From better mortgage prospects and more financial inclusion and sustainability, Canada’s co–operative movement sets a global standard
With credit unions from across the globe set to converge in Toronto for the World Credit Union Conference this month, Canada’s co-operative financial sector continues its rising momentum, expanding ESG and CSR efforts and taking on more of the country’s mortgage market. Even with the Bank of Canada’s latest rate hike bringing the interest rate up to 5%, the country’s credit unions remain a refuge for price sensitive consumers, especially those with variable mortgage rates who will be hit the hardest by this latest increase.
Since last year, Canada’s credit unions have made sure and steady incursions into big bank dominance on mortgages “We’re seeing a lot more rate shoppers, so we’re seeing a lot more inquiries,” says Pippa Nutt, chief marketing and member solutions officer at DUCA Financial in a Reuters article on Canada’s mortgage market. As banks tighten lending requirements and stress testing, the credit union sector expects even more growth in mortgages than the 4.1% it realized in 2022. “The big banks’ dominance means borrowers typically gravitate to them for mortgages when rates are low,” finds Reuters. “The rapid increase in rates has changed that.”
An area where Canadian financial institutions continue to lead globally is in corporate social responsibility. Ahead of the World Credit Union Conference, global credit union leaders from Australia, Canada, Poland, and the United States toured three countries to visit with key International Standard Setting Bodies, especially those focused on diversity, according to CUNA News. “The group also visited key influential European regulatory bodies to urge support for the credit union co-operative model, noting the important role that it plays in accomplishing financial inclusion around the world.”
Noting the rising role of CSR along with Canada’s renowned environmental efforts, Jay-Ann Gilfoy, president and CEO of Meridian Credit Union, outlines how social issues are aligned with the credit union approach, in her recent Globe & Mail op-ed. “ESG and CSR may be relatively new concepts in the corporate sphere, but they’ve been bedrock values of co-operatives since they were founded,” she says. Even more, people are drawn to organizations like co-operatives because of their purpose-driven model. “As an alternative to publicly traded companies, co-operatives harness the power of the collective to create more open, inclusive communities, cultures and economies.”
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