​Capital Patronage Shares

A capital patronage share account (Class B) is an account the credit union opens on behalf of the members. It accumulates through

• Patronage distributions (rebates)
  
• Share dividends paid on the capital patronage share account (Class B)
  
• Share dividends paid on the membership share account
  

Your capital patronage shares (Class B) remain in your account for a minimum of five years and are partially redeemable at 10% per year. They are fully redeemable if you decide to leave Moya Financial. The share dividend payment is one component of Moya’s planned strategy to build our regulatory capital and to strengthen our financial position. This share dividend payment is counted as part of our regulatory capital.

No, you cannot. Capital patronage shares (Class B) cannot be purchased – they can accumulate only with share dividend distributions on membership shares, capital patronage shares (Class B), and patronage distributions.

A patronage distribution is a way of sharing the credit union’s profits with its members. As an owner of the credit union, you may receive a patronage distribution from time to time at the discretion of the Board of Directors.

Each member’s share of the distribution is based on the interest the credit union earned on deposits (including registered plans) and the interest it paid on loans or mortgages.

The distribution is shared equally among the credit union’s savers and borrowers. It is calculated by applying the member’s proportion of total interest earned and/or paid by the credit union during the fiscal year to the total distribution declared. The minimum distribution is $1.

Half of the patronage distribution is allocated to members who received interest on their savings and term deposits, and the other half is allocated to members who paid interest on their loans and mortgages.

A simplified example for a patronage distribution of $250,000 is illustrated below ($125,000 goes to savers and $125,000 to borrowers):

1. In a given fiscal year, if a member had invested $100,000 in a five-year term deposit at 2.75%, that member would have earned $2,750 in interest that year. Say Moya Financial paid $2.5 million in interest on savings and term deposits that year. That member would receive a patronage distribution of $137.50: 

$2,750 interest earned ÷ by $2.5 million interest paid × $125,000 paid to savers = $137.50 

2. Similarly, if a member had borrowed $100,000 in a five-year mortgage at 3.25%, that member would have paid $3,250 in interest that year. If Moya Financial earned $6.0 million in interest on loans and mortgages that year, that member would receive a patronage distribution of $67.71:

$3,250 interest paid ÷ by $6.0 million interest earned × $125,000 paid to borrowers = $67.71

Patronage distributions benefit borrowers by effectively reducing their cost of borrowing. They benefit depositors by paying a bonus on their deposits.

If the Board of Directors declares a patronage distribution, it is usually paid out the following year into a capital patronage share (Class B) account. Members will see “capital patronage share account” on their online banking page. The amount paid to each eligible member is based on that member’s business with the credit union, with a minimum benefit of $1.

No, capital patronage share (Class B) accounts are unlimited.

No, capital patronage shares (Class B) issued by the credit union are NOT covered by the FSRA. For more information, visit FSRA's website.

You must have membership shares to be a member of Moya Financial Credit Union. Members can increase their membership shares, if they wish, up to $1,000 to take advantage of possible future dividend distributions (rebates) by the credit union.

Credit unions open capital patronage share (Class B) accounts on behalf of members. The capital patronage share (Class B) account accumulates through share dividends declared on membership shares, share dividends declared on the capital patronage share (Class B) account, and patronage distributions based on interest paid or earned by the credit union.

You may have money in a chequing account, without any other deposit or loan products. Since we don’t pay interest on our no-fee chequing accounts, they do not qualify for the distribution.

Any cash or share dividends paid out on membership shares, Class A investment shares, and capital patronage shares (Class B), as well as any patronage distributions (rebates), are taxable in the year received and will be included on your T5 statement.

Not necessarily. But we hope to declare patronage distributions more often. The Board of Directors is authorized to make that decision based on yearly financial profits, while ensuring the long-term financial success of Moya Financial.

Yes. The dividend is determined by the Board of Directors and depends on the credit union’s financial performance.

For example (if a 4% dividend is paid that year):

1. A $50 capital patronage share (Class B) receives a $2 dividend.
   
2. A $60 capital patronage share (Class B) receives a $2 dividend (rounded down).
   
3. A $70 capital patronage share (Class B) receives a $3 dividend (rounded up).