2023-09-09 05:38:26
Published at 1:38 a.m. Updated at 6:00 a.m.
My husband and I have had accounts with Desjardins for many years. At the time, to open an account in a credit union, we were asked five dollars to purchase a “share” in order to be members of this financial services cooperative. So our five dollars like those of millions of credit union members are there for a long time, and until we can get them back when we close our accounts at the credit union. But in the meantime, what is the use of this capital in “social shares” of the credit unions on which Desjardins pays nothing and who benefits from it? – Francine C., Saint-Bruno
To answer this question which might concern the approximately 5 million members of Desjardins credit unions, The Press consulted the most recent management documents of the cooperative financial services giant.
We also called on the Desjardins communications department to clarify the operation of these “shares” in the network of 112 credit unions in Quebec.
First, it must be remembered that each of these credit unions is in fact a financial services cooperative with its own board of directors which is elected by its members in good standing who hold a “$5 share” and the right to single vote linked to it.
Also, even today, obtaining member status of a credit union through the acquisition of a $5 share is required to have access to basic financial services managed by this credit union.
This is not the case for direct clients of other companies or business components of Desjardins Group, such as insurance products or investment services in financial markets.
You must also be a member in good standing of a credit union in order to participate and exercise your unique voting right during the credit union’s senior management activities, such as the annual meeting of members and the selection of board members. of administration.
Moreover, in the Desjardins Group annual report, we use the regulatory term “qualifying shares” to designate these “$5 shares” held by members of the credit unions.
Also, in the most recent annual financial statements of Desjardins, dated December 31, 2022, the total value of these “qualifying shares” issued by the credit unions was recorded at $26 million, or $1 million more than the end of the previous financial year, in 2021.
At $5 per share, this amount of 26 million corresponds to 5.2 million “qualifying shares” issued by credit unions among their members.
Furthermore, this amount of 26 million constitutes only a tiny part of the total sum of 4.78 billion in “share capital” which was recorded at Desjardins at the end of the 2022 financial year.
In fact, it is the “capital shares” issued by the Fédération des caisses Desjardins for the exclusive benefit of members of the credit unions which account for 4.76 billion in the share capital of the Movement.
The Fédération des caisses, it should be remembered, is the highest administrative and financial management body which oversees all of the many components of the Desjardins Group.
These “capital shares” of $10 each, but without voting rights, are offered as a savings product because they provide an interest return whose rate is determined annually by the board of directors of the Fédération des caisses. .
In comparison, “qualifying shares” issued by credit unions earn nothing in the way of interest or “dividend” income, as with bank shares, for example.
However, you must be a member in good standing of a credit union to be eligible for the distribution of all “rebates” from operating surpluses recorded by the Fédération des caisses Desjardins.
These rebates amounted to $403 million at the end of the 2022 financial year, compared to $387 million in 2021 and $330 million in 2020.
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