Credit Unions pursue merger

Access Credit Union

Share Adjust Comment Print

A proposed merger of Access Credit Union and Crosstown Civic Credit Union would create the second largest credit union in Manitoba, but Access CEO Larry Davey said the proposed changes aren’t all about size.

“It isn’t really about being big, it’s about being sustainable for the members long term,” he said. “That’s really what it’s about.”

The two credit unions announced Nov. 27 that they had entered merger discussions after completing initial reviews that show value in a partnership. Over the next couple of months they will develop a more detailed business case for each board to review and determine if they’ll bring it to their members for a vote.

Access Credit Union serves Southern Manitoba with 17 branches, 260 employees, over $3.1 billion in assets, more than 54,000 members and is the fourth largest credit union in Manitoba.

Crosstown Civic Credit Union serves Winnipeg with nine branches, 160 employees, over $2.6 billion in assets, more than 31,000 members and is the fifth largest credit union in Manitoba.

Combined they would be the second largest credit union, bigger than Assiniboine Credit Union but still smaller than Steinbach Credit Union.

Davey said at this point the merger appears to be a great fit.

“For long term sustainable growth it helps with our efficiency, but it helps with growing our membership and continuing to enhance what we can be involved with in our community sustainably,” he said. “It also helps us bring the products and services to our members along with the technology that our members are seeking.”

Davey said the financial world, and their competition continues to change, pointing out that Google is now getting involved in providing chequing accounts.

“We’re never going to be as big as Google obviously, but in order to facilitate that technology, scale is definitely required,” he said.

Davey said the two credit unions discuss issues such as the number of representatives on the board, who will lead the new credit union, what the name will be, where the corporate office will be and how staff will be impacted, if at all.

“We’re looking towards mid to late February as far as when we feel that business case will be completed,” he said. “It would then go to both boards. If both boards see it as a fit, they will agree to sign an amalgamation agreement and the amalgamation agreement gets taken to the membership to vote on.”

No matter the size, Davey said credit unions still remain different than banks.

“We’re still there for the member and I would say that differs from a company that has shares where the shareholders come first,” he said. “We’re there for the members.”

Davey said past mergers have produced a benefit.

“Ten years ago over a two year period, seven credit unions formed Access,” he said. “Would they have been able to do what Access does now? I would suggest no, most of them would not be able to.”

Davey said their size has helped them offer a wider range of products to members.

Other changes have also caused challenges for credit unions.

Ten years ago, Davey said he would have thought a credit union with assets of $1 billion would probably be big enough.

“That was before regulations started to change,” he said. “It started to change after the 2008 financial crisis and it has escalated a significant amount.”

In the last decade technology has allowed improvements such as e-transfers and deposit anywhere.  “We didn’t have things that everybody counts on now,” he said.

The provincial government also removed a tax credit that had long gone to credit unions.

“For a credit union of Access’ size, that’s about $15 million over five years that it impacts us,” he said.
“That now is money that’s not available for all of those things.”

Davey is excited about the proposed merger.

“The heritage is similar, the values are similar, we both have the same goal and it’s going to be a very, very good fit,” he said.

Access Credit Union Board of Directors Chair Curt Letkeman agreed.

“We know that mergers are happening at a rapid pace and that they are key to the long-term success of the Manitoba credit union system,” he said. “In Crosstown Civic, we have found a common heritage based on cooperative principles and we are similar-sized organizations that we believe will benefit our members.”

Crosstown Civic Credit Union Board chair Ingrid Loewen said they are excited about the potential of this partnership, while maintaining a members-first pledge.

“We are in the early stages of exploring a merger and look forward to the next step – confirming our positive assumption as we work to develop an in-depth business case,” she said. “We will continue to engage and inform our members as things progress and confirm our final recommendation to the members as soon as we are able to.”

If both boards recommend a merger, they will seek membership approval in Spring 2020.

Comments