PACE CU to be folded into another CU | Page 2 | General financial discussion | Discussion forum

RWAbacus406 said
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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.

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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.

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.

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.

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.

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.

Nor should they be part of this transaction. They are not insured deposits.

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.

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.

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.