Canadian Credit Unions have been part of our financial landscape for more than 120 years, beginning with the founding of the first Caisse Populaire by Alphonse and Dormène Desjardins in Lévis, Quebec. Today, the Desjardins Group, which includes insurance companies, credit unions, and the Caisse Populaire in Quebec, has over 7.8 million members, 55,000 employees, and over $470 billion in assets. In Quebec, Credit Unions are woven into everyday life as strong competitors to the big five banks. Yet outside of Quebec, credit unions remain significantly underutilized, despite offering many meaningful advantages to Canadians.

Credit unions are structured as customer co-operatives. People who do their banking at a credit union first become members by buying a small membership share. In effect, every customer at a credit union is also a shareholder. This business model fundamentally shifts how decisions are made. Credit unions are, by design, structured to help their members. The focus is not on generating returns for external investors, but on serving members’ financial well-being.

Credit unions, as financial institutions, must generate sufficient profit to maintain capital, but excess profits are returned to members as patronage dividend payments or reinvested to improve products and services.

At a credit union, the first question is always “What is best for our members?” not “What will maximize shareholder returns?” While this may seem like a subtle distinction, it has real practical implications for how credit unions do business.

At YNCU, where I serve as Chair of the Board of Directors, we saw this distinction clearly. In March 2022, as interest rates appeared poised to rise rapidly, YNCU recognized that many members with variable-rate mortgages were at risk of experiencing sudden and steep payment increases.

In response, YNCU made the proactive decision to contact our members and advise them of the benefits of switching to a fixed-rate mortgage for the remainder of their terms. While it was not the most profitable path for the credit union, it was unquestionably the right one for our members.

Almost all our members took this advice and made the switch. They were undoubtedly happy they did. According to Ratehub.ca, in March of 2022, the posted five-year mortgage rate was 4.79%. By the end of the year, that rate jumped to 6.49%. Prime similarly increased from 2.45% in March to 5.95% by year-end, eventually reaching 7.2% in August 2023.

The board and I had no hesitation in supporting this decision. We praised management for prioritizing members’ long-term financial stability over short-term profitability. This is the cooperative difference in action.

Credit unions and small businesses are a natural fit. Credit unions pride themselves on understanding the local market and providing a high-touch, relationship-based approach to member service. By understanding small business members better, credit unions can offer greater flexibility in lending.

Small businesses value this approach, which helps explain why Canadian credit unions control 21% of the lending market for small and medium-sized businesses.

For Registered Financial Professionals, I encourage you to consider the credit union in your community—whether for your own business or for clients seeking local advice, strong service, and honest and transparent decision-making.

Once you see that difference, I suspect you will start recommending credit unions to your clients.