Windsor Family Credit Union's Prime Rate Position

As has been well publicized, Canadian financial institutions have been significantly impacted by the recent turmoil in global financial markets. While WFCU prides itself in offering innovative and competitive products, we have not been immune to these developments.

While we remain a financially strong and competitive organization, these economic conditions have resulted in significant impacts to our financial margin - this is the difference between what we pay our depositors and what we charge our borrowers.

To assist in economic stimulation, the Bank of Canada has continued to lower the "over-night" lending rate (commonly referred to as the Bank Rate) to what are now record lows. Under normal circumstances, lenders mirror the change in the Bank Rate with a corresponding change to their own Prime Rate. WFCU has made a decision not to reduce its Prime Rate and has chosen to maintain our Prime Rate at 2.50%.

Unlike the major chartered banks, credit unions are unable to borrow from the Bank of Canada in order to fund loans to our members. We rely on member deposits to fund member loans. This has resulted in higher costs to us in attracting the deposits that allow us to lend to borrowing members.

Our promise is to act in the best interest of all of our members while balancing competitiveness with returns to our members. Despite the decision to hold Prime Rate at its current level, both loan and mortgage rates remain at historic lows and provide great opportunities to our borrowing members.

Our commitment to you is that we will continue to monitor market trends closely and adjust our rates to remain competitive in the market. We view this departure from our past practice of following the Bank of Canada as a temporary situation that has been brought on by unprecedented challenges for all financial institutions.

On behalf of the staff, management, and Board of Directors I would like to personally thank you for your understanding at this time.

Martin J. Komsa
President & Chief Executive Officer
May 2009