What Canada's credit unions have to do

The news that the credit union centrals in Ontario and British Columbia are going to merge isn't exactly going to scare the Big Six banks in Canada any time soon -- at least, not in the English speaking regions. That's because the centrals still face a fatal flaw, the inability or unwillingness to encourage their member CUs to use a common brand name.

Why is that important? If I have money parked somewhere and I need to take it out, I'd like to know by a common logo or brand name that's where I can go anywhere in a province or country without having to incur Interac fees for using a competitor's machine. And I mean on the street, not stuck on a tiny label on the machine inside the physical plant. With dozens of credit unions who compete against each other as well as the banks and trusts, it may be easy for them to have local presences but very difficult to reach out beyond their communities. While credit unions in British Columbia do make a point in their advertising their fee-free withdrawal policy from any other CU in the province, the ones in Ontario do not which is why they are minnows in the pond.

That's not the case in Québec, where Caisse Desjardins is a force to be reckoned with. With 5 million members just in that province, this co-operative of over 500 local credit unions has shaken up financial services in a way that would make the rest of the country blush. Not the least of these is that it actually sells home and auto insurance right at the teller counters, something the banks are forbidden to do. It was also the first financial institution to cater to the huge "snowbird" population. The genius of the system is that people are members of local CUs -- sometimes one of many in a city -- but they don't have to worry about the name. A Desjardins in the financial district of Montréal is the same as a Desjardins in, say, Chisasibi over 1500 km to the north. They may be legally different CUs but they are part of the same group. Desjardins also does business in New Brunswick, Ontario and Manitoba and they've made no bones about wanting to be taken seriously there too.

So advise to the centrals: Learn from those who made it work. Try to come up with a common brand name; say "Provincial One" for example, and have your member CUs change their signage to reflect that. Then maybe you might convince people you are serious about taking on the banks -- because the more identical signs you have the bigger your presence and the higher intake of business you'll get. The banks deserve to get clobbered so actually use the tools at your disposal.

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