution will assume the deposit. Bank will receive approval, wind up, and evaporate.
Agreed. 
6:13 am
December 12, 2009
Offline
RetirEd said
When BlueShore (formerly North Shore Credit Union) was merged into the recently merged Beem credit union at the end of 2024, we were offered the ability to withdraw our share deposits - which is really laborious normally. I took my shares into a GIC with a decent rate.But I didn't have any GICs to try to cash in.
Yeah, that's a little different. In this case, Coast Capital Savings is offering to assume the deposits. A better comparable example is RBC Royal Bank's acquisition of ResMor Trust Company's assets, specifically, the Ally deposits. On completion date, Ally HISA accounts closed and balances transferred to the first linked external account, mailed by cheque, or sent to the Bank of Canada's unclaimed deposits program early, as I recall. RBC then took over the lending products and assumed the GICs under the same terms as the Ally GICs to their maturity.
3:57 pm
October 21, 2013
Online
I'm not sure I follow you, Norman.
Are you saying that motus may not be able to fulfill its promise to transfer deposits to Meridian or CC, or that the deposits would lose insurance in doing so?
5:31 pm
December 12, 2009
Offline
Loonie said
I'm not sure I follow you, Norman.
Are you saying that motus may not be able to fulfill its promise to transfer deposits to Meridian or CC, or that the deposits would lose insurance in doing so?
I don't quite get part of what Norman is saying about CDIC not wanting to approve a transfer. From CDIC's perspective, the loans are shifting from federal regulation to provincial regulation, reducing the risk against Motus' liabilities (its deposits). Its deposits, hence, have only operational and cyber-security risk, not credit quality or liquidity risk. In short, it is a de-risking scenario (i.e., risk is being removed).
However, I don't believe Norman was saying that Meridian or Coast Capital Savings would not agree to assume the loans or deposits in certain circumstances, or that they would lose deposit insurance. I think he was just saying, later on in the thread, that Coast doesn't need to offer incentives in the form of 'bonus' rates or the ability to redeem GICs early (they could do that, but they don't have to and may not want to).
4:57 am
November 18, 2017
Offline
Doug: Yes, I remember that all Ally accounts I held were transferred to RBC with all terms and conditions intact. That is, they continued with monthly payout of interest from the four terms so I never exceeded the CDIC limits.
There was one hiccup, though. RBC kept trying to make me accept a method of payment for the final close-out that would cost me money. They claimed to not know what I meant by direct debit! I resorted to Alternate Banking Plan B in a local RBC branch and they handed me a cheque on the spot. No fee at all.
RetirEd
8:32 am
April 6, 2013
Offline
Loonie said
I'm not sure I follow you, Norman.
Are you saying that motus may not be able to fulfill its promise to transfer deposits to Meridian or CC, or that the deposits would lose insurance in doing so?
Motus Bank needs CDIC and OSFI approval for its plan to wind down. Yes, if CDIC and OSFI don't like the arrangement, they will not approve the transfer of Motus' loans (its assets) to Meridian CU and Coast Capital CU.
Coast Capital CU isn't going assume the liability for the Motus deposits without receiving assets to offset those deposit liabiities.
Money from the Motus deposits, except maybe from the savings and chequing account deposits, has been lent and is long gone.
3:22 pm
October 21, 2013
Online
OK, but I still don't understand the answer to my question.
Does motus have authority to say where the deposited money on the ledgers is to be found, i.e. BC or Meridian?
Also wondering what gives them the authority to move the money from a CDIC-insured FI to one that is not i.e. Meridian.
If they have effectively gone bust, wouldn't people be entitled to reimbursement from CDIC instead?
I don't have any money with motus; just want to understand.
4:41 pm
October 27, 2013
Offline
Motusbank is simply winding up its business. It is not insolvent so there is nothing for CDIC to pay out to depositors. However, the assets (loans) and deposits (liabilities) need to go somewhere and as Norman1 said, whoever takes on the deposits (liabilities) wants profitable assets in good standing in return to offset those liabilities.
5:45 pm
December 20, 2019
Offline
Fortunately for me all my locked in stuff expires mid April.
I have moved all my other deposits out so once the GIC's mature I am completely out.
So instead of letting motus decide where my money goes I decided to make the decision myself and I moved it to where I wanted instead.
I would not have minded Meridian because I deal with them already but I have never even heard of Coast Capital until the motus announcement came along.
6:29 pm
April 6, 2013
Offline
Loonie said
…
Does motus have authority to say where the deposited money on the ledgers is to be found, i.e. BC or Meridian?
They don't. One can't assign and shed liabilities like one can assign/shed an asset. As well, the deposited money is mostly lent out and no longer in Motus Bank's hands.
When one deposits funds in a three-year GIC, for example, the arrangement is not a safekeeping agreement where the money is kept in a vault somewhere for three years. Instead, the GIC money is lent out for about three years. So, Motus Bank can't really move all the deposited funds to Coast Capital, tell the depositors to pick up the funds later at maturity from Coast Capital instead, windup, and vanish.
Also wondering what gives them the authority to move the money from a CDIC-insured FI to one that is not i.e. Meridian.
Motus Bank doesn't have the authority to do that either. That's likely why the proposed wind down has all the deposit liabilities assumed by federally-regulated Coast Capital CU.
6:46 pm
October 21, 2013
Online
AltaRed said
Motusbank is simply winding up its business. It is not insolvent so there is nothing for CDIC to pay out to depositors. However, the assets (loans) and deposits (liabilities) need to go somewhere and as Norman1 said, whoever takes on the deposits (liabilities) wants profitable assets in good standing in return to offset those liabilities.
I'm still confused.
If, as Norman says, the deposits are "gone", i.e. loaned out, then what would CC and Mer be acquiring? The loan book? If so, these loans pay interest higher than what is owed to depositor. Is that not enough to satisfy CC and Mer?
Obviously this is not my area!
6:56 pm
April 6, 2013
Offline
Motus Bank is not insolvent. As one expects of a lender, most of the deposit money has been lent out. One can see it in their January 31, 2025 balance sheet filed with OSFI.
About $20.7 million in cash and cash equivalents on deposit with other financial institutions. About $47.8 million owed to demand and notice depositors. About another $60.9 million owed to term depositors.
7:03 pm
April 6, 2013
Offline
Loonie said
If, as Norman says, the deposits are "gone", i.e. loaned out, then what would CC and Mer be acquiring? The loan book? If so, these loans pay interest higher than what is owed to depositor. Is that not enough to satisfy CC and Mer?
That's correct: The loan book is what Coast Capital and Meridian are after. They are both happy with the proposed pieces of the Motus Bank loan book.
Now, Motus Bank has to convince its regulators CDIC and OSFI to approve the deal and allow Motus Bank to disappear immediately afterwards.
11:49 am
October 21, 2013
Online
I think I get it now. It's a two-step process.
The only thing that still confuses me is why CDIC would agree to deposits being moved from a CDIC-insured FI to one that is not, i.e. Meridian. Seems like they are breaking faith with the depositors who put their money in a bank. Some people do this because they believe CDIC insurance is more reliable.
5:49 pm
April 6, 2013
Offline
Meridian will not be assuming any of the deposit liabilities. The proposal is all the Motus Bank deposit liabilities are assumed by CDIC member Coast Capital Savings Federal CU in return for all the bank's non-Ontario loans and some of the bank's Ontario loans.
This is from their announcement Upcoming changes to …:
Transition of deposits and remainder of lending products to Coast Capital
We chose to partner with Coast Capital, a federal, member-owned credit union. to help support your financial needs. … All lending accounts held in provinces outside of Ontario, a small selection of lending accounts held in Ontario, and deposit accounts from all provinces will be transitioned to Coast Capital. Transition of these accounts is subject to regulatory approval. …
The deposits will continue to have CDIC coverage at Coast Capital.
Please write your comments in the forum.