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Credit Union closures move away from movement’s founding fabric

Ron Walter writes about the closure of nine credit union branches
MJT_RonWalter_TradingThoughts
Trading Thoughts by Ron Walter

When the first credit unions began in Saskatchewan they adopted the principle of neighbours helping neighbours.

Namely, the pooled money and savings in that community were mobilized by the local member-owned credit union to help sustain and build the community through loans and better returns on savings.

As the decades passed, credit unions became larger, covering greater geographical regions. Professional managers took over much control of policy-making in the growing movement.

When Moose Jaw Credit Union merged with Sherwood in Regina and Assiniboia, the foundation was laid for a much larger operation.

Indeed, Conexus and Innovation Credit Unions control most of the province’s credit union assets.

The announcement in early June by Conexus to close nine credit union branches came as a surprise to the public, and particularly to members in the communities affected.

The reason for closures: 95 per cent of transactions in Conexus branches aren’t done in branches, leaving the expense of bricks and mortar to the credit union.

Obviously this was a cost cutting measure based strictly on building profits.

A television poll after the announcement indicated 44 per cent of respondents still use bricks and mortar banks. A poll on MooseJawToday.com resulted in a similar number (46 per cent).

Another reason offered for the closures was that 20,000 Conexus members live in communities without branches.

The closures will make life more complicated for residents in these communities. An automated teller can’t totally replace the need for humans serving older residents who are not computer-friendly.

The closures will erase human contact with these members and eliminate some of the few jobs available in small communities.

Two of those closures are in the Moose Jaw region: Mossbank, population 360; and Chamberlain, population, 90.

Mossbank Mayor Greg Nagel was quoted in media as shocked by the announcement. He and his community will fight the closure.

Local businesses in all of these communities have relied on the credit union for walk-in deposits. Other financial institutions have long since deserted these towns.

These closures, apparently taken by the numbers crunchers in the credit union headquarters and approved by the member-elected board, do not reflect the principle of neighbours helping neighbours – a principle that laid the foundation of the credit union movement.

Sadly, these kinds of announcements will become more frequent as the spectre of digital automation looms, killing job opportunities and service.

Small rural communities won’t be the only ones affected. Changes enabled by the digital age and new technology will sweep the globe.

Ron Walter can be reached at ronjoy@sasktel.net