MANITOULIN – The long and storied history of the credit union movement on Manitoulin Island will soon come to a close with Northern Credit Union (NCU)’s February 18 announcement that effective June 1, the Little Current branch (its only remaining Manitoulin Island location) would close its doors, as well as five other NCU branches across Northern Ontario and one branch in southern Ontario.
For the second time in its brief Island tenure, the credit union announced the closure without any warning to its members nor its ‘ambassador’ group—a group of individuals from the Manitoulin and Espanola area who helped as brand ambassadors while doling out small amounts of money from the credit union to community groups in the area—who admit that they have not heard much from NCU in the last almost two years.
In August 2018, The Expositor wrote a similar story with interviews from ambassadors who were “shocked” at the news that the Mindemoya branch would be closing its doors and were disheartened that no one had been given a heads up in the thought process of the branch closure.
History of Island credit unions
In January 1952, Manitoulin Credit Union Limited opened for business, operating between 2 and 5 pm on Fridays at the Department of Agriculture building in Gore Bay. Later that decade, a credit union also opened its doors in Little Current, the Little Current Community Credit Union.
Nearly 40 years ago, Espanola and District Credit Union (EDCU) began its expansion plans and merged with the Little Current Community Credit Union. About a year later EDCU merged with Gore Bay’s Manitoulin Credit Union. Each of these volunteer-operated local credit unions had been serving the public for several decades at the time of amalgamation.
At the time of these amalgamations, the EDCU committed to eventually providing full-service banking to the communities whose small local credit unions had been absorbed in the amalgamation process. This was accomplished, with full-time branches in Little Current and Gore Bay, by the mid-1980s.
Coverage of the 2009 EDCU AGM—the same year EDCU celebrated its 50th anniversary—showed that the credit union had taken a huge hit the year before with a massive drop in revenues. Despite the hit to the bottom line, the branches all received their first ATMs.
In 2013, EDCU announced the closure of the Gore Bay branch and a new one would be opened in Mindemoya. A petition ensued to see the board of directors reverse its decision about the Gore Bay branch, but to no avail. The Mindemoya branch opened its doors in the ‘Bondi block’ in late 2013.
Before NCU, an attempt to merge EDCU with Sudbury’s Northridge Credit Union failed in the face of stiff opposition, largely employee-led due to the non-unionized nature of the proposed merger partner. When EDCU began talks with NCU in 2015, that issue was not in play this time around as Northern Credit Union is also a unionized workplace.
The merger with NCU was consummated in 2015, with EDCU’s then-manager Lindsay Liske quoted as saying the credit union could “survive for a few more years (as EDCU), but not after that.”
At a public meeting with NCU’s then-CEO Al Suraci prior to the merger, he boasted that in 21 years, NCU had never closed a branch, but rather had continued to open them.
Three years later, in November of 2018, the Mindemoya branch was closed. Four years after that announcement, the Little Current branch (and others) are slated for closure.
Lack of foot traffic cited
A form letter sent to the ambassador group last Thursday from NCU president Richard Adam states:
“Over the past decade, credit unions and other financial institutions have focused on opening more branches. Today, most are decreasing their physical footprints because of the emergence of additional banking options, most notably online and digital tools.
“NCU has developed some of the best digital and remote banking services available and members have responded by using these tools, two to three times more often than they use in-branch services. Other than cash transactions, all banking, including account set up and inquiries, bank transfers, investments, loans, lines of credits, and mortgages at NCU can all be done using our online and telephone services.
“The ease and convenience of transacting business without the need to come into a branch have become so popular that traffic to some branch locations has decreased significantly, providing a strong business case for consolidating some of our smaller branches.”
Many are questioning the NCU’s excuse of a decrease in foot traffic during a global pandemic with enforced lockdowns, like ambassador Steve Shaffer of Mindemoya who called that notion “ridiculous.”
“And then, to add insult to injury, they tell you to just drive to Espanola,” an incensed Mr. Shaffer added. “First it was from Gore Bay just go to Mindemoya, then it was from Mindemoya just go to Little Current, now Little Current just go to Espanola?”
Mr. Shaffer said he had serious issues with NCU’s decision to close the Mindemoya branch in 2018. NCU worked out a deal with the BMO branch there to cover the cost of ATM fees incurred by customers left out in the cold, but when he asked what the credit union plans to do now, he said he received a form letter which stated that “there are over 40,000 surcharge-free ATMS available for members.” When he looked to see where the closest one would be, the answer was “Espanola.”
“It really bothers me, especially as someone who did a lot of volunteering and fundraising for them (NCU),” Mr. Shaffer continued, knowing the hours he and the late Ron Kenney spent running barbecues and other endeavours under the ‘True North Strong’ flag.
“I find it annoying, disheartening and certainly not within the credit union philosophy,” he added. “They’re acting more like a big bank.”
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Central Manitoulin mayor and businessman Richard Stephens also believes in the philosophy of credit unions and has been actively involved over the years since the days of EDCU where he served many years as chair of its board of directors. He said the Thursday announcement was not good news for Manitoulin.
Mr. Stephens said NCU has been a disappointment from the start. “It’s been quite disappointing in the way the Island was looked at, as a liability rather than an asset.”
This move may be “fine and dandy” for those who want to do online and telephone banking, Mr. Stephens added, but there are a good number who don’t, especially considering the Island’s aging population and poor broadband service in rural areas.
Jim Gilpin, also a long-standing board member of the EDCU and then an NCU ambassador, said he was “completely blindsided” by the announcement. He said that in the beginning, NCU catered to the agriculture community, but that appeared to have fallen by the wayside, which he thinks contributed to a huge loss to the credit union’s bottom line.
Jim Brandow of Espanola, who was born and raised on Manitoulin, was saddened by the news. Mr. Brandow was also an NCU ambassador, but the entire Espanola ambassador group disbanded 14 months ago, he explained, when they saw “the writing on the wall.” When the Espanola branch manager abruptly quit once NCU took the helm, alarm bells rang, he said.
“There’s no thought process to this (closure) at all,” he said, adding his voice to the skeptics who point to online banking as the be all and end all of banking in the region.
Businesspeople Dave and Cheryl Harper of Green Bay moved all their banking, both business and personal accounts, to NCU three years ago because they were sick of being treated “like a number” by the big banks. “Now this credit union is just treating us like a number again,” said an obviously annoyed Mr. Harper.
“I sure don’t want to go back to big banks, but I sure don’t want to have to travel to Espanola,” he added.
Ms. Harper echoed her husband’s concerns and spoke to the credit union’s largely agricultural clientele who still, for the most part, appreciate face-to-face banking. “And goodness gracious, the clients on the West End are looking at an over two-hour drive,” she added.
Everyone this newspaper spoke with said they would think long and hard before deciding to follow the branch to Espanola, with the question in the back of everyone’s mind: ‘how long does the branch in Espanola have?’
Liisa Woolley, senior vice president of member experience at NCU, told The Expositor that the Espanola branch is currently “self-sustaining.” The Little Current branch currently caters to 1,000 members, while Espanola looks after 1,500.
Ms. Woolley also said the credit union is currently “exploring solutions” for its Manitoulin members, such as fees on ‘foreign’ ATMs and a seniors’ chatline and training sessions for online banking.
“Our members’ behaviour has really grown online,” she said. “Even in smaller communities like Little Current, we have also seen that trend,” noting that NCU has done “all of the research required in the lead-up to this decision.”
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Staff of the Little Current branch, which numbers four, will be calling all their members in the coming days to inform them of the closure. Ms. Woolley said some positions will be made available at the Espanola branch for Little Current staff, but did not say how many.
On top of Little Current, NCU branches in Coniston, Iron Bridge, Petawawa, Sault Ste. Marie and Richard’s Landing are also closing, as well as a southwestern Ontario branch in Elmwood.
Brian Cairns, a member of the NCU board of directors who represents Manitoulin and Sudbury, could not be reached by press time Monday.