As BC credit unions consolidate members disengage, creating an ownership vacuum. This is a structural weakness that is ignored in the current BCFSA review of governance risks. It is time to face the ‘ownership risk’ head on.
The Great Canadian Credit Union Merger Debate fell short. No counter arguments were made and there was no elaboration on the future of a ‘sector’ or a ‘social movement’.
Rapid consolidation in the BC credit union sector will create a small number of very large credit unions, and new problems.
Credit union financial reporting standards in BC are too low and out of date. The standard should be higher in light of consolidation and technological change.
The C1 proposals serve the interests of larger credit unions, in the way risk would be redistributed and the way political power concentrated.
BCFSA is not targeting the risks, risks that are highly concentrated in the very large institutions, and community-based credit unions may be the collateral damage.
Classic or community-based credit unions are under stress. Leadership is needed to take on the challenges.
The failure of MEC is the result of a perverse definition of success, also taken up by credit unions.
When managing risk & uncertainty, statistical models are no substitute for cautious, reasoned judgement.