LITTLE CURRENT—There were plenty of questions, but very few answers, during the August 14 evening meeting of the Northern Credit Union delegates group  that closed with a discussion of the pending closure of the credit union’s Mindemoya branch. The meeting of delegates associated with the region’s three branches of Northern Credit Union (Espanola, Mindemoya and Little Current) met in the Little Current Valu-Mart upstairs meeting room.

A number of delegates expressed dismay over the way the closures were announced and the fact that most of the members of the group had no advance warning of the closure. Most of the delegates that spoke at the meeting noted that they had only discovered the news of the closure when contacted about the matter by local politicians seeking more information.

Delegate group deputy chair Jim Brandow of Espanola oversaw the Tuesday evening meeting. “It was unfortunate that I was not privy to it (the closure announcement) as a delegate,” he said. “There was a letter sent to the politicians in the area.”

“I think you hit it on the head,” said delegate Steve Shaffer of Mindemoya who first learned of the closure when a member of the community contacted him about it. He first believed it was an unfounded rumour. “I sent a couple of messages seeking answers, nobody responded. I thought ‘maybe Jim (chair Jim Gilpin) knows something’.” But Mr. Gilpin was also in the dark.

Mr. Brandow noted that, as delegates, “we still have not received anything.” In answer to queries the delegates were sent the same letter that had been sent to local politicians.

It was noted that the earlier closure of the Gore Bay branch of the credit union took place when it was being operated by the Espanola and District Credit Union, before that organization was amalgamated with Northern Credit Union.

The Expositor reached out to Northern Credit Union president and CEO Al Suraci to seek clarification on some of the issues brought up by the delegate group and Mr. Suraci did connect with the paper for a relatively candid conversation.

“Someone told me there was a moratorium on the closure of Mindemoya,” one delegate had interjected during the delegate group discussion.

Delegate Pentti Palonen confirmed that, during the amalgamation process, such a sentiment was expressed. “Espanola was told that ‘Northern Credit Union is not in the business of closing branches’,” he said. Mr. Palonen noted that the Northern Credit Union branch in Iron Bridge has smaller numbers.

“It isn’t in our DNA to close branches,” agreed Mr. Suraci. “When the Mindemoya branch was established (by the previous Espanola and District Credit Union) there was a five-year timeline in which to ascertain whether it could be operated at least at a break even level. The lease is now coming up and we looked at the numbers.”

Those numbers did not look promising. There was no indication that the branch would become profitable in the foreseeable future.

“The board took a very hard decision to confirm the management’s recommendations,” said Mr. Suraci.

But in the case of the Iron Bridge branch, Mr. Suraci noted that the bank in that community was leaving, and after reviewing the numbers for that community branch the business case could be made for the credit union to remain.

During the delegate group meeting, Mr. Palonen repeatedly cautioned that the delegates actually have no solid information on the closure other than what was contained in the official press releases from the credit union and in the absence of official information, most of the discussion taking place was based on conjecture.

Mr. Shaffer agreed, noting that “there is nothing that we know.” He said that he was trying to choose his words carefully and to “be a good delegate” but that it “cuts a little deep to be the last to know.”

Delegate Bill Lewis noted that, although the role of delegates is still under development at the credit union, “I don’t think we have any say.” Mr. Lewis went on to say that he felt the announcement was “done poorly.”

Mr. Suraci, for his part, noted that the reactions of the delegate group were reflective of what the credit union was hearing as well. “It is something that we are having as a take-away,” he said, agreeing that this has been a “lesson learned.”

Mr. Palonen suggested that the delegate group should seek more information as to the reasoning behind the closure. “That would be the best way to do it, get hold of Brian (Cairns, the delegates group’s official board representative).”

“I think we should go right to Tim (Foster, chair of the board of directors of Northern Credit Union),” said Mr. Brandow.

Ms. Shaffer agreed that the board does owe the delegate group an explanation as to why they were left out of the loop and what lay behind the closure decision.

Delegate Ron Kenney of Mindemoya noted that such decisions are a management issue. “The board is not going to overrule the management (on a closure decision),” he said.

In fact, Mr. Suraci confirmed that consultation with the delegate group on administrative matters was not in the cards. “The administrative group does not report to the delegate group on operational matters,” he said. Mr. Suraci did, however, affirm that the credit union does make its decisions based on the best interests of its members.

“We do serve our membership,” he said. That service includes not only providing the best services demanded by the membership, but as an organization owned by its membership there is a responsibility incumbent upon the board and management to make the best decisions in the interest of the credit union’s members.

The challenge, he noted, is that, like other financial institutions, the credit union membership is making increasing demands for more digital services and less on brick and mortar availability. It is a trend reflected not only in the financial services industry but in many other industries as well as the disruptive force of the Internet makes its presence felt.

Mr. Suraci used the example of the fate of the Blockbuster Video chain and more currently, the disruptive impact Uber and Air BnB are having on the taxi and hospitality industries, respectively.

During the delegate group meeting, Mr. Brandow noted that the way the delegate group was handled in the announcement “still leaves a sour taste in my mouth.” Mr. Suraci assured The Expositor that the credit union would be reaching out to the delegate group in the near future.

After some further discussion at the delegate group meeting it was decided to send a letter to the board chair, bypassing the board liaison, to seek further information. It was pointed out that although the board and management were aware of the August delegate group meeting, neither the liaison (Mr. Cairns) or any other representative was in attendance.

Mr. Suraci reiterated that the whole matter would serve as a lesson to the credit union going forward.

As to the question of whether the credit union would leave an ATM at the current location or at some other location in the Mindemoya community, Mr. Suraci was unequivocal. “That is a non-starter,” he explained. “In order to break even, an ATM would need 5,000 transactions a month—currently the Mindemoya ATM averages about 500 a month.”

But Mr. Suraci said that one of the options being explored by the management group was to have “existing ATMs in the community available to our members at no additional cost.”

As to the criticism that the credit union was acting more like a corporation than the grass roots organization from which it sprang, Mr. Suraci pushed back. “The credit union is in the business of providing financial services to our members,” he said. “Without our members, we wouldn’t be in business. The credit union’s roots are our local members and this closure was a hard decision to take, but the Mindemoya branch was a long way from returning to profitability.”

As to whether any other branches were shaky in their business cases, Mr. Suraci was adamant. “We are committed to the Espanola and Little Current branches,” he said.