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Email this4:05 pm
September 15, 2017
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I have been communicating with East Coast Credit Union and the CEO of Nova Scotia Credit Union Deposit Insurance Corp.(NSCUDIC).
For their GICs purchased from a GIC broker/agent, it seems that Nova Scotia Credit Union has been only setting up a "member profile" without setting up a membership share. The credit union believed that was sufficient to enable these GICs to have insurance coverage with NSCUDIC. Apparently, the deposit insurance corp. was unsure or unaware of the requirement that a "member" must have a share in order to be in good standing and have insurance coverage.
Following my inquiries and after much research this week, NSCUDIC has concluded that their credit unions must ensure that each "member" has a membership share to be covered by deposit insurance, for GIC purchases through GIC brokers/agents.
Presumably, NSCUDIC intends to notify their credit unions of this requirement (hopefully) and we will see the outcome if they comply.
9:38 pm
October 21, 2013
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Thank you for sharing your research, GR.
I had the same questions a few weeks ago but didn't explore the answers beyond what was posted on the internet - which was insufficient. Nor did I buy.
It was my understanding that membership was only open to locals, but maybe I had that wrong? If true, that will be a conundrum to resolve for those who use a deposit broker.
1:58 am
April 14, 2021
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Thanks, GR. I have some purchases enroute and put the question directly to Kevin Rotenberg. I asked him to ensure that I had coverage for my purchases and attached a link to your message and concern.
5:41 am
March 30, 2017
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So this can potentially extend to Ontario, meaning even being an ON resident, one may not be covered under FRSA if GIC is done thru a GIC broker and a member profile set up is not qualified when the Ontario CU fails ?
If it is true it will completely change what we believed in ?!
7:21 am
April 6, 2013
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It is actually the same in Ontario. That was found in a previous discussion.
One needs to be a member of the Ontario CU, at least when the deposit is made, to qualify for provincial deposit insurance coverage.
In Nova Scotia, the province's Credit Union Act subsection 27(3) requires a credit union member to hold at least one share:
Common shares
27 (1) Common shares in a credit union shall have an issue price fixed by the articles, but the issue price shall not, in any event, be less than five dollars each.(2) A credit union is not limited as to the number of common shares it may issue.
(3) A member of a credit union shall purchase and hold only one fully-paid common share, unless the charter by-laws of the credit union permit or require members to purchase and hold more than one fully-paid common share.
1994, c. 4, s. 27.
7:57 am
March 30, 2017
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One needs to be a member of the Ontario CU, at least when the deposit is made, to qualify for provincial deposit insurance coverage.
Didnt the GIC broker thread mentioned the broker sets up a member profile and not necessarily an actual membership with the CU when they place a GIC for a client ?
8:51 am
September 15, 2017
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After I notified Nova Scotia Credit Union of the requirement that a member must have a membership share to have insurance coverage and after NSCUDIC presumably notified them, it seems that the issue is still "up in the air" for now.
See below response I just received from an Assistant Manger at Nova Scotia Credit Union, so buyer beware.
"We are currently working to address this issue and will hopefully come to a resolution soon as to whether or not we need to update our existing process."
8:57 am
September 15, 2017
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HermanH said
Thanks, GR. I have some purchases enroute and put the question directly to Kevin Rotenberg. I asked him to ensure that I had coverage for my purchases and attached a link to your message and concern.
A broker or credit union can tell you that you have insurance coverage but the criteria is that they must purchase/set up a share on your behalf, in order to be eligible as a bonafide member, if the GIC is purchased through a broker.
9:51 am
November 15, 2018
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I called Kevin at GIC Wealth with my concerns after reading this thread & he informed me that the CU buys a share/membership on the new members behalf & if/when the member closes the account the CU takes back the share/membership amount. I also logged into my Equity Credit Union account & it shows a $20 capital share line even though I went through Kevin to purchase the GIC & never gave anyone $20.
10:14 am
April 6, 2013
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It is good that the Ontario CU Equity Credit Union has done that for their deposit brokerage clients.
However, it looks like that CU in Nova Scotia has not been doing that and just opens some kind of profile in their records without any share purchased.
10:34 am
March 30, 2017
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dommm said
I called Kevin at GIC Wealth with my concerns after reading this thread & he informed me that the CU buys a share/membership on the new members behalf & if/when the member closes the account the CU takes back the share/membership amount. I also logged into my Equity Credit Union account & it shows a $20 capital share line even though I went through Kevin to purchase the GIC & never gave anyone $20.
Do you have an account with Equity Credit Union or only has GIC thru Kevin ? If thru the broker only how you get the login ID ? Curious cuz I have some GIC with Equities CU but thru broker only. Never knew I can still see the actual GIC online thru the CU myself.
10:36 am
September 15, 2017
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dommm said
I called Kevin at GIC Wealth with my concerns after reading this thread & he informed me that the CU buys a share/membership on the new members behalf & if/when the member closes the account the CU takes back the share/membership amount. I also logged into my Equity Credit Union account & it shows a $20 capital share line even though I went through Kevin to purchase the GIC & never gave anyone $20.
dommm:
Was your question to Kevin about Nova Scotia or a general question?
Emails received from Nova Scotia C.U. indicate that they have NOT been setting up a share (only a "member profile"), but the process is now under review after I brought this to their attention this week.
All credit unions SHOULD set up a share for GICs purchased through GIC brokers, but do all of them do it, in order to have deposit insurance coverage?
I have seen one of the specific credit union application forms for a GIC purchase with an Ontario broker. The terms state that the purchaser applies for membership and subscribes for 1 membership share and the credit union provides the funding to purchase the share and membership ends at the maturity of the GIC.
12:36 pm
November 15, 2018
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GR said
dommm:
Was your question to Kevin about Nova Scotia or a general question?
Emails received from Nova Scotia C.U. indicate that they have NOT been setting up a share (only a "member profile"), but the process is now under review after I brought this to their attention this week.
All credit unions SHOULD set up a share for GICs purchased through GIC brokers, but do all of them do it, in order to have deposit insurance coverage?I have seen one of the specific credit union application forms for a GIC purchase with an Ontario broker. The terms state that the purchaser applies for membership and subscribes for 1 membership share and the credit union provides the funding to purchase the share and membership ends at the maturity of the GIC.
I text Kevin & let him know I had read this thread & asked if it was correct that in order to be insured for GIC's at CU's you needed to be a member & he confirmed that that is correct. It was in general & I did not specify a CU.
12:43 pm
November 15, 2018
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savemoresaveoften said
Do you have an account with Equity Credit Union or only has GIC thru Kevin ? If thru the broker only how you get the login ID ? Curious cuz I have some GIC with Equities CU but thru broker only. Never knew I can still see the actual GIC online thru the CU myself.
After going through Kevin to buy a few GIC's from Equity CU I then called Equity CU & requested to be able to set up an online account & to my surprise they agreed. I have called other CU's after buying GIC's through Kevin & they have declined to let me set up an online account. Only after logging in to the Equity CU site did I see the $20 Capital Share listed.
12:55 pm
April 14, 2021
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I did purchase DUCA GICs from Kevin and then called DUCA. They confirmed that a 'courtesy' ownership share was created for me and would be withdrawn upon maturity/transfer of the GIC funds. I was very surprised to learn that East Coast might not do the same.
1:23 pm
March 30, 2017
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dommm said
After going through Kevin to buy a few GIC's from Equity CU I then called Equity CU & requested to be able to set up an online account & to my surprise they agreed. I have called other CU's after buying GIC's through Kevin & they have declined to let me set up an online account. Only after logging in to the Equity CU site did I see the $20 Capital Share listed.
Thanks for sharing the info.
I just called Equity CU and they wont do it... oh well..
1:35 pm
March 30, 2017
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HermanH said
I did purchase DUCA GICs from Kevin and then called DUCA. They confirmed that a 'courtesy' ownership share was created for me and would be withdrawn upon maturity/transfer of the GIC funds. I was very surprised to learn that East Coast might not do the same.
So it looks like if u already have a relationship with DUCA first, then they can add the broker GIC to ur profile and u can see it, but not the other way round.
2:06 pm
March 15, 2019
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savemoresaveoften said
So it looks like if u already have a relationship with DUCA first, then they can add the broker GIC to ur profile and u can see it, but not the other way round.
I spoke to DUCA a while back and was advised that GIC's purchased through a broker will not show up when you log into your DUCA account.
I cannot test the accuracy of this info as I do not have a DUCA GIC purchased through a broker.
3:45 pm
March 30, 2017
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COIN said
I spoke to DUCA a while back and was advised that GIC's purchased through a broker will not show up when you log into your DUCA account.
I cannot test the accuracy of this info as I do not have a DUCA GIC purchased through a broker.
It won’t show up automatically. But since it’s under your name, they can add it to your profile when u ask them to.
10:59 am
April 14, 2021
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Just spoke with Kevin Rotenberg about East Coast CU and their handling of shares. He assured me that EC issues a share and then redeems upon maturity and that he would never sell me anything that was not covered by insurance.
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