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As banks close branches in rural Canada, are credit unions our only hope?

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Credit union signage. Photo: Big City Signs/flickr

Two years ago, I found myself fighting one of Canada's national banks to have a cheque reversed.

An organization with a mailbox close to my own had cashed a cheque in error that was intended for us. The $204 cheque was clearly made out to our organization, but the bank allowed the other to cash the cheque and keep the money. After a few attempts to have the money reversed, our organizations had to agree on a solution that didn't rely on the bank to help us out: we received a cheque from the organization who cashed our cheque in error.

Last summer, a similar thing happened, though rather than an error, it was straight-up theft. A cheque sent to a friend for $50 was stolen from her mailbox, and over the place of the decimal, a zero was drawn in. Words were scratched out and $50 was cashed as $500, illegally.

It took my partner hours on the phone with TD bank, multiple visits to TD and CIBC and about two months of work to get this $500 refunded. The cheque was clearly forged and it took a great effort on our part to get TD to care.

In both circumstances, I acutely felt a lack of front-line banking staff was exacerbating both issues. We never spoke to the same person twice, we were bounced from virtual department to virtual department and in the end, both solutions were the bare minimum we had hoped for in resolving the issues.

I bank with several banks. I also bank with several credit unions: Desjardins for our apartment, Vancity for my union, Alterna Savings for my work and Tandia for my savings. At each, I have a real-life human who I am in contact with to work through whatever issues arise. But, with my home Royal Bank branch, an account that was opened for me in 1986, I have no similar luck. Even when I call the branch number, I'm bounced to someone in a call centre in another part of Canada, or the world.

Our financial institutions have moved more and more online, and steady contact with individuals who work there is vanishing. For most day-to-day banking, that's fine, but when you need to actually talk to someone about your debt or your savings, or someone breaking into your community mailbox and cashing your cheques, going into the branch remains important.

The five big banks made a collective, record profit of $35 billion last year, and still bank branches are closing across Canada: TD and CIBC are closing branches in Atikokan, Ontario, TD is closing branches in Sarnia and South Porcupine, Ontario, CIBC is closing the only bank branch in Elkhorn, Manitoba, and RBC, TD and CIBC are closing 20 rural bank branches across Saskatchewan -- many in towns where the branch is the only local bank. Scotiabank plans to slash five per cent of their branches across Canada.

These bank closures mean job losses in small and rural communities, places that rely on these kinds of jobs to continue to exist. The jobs are moving online, where individuals, both customers and workers, lose real-life, human interaction, and worse, in many cases, are replaced with nothing so that the banks can continue to make record profits.

As bank executives and shareholders horde even greater profits, and as fewer small communities benefit from a few dozen jobs, an important redistributive mechanism vanishes: fewer jobs means less money in these smaller centres to circulate and stimulate their economies.

This climate makes your local credit union look more and more attractive. Banking with a credit union is all of the financial services that you need, and none of the multi-billion-dollar profits and job slashing of the big banks. The only other option is cash stashing in your mattress, which isn't a bad option, it just doesn't create any jobs either.

This is probably why the Office of the Superintendent of Financial Institutions is cracking down on credit unions who use the word "bank" to describe their financial services. Credit unions will have to eliminate all references to "bank" or "banking" in all their materials, including "online banking," by 2019. No word on whether or not "screw the banks, place your money with us" would apply.

It's a slimy move that will cost the credit unions a lot of money in rebranding, and confuse Canadians who are unsure about using a credit union. If you've ever banked with a credit union, you'll know that the only difference is that you receive better service, but if you haven't, making the switch might feel daunting.

The banking industry will do whatever it can to protect itself; that's obvious. But Canadians need to move their money away from banks who are all too happy to abandon them to make even more money. Don't worry that your credit union's online banking feature will have to soon be called "online money putting location," front-line staff and community investment will always beat corporate greed.

Photo: Big City Signs/flickr

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