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PART I: ABOUT BVCU & GOLD BACKED POSITION
BRITAIN: In 1696, Sir Isaac Newton took up the post of Warden of the Mint, and subsequently held the office of Master of the Royal Mint. In 1717, he implemented a “gold standard” whereby 40% of the British currency was backed by gold. It remained this way until the Great Depression in the 1930s.
Since most people in Alberta transact in Canadian dollars, so must their financial institutions. Therefore, we cannot fully “back” our deposits dollar for dollar, which would be the true definition of being “backed” by gold, nor could we even subscribe to the Sir Isaac Newton standard of 40%. It would not be profitable nor prudent, while we live in a world of fiat money, to do so. As an organization, we need the ability to transact, borrow, and lend with fiat currency to remain profitable.
At BVCU, we purchase precious metals with equity to act as a true reserve backing up your common shares with BVCU; we think of gold and other precious metals as insurance. We have a significant allocation to gold, treated like a currency, which we think is enough to protect your financial future, but not enough to be considered “fully backed” by gold.
Think of the BVCU “Gold Backed” statement as being a premium “value add” above the Bow Valley Credit Union 100% deposit insurance policy to protect YOUR equity position in BVCU from a sudden devaluation of fiat currency.
As far as we know, Bow Valley Credit Union is the only financial institution in Canada that is backing its financial strength with gold and/or other precious metals.
The US dollar was the last country to be backed by gold. From the 1970s to today, most countries have run on a system of fiat money, which is government-issued money that is not backed by a hard asset or commodity. The US dollar is now completely fiat money, which means it is backed by the government, but not by any physical asset.
On June 5, 1933, the United States started the process of uncoupling the US dollar from gold, whereby their currency became no longer interchangeable for gold, beginning when the US Congress enacted a joint resolution nullifying the right of creditors (paper money holders) to demand payment in gold prior to WWII. This was done because many countries attempted to repatriate their fiat currency US dollars for gold, which caused the US’s gold reserves to significantly decline.
In 1971, the connection between gold and the US dollar was completely severed when US President Nixon took the US dollar off the gold standard, therefore removing the “gold backing.” From this date, “money” has been mostly created by commercial banks when they make loans/leases and by the US Government when it issues cash and coins, in a form of “credit of US government.” The US dollar was no longer “backed” by anything, other than confidence in the US government.
We are not taking any chances when it comes to YOUR financial future. History has shown that gold and other precious metals act as an insurance policy against the devaluation of the US dollar, which is closely correlated to the Canadian dollar.
Price of gold in US dollars from April 1915 to January 2023:
The gold and other precious metals are safely and securely stored in an offsite vault. We have access to the vault on fairly short notice, but the intention is to hold the gold indefinitely.
From time to time, the gold and other precious metals will be audited by our external third-party auditors for our year-end financial statements.
BVCU continues to add to our physical precious metals position when opportunities arise, and liquidity/capital allow for it.
We are planning on having a third-party audit completed of our gold stores in the fall of 2023 for confirmation of our Balance Sheet. Until the time that we can give third party conformation of our gold in our position, we continue to add to our position through dollar cost averaging on a regular basis.
Although we are not fully positioned yet, we feel we have a large enough position currently to insure our members from a significant inflationary/deflationary event or “massive event”. The intention is to eventually hold an amount equal to our common shares in precious metals.
In the case of a worldwide or “massive event” BVCU’s Gold Reserves intention is to adequately protect ALL our members against a sudden hyperinflationary/deflationary event.
Members would need to decide (to be confirmed):
1. Keep on with business as usual; or
2. Sell the gold and be paid out with new hyperinflating/deflating dollars based on a percentage of common shares; or
3. Pay members out in gold/precious metals based on a % of their allocation of common shahres; or
4. Pay people out in a more relevant currency other than the Canadian dollar (Yuan, Yen, Euro, Ruble, U.S. Dollar, etc.) based on percentage of common shares before the massive event.
2. Sell the gold and be paid out with new hyperinflating/deflating dollars based on a percentage of common shares; or
3. Pay members out in gold/precious metals based on a % of their allocation of common shahres; or
4. Pay people out in a more relevant currency other than the Canadian dollar (Yuan, Yen, Euro, Ruble, U.S. Dollar, etc.) based on percentage of common shares before the massive event.
The choice of above would depend on the type of event, as well as member preference and financial position of BVCU and the member.
In the case of a slow devaluation of the Canadian dollar against BVCU’s gold reserves, the intention is to adequately protect our members from slow deterioration of the Canadian dollar though “marking the Gold Reserves to market”, which would be reflected through BVCU Income Statements, and a determination will need to be made whether to pay this income to members in the form of fiat currency dividends, via profit share.
CUDGC also fully guarantees deposits with BVCU so members can be assured their deposits are safe. BVCU is limited in the types of debt that we offer and are closely regulated. CUDGC (Credit Union Deposit Guarantee Corporation) would step in if there was a situation in which we could foreseeably require a bail-in or bail-out.
Our partner, Silver Gold Bull, an industry-leader can help you start investing in physical gold and silver.
Unfortunately, no. Organizationally, we are not set up to be able to provide this service; however, this service would likely go hand in hand with selling gold or silver to members, if pursued in the future.
The intention is for the gold to work just like an insurance policy and to only use it, when necessary, for example, in the unlikely situation of a liquidity or capital event.
PART II: BECOMING A MEMBER & ABOUT BVCU
We have 6 locations in Southern Alberta’s Bow Valley region:
- Banff
- Canmore
- Cochrane
- Airdrie (Cooper’s Town)
- Airdrie (Kingsview)
- Calgary (Sage Hill)
Our branches work together to ensure our members-first vision of banking.
Accounts or investments can be opened by all Alberta residents.
For businesses to open accounts with BVCU, they need to have their headquarters (place or building serving as the managerial and administrative center of an organization) or material business interests in Alberta.
If you are BVCU member, yet live out of province, you are still able to continue to invest with BVCU on a personal level!
Unfortunately, our regulations limit BVCU to members who reside in Alberta.
Need to see a change to sound money in your province or state? Become a local credit union member! Join your local credit union's Board of Director and demand change. Sound money is important to everyone, and fiat money printing negatively impacts us all, no matter what part of the world you live in.
If you’re a resident of Alberta and would like to open a personal account, you can join today through our online application process for personal members! To become a member, a $25 Common Share requirement is needed plus an additional deposit to open your account; you are now a member! A Member Card would be mailed directly to you, with a pin a few days later. You are now set up to use online banking and do day-to-day transactions; between online, mobile, and connecting directly with the branch, there's not much you can't do from anywhere at any time! Your Member Card can be used at any Canadian credit union ATM for free.
Unfortunately, we aren't currently capable of opening business accounts online (coming soon!); however, we can assist you remotely.
This process can be started by gathering information through email directly with a branch. There may be a requirement for you to attend the branch.
You can join BVCU through our online application process for personal members!
If you would prefer to open your account in branch and for Business members, you will need to select a branch to assist you (Banff, Canmore, Cochrane, Airdrie Cooper’s Town, Airdrie Kingsview, or Calgary Sage Hill).
We are currently experiencing higher than normal volumes but are looking forward to meeting and assisting you as soon as we can! Book a time for us to connect directly with your preferred branch.
We are regulated provincially by CUDGC (the Credit Union Deposit Guarantee Corporation), rather than federally by OSFI like other FI’s.
Our privacy policies are internal and are fully intended to protect our members and guard against their personal information being shared.
PART III: BVCU'S DIRECTION
We are excited to continue growing and are looking forward to what the future holds for BVCU and our members. That said, all expansion plans will be announced on our website when we have news to share.
BVCU does not plan on moving toward Digital IDs.
BVCU does not believe in this approach and won’t willingly subscribe to any elements of banking that would make this possible, including Open Banking, Digital IDs, or CBDCs (Central Bank Digital Currencies).
As a credit union we are focused on Data Privacy, Board Diversity, and Employee Engagement, which are elements of ESG. Beyond this, we have no plans to further integrate ESG into our organization.
Our current investments can be found as a part of our financial statements.
To summarize, our main investment is loans to members, including residential mortgages, consumer loans, and commercial loans.
BVCU does a significant amount of real estate lending, through both residential mortgage lending and commercial lending around real estate development and construction. Additionally, we invest funds into term deposits with Credit Union Central of Alberta. With respect to Physical precious metals, their value is held off-balance sheet because we are only able to recognize the "face value" of our precious metals.
BVCU is supportive of the O&G industry, as that industry is at the heart of the Alberta economy. Currently, we aren’t in the oil and gas industry space.
No, we haven't ever frozen any of our member accounts, and ideally, we never would.
BVCU is obligated to follow the law, but we will take every member’s account into consideration individually and carefully. We will be transparent and give members a lot of awareness surrounding any potential issues prior to taking any steps.