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The Credit Union Deposit Insurance Corporation of British Columbia (“CUDIC”), a statutory corporation, guarantees all deposits and non-equity shares (issued before January 1, 2020) of BCFSA authorized credit unions as set out in the Financial Institutions Act.
The list of current CUDIC insured credit unions
CUDIC’s responsibility is to administer and operate a deposit insurance fund. The BC Financial Services Authority, a crown agency of the Government of British Columbia, is responsible for administering CUDIC and for administering the regulation of financial institutions operating in the province.
On November 27, 2008, the Provincial legislature passed amendments to the Financial Institutions Act to provide unlimited deposit insurance protection on all deposits in British Columbia’s credit unions.
CUDIC is a statutory corporation that guarantees 100 per cent of deposits and non-equity shares (issued before January 1, 2020) of British Columbia-authorized credit unions in accordance with the Financial Institutions Act (“FIA”). This deposit insurance guarantee protects credit union depositors and ensures their money is safe within the credit union and the credit union system. The deposit guarantee is backed by the deposit insurance protection fund (“CUDIC Fund”), which is administered and operated by CUDIC, and BC Financial Services Authority (“BCFSA”) is responsible for administering CUDIC.
The deposit insurance guarantee applies to all British Columbia-authorized credit unions except Stabilization Central Credit Union, Central 1 Credit Union, and federal credit unions operating in B.C. Federal credit unions are covered by the Canadian Deposit Insurance Corporation (“CDIC”).
BC Credit Union deposits are guaranteed by the Credit Union Deposit Insurance Corporation of British Columbia.
All money on deposit and money invested in non-equity shares with a B.C. credit union is 100 per cent guaranteed. Personal and business accounts that are guaranteed include:
• Savings accounts;
• Chequing accounts;
• Joint accounts;
• Trust accounts;
• Term deposits (with no limit on the length of the term to maturity);
• GICs (that are in the form of money on deposit with a B.C. credit union);
• Foreign currency deposits;
• Registered (for example, RRSP and RRIF) and tax-free savings accounts that are in the form of money on deposit (such as money invested in term deposits or GICs) with a B.C. credit union; and
• Accrued interest on deposits.
Products that are not covered by the deposit insurance guarantee are credit union equity shares, debt instruments and investments such as mutual funds or RRSP equity plans (RRSPs not in the form of money on deposit with a B.C. provincially regulated credit union).
Only money invested in non-equity shares issued by the credit union before January 1, 2020, including declared but unpaid dividends on the non-equity shares, is guaranteed. Any money invested in non-equity shares on or after January 1, 2020 will no longer be guaranteed.
The deposit insurance guarantee covers the full value of money on deposit with a B.C. provincially regulated credit union. There is currently no limit on the deposit amount guaranteed. This 100 per cent guarantee has been effective since 2008.
In the unlikely event of a credit union failure, CUDIC holds sufficient resources to cover immediate payout requirements. However, should CUDIC funds be insufficient, CUDIC can require payment from credit unions either through special assessments or debentures. Additionally, CUDIC can arrange for alternative standby funding from other sources, using the assets of a credit union as security. It is important to note that no depositor in B.C. has ever lost money from a B.C. credit union failure.
The Provincial Government does not provide or back the deposit insurance guarantee. CUDIC provides the deposit insurance guarantee and may seek Provincial Government support if required. The Provincial Government may provide financial support to the CUDIC Fund in accordance with Section 271 of the FIA if the Fund is impaired (see the CUDIC Fund Target Policy for further details about the CUDIC Fund).
No. You will automatically qualify once a B.C. provincially regulated credit union accepts your deposits.
BCFSA proactively intervenes if a credit union experiences any financial distress. This early intervention involves remedial actions (as permitted under Section 275 of the FIA) in order to resolve a troubled credit union. Remedial actions to address a credit union in financial distress could include:
• Performing more frequent and/or more targeted supervisory reviews;
• Requesting stress testing, revised business plans and risk appetite assessment;
• Requiring recovery or restructuring plans;
• Considering potential merger opportunities;
• Placing the credit union under administration; and/or
• Preparing contingency plans.
The Guide to Intervention provides more information on the Supervisory Intervention Stages.
If remediation efforts are insufficient, CUDIC may initiate payment to depositors in accordance with Section 266 of the FIA. The deposit insurance guarantee ensures depositors’ protection by providing payment of the full value of funds held on deposit.
All deposits held at B.C. provincially regulated credit unions are insured whether the depositor resides in BC or not.
Deposit insurance claims are paid promptly. Payments will be made by cheque, however, other online/electronic options may be available at the time of a failure. The duration it takes to receive payment of an insured deposit depends on the time required for BCFSA and CUDIC to meet their statutory obligations and verify the accuracy of deposit insurance claims.
CUDIC will contact all depositors based on information maintained at the failed credit union. Therefore, depositors should ensure that their contact information, such as mailing addresses, email addresses, and telephone numbers at their credit union are accurate and current.
B.C. credit unions transfer their unclaimed deposits to a non-profit group known as the B.C. Unclaimed Property Society.
The CUDIC Fund is wholly funded by premiums collected from CUDIC-insured credit unions. CUDIC maintains a fund in accordance with Section 267 of the FIA. CUDIC funds are further augmented by supplementary agreement with Stabilization Central Credit Union that provides assistance to B.C. credit unions.
A comprehensive review is conducted every four years to determine a target fund size. This review is based on an analysis of the potential costs in the event of a failure. See the CUDIC Fund Target Policy for further details.
You can find more information about the current CUDIC Fund size, Target Fund Range and the Stabilization Central Credit Union Financial Assistance Agreement in CUDIC’s annual audited financial statements.
CUDIC invests in safe and high-quality Canadian assets in accordance with Section 272 of the FIA and the Prescribed Investments Regulation. CUDIC can make any investment similar to that of a pension plan under the Pension Benefits Standards Act. CUDIC’s investment policy permits investment in debt securities issued or insured by a federal, provincial, or municipal government of Canada. A summary of the CUDIC investment portfolio can be found within the audited financial statements uploaded on to the CUDIC Corporate Publications webpage.
The total amount of mortgages, loans, and lines of credit owing to the credit union may be deducted from the amount to which a depositor is entitled under the deposit insurance guarantee.
Any change to the limit is made through an amendment of the FIA and is within the purview of the Provincial Government.
The amount and type of deposit protection varies from each jurisdiction in Canada. Each jurisdiction (provincial or federal) has its own deposit insurance limit and coverage.
No. The deposit insurance guarantee only applies in the event of a credit union failure. Please discuss options for recovery in those cases with your credit union representatives.
No. The 100 per cent CUDIC deposit insurance guarantee ends on the date the B.C. credit union operates as a federally regulated and becomes a member of CDIC. Coverage of pre-existing deposits will transition from CUDIC to CDIC starting the date the credit union operates under the federal government. For more information on the transitional coverage, please visit CDIC’s website.
Note: The information contained on this website is presented in summary form for your convenience and should not be relied upon as a complete explanation of deposit insurance coverage. Reference should be made to the Financial Institutions Act and Regulations.