In January the Canadian Credit Union Association convened a conference to consider a national ‘shared vision’ for credit unions outside of Quebec. I did not attend, but I have read the papers presented.
Two papers looked at federation models and the potential for Anglophone credit unions to learn from the Desjardins Movement and Federated Co-ops. A third paper looked at the changing contexts, trends and pressures. This third paper, by Marc Andre Pignon, essentially outlined the pathway for ‘Federal Credit Unions’ under the Bank Act.
All three are well written, polite, and thoughtful explorations of the choice facing our credit union system: (a) success and scale though co-operation so that local democratic ownership is respected, or (b) go it alone to build a national ‘bank’ with a single board of directors.
The paper called ‘What Can Credit Unions Learn From Desjardins?‘ is the most intriguing. Phil Braginetz does a good job of defining the business and ownership issues in the Caisses Populaires movement. Two decades ago the leadership there tried to reconcile major streamlining of corporate structures and the retention of the local ‘caisses’. They succeeded.
Credit unions are distinct political projects, something that we often fail to appreciate. The self-help vision, the ‘we can provide for ourselves’ business model, stands in contrast to large, highly centralised institutions. In addition (though Braginetz does not emphasise it) the federated model builds on participatory democracy, with many volunteers sitting on boards, thereby creating a political block with clout in provincial and federal politics.
The threat created by the ‘Federal Credit Union’ option is serious. Large provincial credit unions will exit and become hybrid banks. Those remaining ‘local’ need a game plan. The federation option is staring provincially chartered credit unions in the face. Smaller and medium size credit unions will have to develop second tier structures that secure their futures.
The current second tier structures marginalize small and medium size credit unions. Proportional controls at Central 1 and the CCUA favour the very large. Provincially chartered ‘local’ credit unions may want to create their own coordinating entity or federation to serve that set of interests.