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The Voice of Canadian Credit Unions July/August 2017

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Inside

Editor-in-Chief Roberta Staley

Consulting Editor Nicole Adams

Art Director Stu Ross

Editorial Assistant Suzann MacKinnon

Contributing Writers Brenda Bouw Sarah Brown Art Chamberlain Peter Diekmeyer Alexandra Gill Wendy Goldsmith Alexandra Samur

Contributing ArtistsStu Ross

Enterprise is published six times a year by Central 1 Credit Union Member & External Communications 1441 Creekside Drive Vancouver, B.C. Canada V6J 4S7

Contact Roberta Staley, Editor-in-Chief E [email protected] Send change of address notices to: [email protected]

Central 1 Credit Union Board of DirectorsRick Hoevenaars, Chair William (Bill) Kiss Vice-chairBill Cooke Elmer Epp Kerry Hadad Angela Kaiser Joel Lalonde Shelley McDade Penny-Lynn McPhersonJan OBrien Rob Paterson Blaize Reich Launi Skinner Rob Wellstood

Cover Photo/Illustration Shutterstock

July/August 2017Vol. 76, No. 4

The opinions expressed in articles in Enterprise are the authors and not necessarily those of Enterprise or Central 1 Credit Union. In addition, the inclusion of an advertisement does not imply an endorsement of the product or service by Enterprise or Central 1 Credit Union. Enterprise will not knowingly carry false or misleading advertising. Enterprise reserves the right to refuse any advertisement. Both Enterprise magazine and Central 1 Credit Union disclaim any and all warranties, whether expressed or implied, including (without limitation) any implied warranties of merchantability or fitness for a particular purpose and neither Enterprise nor Central 1 Credit Union will accept any responsibility for the readers use of the information and / or opinions presented in Enterprise or any loss arising therefrom. The contents of Enterprise are covered by copyright and all rights are reserved. No material in this publication may be reproduced in any form without permission.

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MET to replace

Nurturing roots, sowing growth

14Leading Edge Credit Union is making a difference becoming a community enabler rather than just a community player. BY BRENDA BOUW

enterprise-magazine.comJuly/Aug 2017 3

OnlineOnline Check out Enterprise online for exclusive stories, news, in-depth features,

back issues + more. Go to www.enterprise-magazine.com.

Stormy WeatherGrowing global debt levels and soaring house prices are two indicators foreshadowing a possible financial crisis down the road. BY PETER DIEKMEYER

10

Marketing Matters

Millennials are embracing prepaid cards, inspiring Desjardins to use them as a tool to attract young members BY SARAH BROWN

27

Concierge

Strangers meet over mortgages, seniors take on more debt, MPs and senators join a credit union caucus

05

Shortcut

Credit union history is interwoven into Canadas 150 years of confederationBY ROBERTA STALEY

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Work Life

A credit union today is a blend of regular staff, consultants and contractors, thanks to the growth of the digital economy BY ALEXANDRA SAMUR

26

Interview

Eddie Francis, Windsor Ont.'s former mayor, has taken the helm of Windsor Family Credit Union BY ALEXANDRA GILL

8

Fill in the GapsIt can be challenging for smaller credit unions, or those in isolated, rural areas, to staff their employee roster with highly specialized personnel. BY WENDY GOLDSMITH

18Growing PainsThe Canadian Credit Union Association is addressing a myriad of issues as it inches its way towards becoming the systems national trade association. BY ART CHAMBERLAIN

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04 Editors Note Trending Topics

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Editors Note

Trending Topics

In 1867 150 years ago a union of the seven British North American colonies: Lower Canada, Upper Canada, Nova Scotia, New Brunswick, New-foundland, St. Johns Island and Cape Breton Island, was formalized under the British North American Act, known today as the Constitution Act. As Canadassesquicentennial is cel-

ebrated from coast to coast with a host of festivities, fireworks, speeches and special events, it is worth thinking back to the origins of the credit union system and its impact on society. Starting with the inimitable and idealistic Alphonse Desjardins, whose name lives on through the cooperative financial juggernaut Desjardins Group, the credit union system has, at 117 years old, been deeply embedded within the national fabric of the country almost since confederation. An indomitable sense of community and a vibrant creativity have marked credit unions over this century-plus of serving mem-bers. Some of the innovations that have made members lives easier are presented in our regular column Shortcut a reminder of how much inventiveness continues to flourish within the system.

This issues theme, Trends, explores the many sea changes that are trans-forming the way credit unions are run. Some of these shifts are global in nature, or dictated by bubbling regional housing markets topics that are explored in Stormy Weather. In Fill in the Gaps, Enterprise looks at how credit unions with branches in rural areas are ensuring they have access to highly specialized staff, who are usually relegated to large, busy urban centres. Ways of dealing with this are discussed in Work Life, which lays out the blend of full- and part-time staff, consultants and contractors that increasingly populate todays modern financial cooperative.

Finally, with moves afoot to make credit unions more efficient and to eliminate duplication, Enterprise looks at the complex evolution of the Canadian Credit Union Association, the systems national trade association, in Growing Pains.

We hope you enjoy the read but, even more, we hope you have a wonderful summer in this 150-year-old nation we call home.

Roberta Staley EDITOR-IN-CHIEF [email protected]

We help Boards and Executives make sustainable, differentiatedimprovements in the performance of their credit unions.

We are a national credit union consulting company with clients from coast to coast. Large or small, rural or urban, we help all credit unions succeed. Your credit union, your way.

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CoastCapitalSavingsgifts$1milliontoSFUThis past May, Coast Capital Savings Credit Union, (543,000 members, $15 billion in assets) gave $1 million to Simon Fraser University in Burnaby, BC to help support the universitys business incubator program, which has been renamed the Coast Capital Savings Venture Connection. The $1 million donation, which will support the program over a five-year period, is part of Coast Capital Savings mandate to build a richer future for youth.

Starting in 2008, with Coast Capital Savings as its first corporate sponsor, the program has offered entrepreneurship training services and opportunities for students, faculty, staff and alumni. The funding helped provide entrepreneurial services to more than 6,000 participants and about 500 student teams. With support from mentors-in-residence, the program has led to 170 start-up ventures.

Previous to this latest donation, Coast Capital Savings had given $125,000 in 2008 as seed investment, then $750,000 in 2011.

Coast Capital Savings CEO Don Coulter said in a media release that the leadership shown by SFU in supporting youth entrepreneurship and innovation makes this partnership a natural fit for us. We are delighted to invest $1 millionand follow the success of the enterprises that flourish with the support of the program.

COMMUNITY

BY ROBERTA STALEY

INDUSTRY NEWS, STATS, FACTS + MORE

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Concierge

GOVERNMENT RELATIONS

Federalall-partycreditunioncaucusA new, allparty caucus has been formed in Ottawa that will improve communications between parliamentarians and the Canadian credit unions that provide financial services

in their riding, reports the Canadian Credit Union Association (CCUA).

The caucus will serve as a col-laborative forum between MPs, senators and the credit-union sector to find innovative ways to achieve economic growth and address com-munity concerns and challenges.

Government, along with opposition MPs, agreed to form the caucus to increase awareness of the important and unique work that credit unions and caisses populaires do within the financial services industry. We are encouraged by the real interest among MPs to work closer with credit unions and with each other to better understand how our cooperative structure leads to good public policy outcomes for their constitu-ents, the CCUAs CEO Martha Durdin remarked in a media release.

TRENDS

SeniorsrackingupdebtCanadian seniors are borrowing more and requiring credit counselling to deal with it.

Equifax reported this past May that the debt held by those age 65 and up averaged $15,244 in the fourth quarter of 2016. This is lower than the Canadian average of $22,113 but nonetheless has increased 6.1 percent since the 2015 fourth quarter, reports The Canadian Press. And these indebted seniors are seeking help. The Credit Counselling Society states that people aged 55 and over now make up 21 percent of its clientele, an increase from five percent 20 years ago.

TRENDS

ThekindnessofstrangersAs early 20th-century American entertainer Will Rogers once said, A stranger is just a friend I havent met yet.

In todays immoderately priced mortgage market, this pithy saying may well become the descriptor of the future of home ownership, thanks to a startup called GoCo Solutions, launched by Royal Lepage realtor Lesli Gaynor. This past May, Gaynor organized a speed-dating style event in Yorkville, Ont. where prospective homeowners strangers were invited to meet other like-minded people for a tte--tte about going together on a mort-gage, Yahoo Finance Canada reported.

The concept for GoCo Solutions concept was based upon Gaynors own positive experience as a single mother

who signed a mortgage with a friend. The pal lived upstairs, Gaynor and her child lived downstairs. The rela-tionship, Gaynor found, was mutually beneficial in terms of responsibilities and took the pressure off solo mortgage financing.

Some credit unions in Ontario have warmed to the idea. Meridian Credit Union (300,000 members and $14 billion in assets) recently launched a family and friends mortgage, allowing up to four individuals on title. Mean-while, DUCA Financial Services Credit Union (54,000 members and $2.5 billion in assets) launched its More Together mortgage this past May, which allows up to six people on title.

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Interview

The reluctant politicianEddie Francis, former Windsor, Ont. mayor and newly anointed Windsor Family Credit Union CEO, is bringing some controversial new ideas to the table.by Alexandra Gill

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Eddie Francis, the new CEO of Windsor Family Credit Union (37,000 members, $1.6 billion in assets), thought he was done with politics.

At the risk of being the new guy stirring the pot, says Francis, who

became WFCUs CEO this past May, there is more politics in the credit-union system than there was in the political world.

Francis knows of what he speaks. Before joining one of Ontarios largest credit unions in 2014, initially as executive vice-president of operations and member services, Francis had already served three terms as mayor of Windsor, Ont. He was the citys young-est mayor ever, first elected in 2003 at 29.

Something of a maverick, he never really considered himself a politician, preferring to call himself the CEO of the Corporation of the City of Windsor. Yet he certainly earned his stripes. With a tough-love style of leadership (one that earned him a rep-utation as a control freak by both friends and foes), he steered the then-struggling auto town through its worst recession holding the line on taxes, battling it out with unions, investing in infrastruc-ture and jet-setting across the globe for new business opportunities. All of this laid the groundwork for the Wind-sor Renaissance, now widely touted as one of Canadas biggest economic success stories. (The city enjoys one of the lowest unemployment rates in the country and the economy is growing faster than the national average.)

As a promise to his family, Francis got out of politics early, while people were still going to talk to me if they saw me in the grocery store. The timing was almost tragically fortuitous. Two weeks after Francis announced that he would not be seeking a fourth term, his wife, Michelle Prince, was diagnosed with colon cancer. She is still undergoing chemotherapy.

Francis turned down offers from political parties at both the provincial and federal levels, among other opportunities in the private sector, for the chance to join the credit union system. There is something very unique about the credit union system, he says. What sets us apart from the banks is what we do with that profit

we invest it back in the community. But as a system, here in Ontario, we barely scratch the surface. (In Ontario, credit-union mem-bership, as a percentage of the population, is only 11.5 per cent, one of the lowest rates in the country.)

Now Francis is entering the next phase. As CEO, he is determined to grow WFCUs membership far beyond Wind-

sor-Essex County, unite Ontar-ios fractured credit-union system (bringing its waning market share on par with prov-inces out West) and take on the big banks (positioning all credit unions as a better alter-native). Ironically, he finds himself pretty much back where he started immersed in politics. If credit unions can come together and serve

the greater Ontario population as we serve our communities, think of how much better we can be, he says.

Some say it cant be done. They say that collaboration has been tried before and failed. Fortunately, at least for WFCU, Francis is driven by the chal-lenge of proving people wrong. When I first ran for office, they said I was too young. Then they said I would never be re-elected. When we tried various initiatives, they said it would never work.

Not unlike his time in politics, some of the initiatives Francis has introduced at WFCU have been greeted with skepticism. Take payday loans, for example. Some say credit unions have no business get-ting involved in the predatory cycle of short-term financing. Francis, on the other hand, says its the responsible thing to do. When you look at the origins of the WFCU, thats how we started on the plant floor, decades ago. People would come in, they needed to get by to the next cheque and we advanced cash.

To those who suggest we shouldnt be doing it, I say its exactly the thing we should be doing. It would be socially irresponsible of us to ignore the issue. And its not just for Wind-sor-Essex. Its an issue in every community across Ontario.

These sorts of innovative solutions, ones that serve the needs of the community, are the key to meeting his challenge of strengthening the credit-union system as a whole. Credit unions should become the first choice for consumers in Ontario. Its no different than when I was mayor. As mayor, I was respon-sible for deriving the best value for my community. As a leader in the credit union system, those principles hold true.

IF CREDIT UNIONS C A N COME T OGE THER

A ND SERV E THE GRE ATER ON TARIO

POPUL ATION A S W E SERV E OUR

COMMUNITIE S, THINK OF HO W MUCH BE T TER W E C A N BE .

EDDIE FRANCIS

STORMY WEATHER

The last global financial crisis began nearly a decade ago in the United States. In light of sky-high housing prices in many Canadian cities, numerous measures are being taken by regulators and governments to cool heated markets to guard against a repeat of that calamitous time.by Peter Diekmeyer


In such an environment, it might be prudent, as the saying goes, to hope for the best but expect the worst. There will be another crisis, with new things that we have not seen before, predicts David Finnie, chief risk officer at Central 1 Credit Union. Finnie has been monitoring such bub-ble-like characteristics in a variety of asset classes, growing global debt levels and other possible triggers. Credit unions have shown

great resiliency for almost a hundred years. The key is to have effective

risk management approaches which build in proactive response plans, Finnie says.

Sheila Judd, executive-in-residence at the Global Risk Institute in

Toronto, agrees that there are risks in the system but notes the challenges

facing credit unions differ from those facing the banks. Credit unions focus more on consumers and small businesses and are generally seen as more stable and predictable, says Judd. But their smaller size and regional and sectoral focuses leaves them more vulnerable.

There are, indeed, vulnerabil-ities. The average price for homes sold in Canada this past March was $548,517. That was up 8.2 percent from a year

earlier, according to Canadian Real Estate Association data, and is part of a long-time secular trend. This number is disconcerting when compared to other global markets. For example, the Economists house price indicators index from March suggest that the average Canadian home is 112 percent overvalued relative to rents and 46 percent overvalued relative to household incomes. These are near the highest levels

A few months ago, Toronto-based alternative mortgage lender Home Capital Groups stock dropped by 60 percent in a single day, falling to an all-time low of $5.99 on April 26 from a high of $55.24 in mid-2014. Why? Lack of liquidity, caused by the with-drawal by customers of $591 million from high-interest savings accounts. The free fall

had ominous echoes of the United States subprime mortgage crisis of 2007, which was foreshadowed by a liquidity crunch for subprime lender New Century Financial

Corp. This sparked the American, and then global, recession.

Home Capitals woes were also rooted in its subprime lending

operations. Its subsidiary, Home Trust Company, provided uninsured mortgages to

clients who couldnt obtain home loans from conventional financial institu-

tions. A crisis in confidence in Home Capital led to the withdrawals, which the

company tried to mitigate with a $2 billion line of credit.

The ripple effects across Canada are still being assessed and will likely only impact less credit-worthy borrowers. Nonetheless, Home Capitals challenges came at a time when Canadas credit unions are heavily invested in expensive mortgages. The mortgage land-scape itself is also in flux, with a Toronto housing bubble threatening to burst due to recent decreasing sales and soaring new house listings. Even red-hot Vancouvers home price growth has slowed. (At least short term.)

There will be another crisis, with new things that we have not seen before. - DAVID FINNIE

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of overvaluation in the global survey. Even public officials have expressed concern. Governor of the Bank of Canada Stephen Poloz stated at a press confer-ence following the release of the Crown corporations quarterly Monetary Policy Report that the Toronto housing market is divorced from fundamentals.

Yet, while housing has attracted considerable public attention, its not the only risk facing credit unions, says Finnie. Signs of trouble abound through-out the global financial system. Canadian and US stock market indexes traded near record highs this past May. Increases in household wealth the so-called wealth effect are global in nature and acknowledged as a stimulus on consumer spending.

While no one is predicting huge job losses in Canada, a worry for Canadian credit unions today is, as Finnie says, the weak financial

positions of many households and the challenge many would face should interest rates rise.

Shadow banking presents a threatAnother concern, says Judd, is that

the worlds financial systems are now so interlinked that in a crisis, challenges in one country or sector could quickly spill throughout the system, affecting credit unions. One such worry is the shadow banking system, Judd says. The US Financial Stability Board estimates that this growing category,

which includes mortgage investment corporations, non-bank broker

dealers and credit hedge funds, had amassed $36 trillion in assets by the end of 2014. A report by the Global Risk Institute released earlier this year suggests that the risks

in these entities are partic-ularly high as they are not

regulated to the same degree as banks and credit unions.

Financial sector officials cite a variety of factors that

differentiate current events from

those of the 2007-2010

recession, however, they also cut a strong distinc-

tion between the situation in Canada and the rest of the

world. Many of the riskier activi-ties that banks were involved with in the past, such as complex off-balance sheet securitizations and credit derivatives, have been sharply reduced, Judd says. The former banker also notes that

Canadian financial institutions now have higher liquidity coverage ratios than they did pre-recession and have been quick to adhere to tough Basel III reserve targets. The biggest challenges come more from outside the (banking and credit union) system rather than from within.

Sector proponents also argue that Canadian financial institutions have full recourse to a lenders assets to guar-antee their loans. (This contrasts with the US during the subprime mortgage crisis, when homeowners walked away from their mortgages without penalty, a key factor in the countrys recession.) Loan quality is higher north of the 49th parallel where, as of August 2016, $514 billion worth of residential real estate debt was guaranteed by the Canada Mortgage and Housing Corporation, which can sue an owner for any losses it has to cover for a lender.

Governments are taking steps to stabilize housing markets. Foreign buyers of homes in the Vancouver area are now subject to a 15 percent tax. Other measures protect BC credit union members, says Frank Chong, acting superintendent

at Financial Institutions Commission (FICOM), a regulatory agency of the provinces Ministry of Finance. Credit unions have strong levels of capital and liquidity, Chong says. Furthermore, FICOM recently oversaw liquidity-related testing on BC credit unions in consulta-tion with the Office of the Superinten-dent of Financial Institutions (OSFI), which considered a variety of calamitous scenarios, including the effects of a 40 percent drop in house prices. FICOM is also currently working on new liquidity risk management guidelines to further increase stability.

In Ontario, Premier Kathleen Wynne looked to BC when she introduced the provinces Fair Housing Plan several months ago. This included a 15 percent tax on foreign speculators in order to

Credit unions have strong levels of capital and liquidity.

- FRANK CHONG

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cool the Toronto housing market. At the federal level, new mortgage borrowers are also now subject to personal finan-cial stress tests to make sure that their budgets can accommodate a rise in interest rates.

A complex regulatory environment Complicating matters is a regulatory environment composed of an array of agencies at various levels of govern-ment. This leaves the system open to cracks. To allay this, Central 1, for example, hired Finnie, the Global Risk Institutes former managing director, as chief risk officer to monitor the credit unions financial statements and early-warning triggers and to oversee depth system and liquidity reviews. Finnie is also creating a new crisis-management plan and preparing to run a new series of stress tests.

Adding to the anxiety is the down-grade given Canadas six big banks this past May by Moodys Investors Service.

The downgrade reflected concerns about housing prices and consumer debt, which could reasonably weaken future asset quality. (TD Banks long-term rating was downgraded to Aa2; the five other banks fell to A1.)

Grounding the Canadian economy are several positive factors, says Jimmy Jean, an economist at Desjardins Group (seven million members, $261 billion in assets.) Jean cites strong consumer spending, positive first quarter gross

domestic product growth numbers and a turn in Albertas energy sector as bullish indicators going forward. Cur-rency traders often regard Canada as an energy and resources economy but that is not really totally true anymore,

says Jean. For example, we currently have the worlds third most educated work force and many automatic built-in stabilizers that helped us make it through the recent plunge in oil prices relatively well.

None of us, unfortu-nately, has a crystal ball. Given the speculation and worry about the future of the Canadian housing

market, which was worsened with the plunge in Home Capitals stock, it is safe to say that the mortgage industry including credit unions should buckle up for a more challenging environment in the coming year.

Credit unions focus more on consumers and small businesses and are generally seen as more stable and predictable. - SHEILA JUDD

MobileApplication Penetration

TestingContact Sean Gillen for more information 1-800-747-3557 Ext.234 [email protected]

DBG_HalfAD_SeanGillen_060417.indd 1 2017-06-06 11:40 AM


Leading Edge and Conexus credit unions are taking corporate social responsibility to the next level by actively engaging in community development.B Y B R E N D A B O U W

What do a credit union and a long-dis-tance relay race have in common? For Leading Edge Credit Union (8,435 members, $115 million in assets) in Newfoundland and Labrador, theres a clear alignment of community and economic values not to mention the sweat equity required to reach an end goal.

Its those similarities that inspired Leading Edge to host Newfoundland and Labradors

Annual Lighthouse Relay, Race to the Sea. Instead of just writing a cheque to keep the event going after it faced resource constraints, Leading Edge stepped in and took it over in 2013. It saw the event as a way to engage and give back to the community, promote health and fitness and do its part to bring in tourism dollars. There are a number of wins, says Leading Edge CEO Cory Munden. We bring runners in from across Canada, add economic stimulus to the area and promote healthy living. Participants range from newbies running in jean shorts and T-shirts to profes-sional runners in top performance gear.

The annual 120-kilometre, 11-leg race which travels along the breathtaking southwest coast of Newfoundland in August is just one of a number of initiatives Leading Edge is working on as part of a shift away from being a community player to more of a community enabler. Weve turned the dial from simply

pushing out money to commu-nity organizations to taking a leadership role and solving some socio-economic issues in our communities, Munden says.

Supporting community vitalityMore organizations are changing their business models to be more proactive and less reactive in the communities where they operate, says Coro Strandberg, a sustainability strategist and president of Vancouver-based Strandberg Consulting. Its a shift in how businesses are thinking about their roles in community. Its about how to go beyond ad-hoc cheque writing to a more strategic approach.

Financial institutions, credit unions in particular, are well poised to strengthen their community engagement given their direct connection to custom-ers and communities. They have a strong reach into the community already, Strandberg says. They can be a powerful instrument for community well being.

With that power comes the responsibility to help support and build communities over the long term. Credit unions are closely tied to their communities, which means when one struggles the other is affected, Strandberg says. Its why strong, sustainable community programs and initiatives arent just nice to have, Strandberg says. Its a business imperative to strategically support community vitality.

CORY MUNDEN CEO, LEADING EDGE

Nurturing roots, sowing growth

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is what we represent. If were going to say were a cooperative we need to be living and breathing the cooperative model.

Social impact bonds an alternative finance optionAnother solution credit unions are consider-ing are social impact bonds, a pay-for-suc-cess alternative financing model that uses

private capital to provide a social program. With social impact bonds, the government identifies a program and then seeks out private investors to fund it. If the project is successful, the government repays the investors a pre-arranged sum.

Canadas first social impact bond was arranged in Saskatch-ewan to support Sweet Dreams, a facility in Saskatoon that provides mothers with a safe place to live with their children while they finish school or seek steady employment. Sweet Dreams was created thanks to a social impact bond between the Saskatchewan government, EGADZs Saskatoon Downtown Youth Centre (which runs the home), Conexus Credit Union (123,000 members and $5.6 billion in assets) and Saskatoon philanthropists Wally and Colleen Mah. The projects five-year goal was to keep 22 children out of foster care and with their mothers continuously for more than six months after participating in the program.

Living and breathing the cooperative modelLeading Edge began to rethink its com-munity investment initiatives after doing a cooperative principle audit of its orga-nization a few years back. Through that process, the credit union realized it wasnt doing enough to boost engagement with its members or help build capacity in the communities across the province where it has branches. That includes locations where the big banks pulled out because the business was no longer considered viable. We were doing a good job of being a finan-cial institution, Munden says. What we werent doing a really good job of was being a cooperative. Since then, Leading Edge has been on a mis-sion to bring back and deepen the cooperative principles across the organization, in particular by supporting the sustainable development of communities. Even a credit union of our size, with limited resources, can do these things, Munden says. Its a hands-dirty philosophy.

Alongside theRace to the Sea event, Leading Edge is also a key driver behind the Growing our Future Childcare Co-operative (GOFCC), which is building a 38-space daycare inthe commu-nityofChannel-Port aux Basques on Newfoundlands west coast. The project is receiving funding from all three levels of government and Leading Edge ispro-vidingan interest-free loan. The munici-pality also donated the land on which the daycare is being built, as well as forgiving fees for water and sewer hook-ups and performing some site work.

The development aligns with the cooperative principle and concern for com-munity, Munden says. We arent doing this because its a nice thing to do. We are doing this because its who we are. This

Its a shift in how businesses are thinking about their roles in community. Its about how to go beyond ad-hoc cheque writing to a more strategic approach. C O R O STR A N D B E R G

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They reached that goal within the first two years. They over-delivered, says Jacques DeCorby, senior vice-president of retail banking at Conexus, citing the work of EGADZ executive director Don Meikle and his team.

Meikle says that its more than the money that has helped them succeed so far; its the support from those involved in

the bond. Its so powerful to know that other people in the community believe in you and what you do, Meikle says. Theyre more than investors, they really believed in the project. He says that the social impact bond arrangement is also better than other models because

its a multi-year commitment and free of government red tape. Whats more, he is able to run the program independently and in a way he believes is most effective. It has really allowed us to focus on the vision, values and mission of our organization to

provide the level of service we believe will make it success-ful, Meikle says. Of course, what really matters is how the moms we are working with at Sweet Dreams are making positive changes and what this means for both them and their kids. He describes Sweet Dreams as life changing for the families involved and we are going to continue to work

hard to improve the lives of moms and their children.

Investors like Conexus also like the social impact bond model because its transparent, accountable and arguably more effective than simply writing a cheque. The idea was very attractive because it requires a very clear definition of the outcome youre

JACQUES DECORBY SENIOR VICE-PRESIDENT

OF RETAIL BANKING,CONEXUS


board, he says. We are now open to do business in the social impact bond space. We think this is a space that credit unions can step up and own.

The capacity to be social innovatorsStrandberg is excited and inspired by the examples from Conexus and Leading Edge, which she sees as leveraging their core competencies as financial institu-tions for social good. They show the

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capacity of the credit union system to be social innovators.

More credit unions need to do this kind of work and push boundaries to reengage with the cooperative principles they were built around and help to build stronger communities, Strandberg adds. The more they can tell that story and promote the roadmap and the tools, the sooner credit union boards and managers can seize the opportunities and address the risks. After all, thats the role of a financial institution and a unique role of credit union as opera-tives in their communities.

trying to achieve, says DeCorby. It also makes it easier to sell to stakeholders who may question the investment. It needs to be something that is very measurable, which can be hard to do sometimes, DeCorby adds. Its also a natural fit for the coop-erative business model because it allows the credit union to invest in cutting-edge solutions for social problems.

Conexus has since invested in another social impact bond, this one spearheaded by the federal government to help improve literacy, numeracy and computer skills for unemployed adult Canadians. The Essential Skills Social Finance (ESSF) project, a partnership between the federal government and members of Colleges and Institutes Canada, includes private capital from Conexus, the Catherine Donnelly Foun-dation and Dave and Pamela Richardson and Family. This innovative social finance opportunity helps make a meaningful difference in peoples lives by improving their social situation and financial well-be-ing so they will be better prepared to attain and sustain employment, Conexus CEO Eric Dillon said in a media release this past November. It aligns perfectly with our values and priorities and demonstrates concern for community, one of the seven cooperative principles that also guides us.

Conexus now has a board-approved investment policy for social impact bonds, the first of its kind in Canada, which gives it authority to invest set amounts. DeCorby says Conexus can spend one percent of capital cumulatively, or about $4 million, and up to 0.25 percent of capital per investment of $1 million. Anything larger than that would require approval of the

It needs to be something that is very measurable, which can be hard to do sometimes.

J A C Q U E S D E C O R B Y

Innovation Credit Union (50,000 members, $2.3 billion in assets) makes a significant footprint in each of the 22 communities it serves in western Saskatchewan. Like many rural areas, these branches are experiencing less walk-in traffic; Saskatchewanians are just as keen as the rest of Canada to bank online and via smart phone. With its largest advice centres in Swift Current and North Battleford, each populated by around 15,000 people, Innovation was finding it difficult to pull top-skilled technology candidates out of urban centres and convince them to build

careers in these Prairie communities. While other credit unions are folding smaller branches, Innovation, true to its name, found a clever way to keep its advice centres open as well as fill gaps in personnel for customer service and IT support.

Finding IT staff and other skilled professionals is a problem across the country but the need is intensified in rural areas, says Korinne Collins, vice-president of professional development and education for the Canadian Credit Union Association (CCUA). Were competing with employers who offer those very flexible, work-from-home arrangements, says Collins. We cant do that in a branch an environment thats really big on face-to-face interactions.

FILL IN THE GAPS

CREDIT UNIONS IN ISOLATED RURAL AREAS, SUCH AS INNOVATION IN SASKATCHEWAN, ARE COMING UP WITH CREATIVE WAYS TO STAFF SPECIALIZED AREAS OF EXPERTISE, INCLUDING IT AND RISK MANAGEMENT. BY WENDY GOLDSMITH

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Sekou Bermiss, a research fellow at the Wisconsin-based Filene Research Institute, a credit union and consumer-finance think tank, says American credit unions report obstacles in recruiting IT staff because candidates are turned off by outdated technology. If you work for a credit union that doesnt have that level of novelty and advancement, thats less motivating, Bermiss says.

Innovation tried some upside-down thinking to solve its personnel issues, both with urbanite IT staff and with locally rooted member service reps. For the latter, maintaining a local footprint in the community was important, as was serving members well. Members are tending to use MemberDirect our contact centre way more. At some branches, on a quiet day, a dozen people might walk through but we still need to maintain a certain complement of staff for the branch to run safely, says Ian McArthur, chief people and development officer at Innovation.

Innovation Credit Union makes changesTo solve both issues, Innovation decided to reallocate some call volume to the less-busy branches and re-train member service representatives to take calls during idle periods. Its working for two key reasons. Weve been able to provide more availability to people calling in without having to hire additional staff, says McArthur. Secondly, people within the smaller advice centres are very responsive. Employees and members are also happy, McArthur adds, because they know its keeping jobs in their community and their branch open.

To make recruitment easier, Innovation made two more big moves. Four years ago, it opened an administration office in Regina. This allowed the credit union to hire people who fit the skills requirement but who werent interested in relocating. McArthur works here, as do some call-centre, IT, business intelligence and risk management staff as well as some executives. Having a city base means it is easier staffing hard-to-fill evening and weekend shifts at the contact centre, he adds. (Some of these positions are still housed in the main branches at North Battleford and Swift Current.)

Finally, Innovation employs four tech support staff outside the province: one in Strathmore, Alta and three in Vancouver. Our preference is always to have people working

within our communities. But we werent finding the skill set within our traditional footprint, says McArthur.

After the initial trial, Innovation discovered allowing remote-working arrangements was the best way to recruit the top-calibre staff it needed to expand its digital offering. All of these flexible, tech-dependent personnel decisions are good practice for Innovations next proposed move obtaining a federal charter that would allow them to expand their mobile offering to members across Canada. We are just trying to make the workforce as comfortable and as knowledgeable in an omni all-channel environment as we can, McArthur adds.

Job postings used for analysis The centres inaugural project will look at ways to find these mission-focused people. Bermiss notes that job boards like LinkedIn, Monster.com and Indeed.com already provide HR with some important information about attraction, offering stats on click-throughs for online postings. Bermiss hopes to take this information further in a direction credit unions can make practical use of. Wed look at who is attracted to your job posting. When people engage with your brand, what information is most heavily weighted or highlighted? Where do you put certain things on a website, or within an online application? What do you lead with versus what comes second and third? All those things, research says, play into the types of people you are going to attract. So we see if the types of people attracted by different pitches vary.

Bermiss expects to have results ready to present at the centres first colloquia in September.

In Canada, research released by accounting firm KPMG supports the need for HR departments to focus more on people analytics to help a business succeed. This is because technology is disrupting the way businesses interact with customers, says Soula Courlas, partner and national leader, people and change services, KPMG. It is exacerbated by the disintegration of the traditional hierarchy of seniority, as workers are less likely to stay in one company throughout their careers, or even in the same department from quarter to quarter. The machine has sped up, Courlas says from Toronto. Basically, HR needs to

SOME BUSINESSES HAVE STAFF

DON WEARABLE TECHNOLOGY

TO TRACK THEIR

WHEREABOUTS AND BEHAVIOUR

THROUGHOUT THE DAY.

HOW LONG DO THEY SPEND

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support the evolution of the business through all these changing conditions.

Human Capital Management captures dataKPMG recommends that HR can better manage talent assets by observing it through the lens of big data. Where many resource departments used to rely on Human Resource Information Systems (HRIS), which housed basic employee data about payroll, benefits and attendance, companies can now use Human Capital Management (HCM). Cloud-based, this system can hold a lot more data about employees career cycles, from onboarding to retirement, potentially tracking bonuses, compensation increases, promotions, training and more. All this data could help businesses make more accurate predictions about which employees are likely to leave, which are likely to succeed in certain roles and even which recruitment sources have yielded the most productive workers.

Large organizations are even turning some decisions over to artificial intelligence (AI) systems such as IBM Watson, says Silvia Gonzalez-Zamora, financial services consultant for KPMG. Financial services companies can have hundreds of millions of client records. AI systems can screen them to make predictions about customers. They already use it a lot for marketing.

On top of answering employees common HR questions about benefits or time off, IBM Watson could begin to predict productivity based on factors like a new cohort of interns, end-of-the-month report time, or which employees tend to work well together.

ATB Financial, the financial Crown corporation owned by the Province of Alberta, is using a version of IBMs artificial intelligence system, called IBM Kenexa, to make some business decisions. We have teams that are highly successful with customer experience. We know who they are but we dont know why they are successful, states Michelle Beck, vice-president people and culture at ATB Financial, in a promotional video for IBM Kenexa.

Beck explains how this cognitive database looks at details like the age of staff, their tenure as well as previous projects, then correlates this information with customer feedback and account balances, as well as employee engagement surveys. Its a huge amount of

data too much for a handful of HR assistants to wade through. But an artificial intelligence program easily detects patterns that can help make decisions about future teams, development needs and which candidates to recruit initially.

The next step is even more fascinating or worrying, depending upon your view of privacy. Some businesses have staff don wearable technology to track their whereabouts and behaviour throughout the day. How long do they spend checking email, on the phone, or in meetings?

Employees given tracking chips Christopher Stevenson, the senior vice-president and chief learning officer at the Credit Union Executives Society (CUES), points to recent headlines in business publications about a company implanting tracking chips under willing employees skin. The devices replace staff key fobs and cafeteria cards and alert managers to employees locations throughout the workday. Not surprisingly, some employees are excited by the convenience, while others are fearful of privacy infringement.

While Stevenson doesnt necessarily welcome that level of monitoring, he believes it signals where HR is headed. Collecting enormous amounts of data on individuals shouldnt be used in ways that threaten workers personal autonomy, he says, but as aids to improving a businesss collective productivity. People analytics needs to be more about improving the performance of an entire organization than singling out under-performers. Its being used left and right for sales. Well see it applied more to productivity and putting strategies in place to retain high-potential employees.

Credit unions have several talent gaps that are only going to get bigger. Commercial lenders, IT, leaders with change-management skills and mission-focused, relocation-will ing types are urgently needed at many credit unions. The guideposts for arriving at solutions may come from data, purposefully collected and thoughtfully analyzed. While some may view it as an Orwellian example of micromanagement, employee behavioural research will inevitably be as common to personnel decisions as consumer research is to marketing and product development.

BIG DATA AND ARTIFICIAL INTELLIGENCE

AID STAFF ASSESSMENT

Filene Research Institute research fellow Sekou Bermisss students

in HR People Analytics at the University of Texas at Austin are

often surprised by the curriculum. They expect to learn what people

are thinking when they act the way they do. I say, Oh yeah, well talk

about that. But were also going to talk about knowing whether or not something is working well or not, says Bermiss, who is also an assistant professor at UTs

McCombs School of Business. The way you do that is by looking at the

numbers doing analytics.

Bermiss heads the Center of Excellence for War for Talent, one

of seven research hubs Filene launched this past February. Filene

conducts research on behalf of credit unions in all areas but

decided the topic of attracting, retaining and developing staff

was important enough to warrant focused investigation.

After gathering information from credit unions all over the country, Bermiss is getting a handle on the

common gaps in credit union talent management. Its a familiar list

for Canadian credit unionists and includes executives, IT support,

real estate and commercial lenders. Another is mission-centric people.

Recruiters are much more concerned about finding people whose values align with credit unions than with

finding specific skills.


LESS THAN TWO YEARS S INCE ITS CREATION, CCUA, THE CREDIT UNION SYSTEMS

NATIONAL TRADE ASSOCIATION, IS A WORK IN PROGRESS, WITH

MEMBERS DEBATING NUMEROUS I SSUES, FROM BRANDING TO

F INANCING AND MARKETING.

In business, as in the rest of life, its often the small, odd problems that wind up filling our time and defining us. Its that small task mowing the lawn, cleaning off our

desk that somehow overtakes our day.

Take, for example, when work was under way to form the Canadian Credit Union Association (CCUA) as a national trade association two years ago. Back then, the issue of using the words bank or banking to describe credit union activities was not on anyones radar as a problem that CCUA would worry about. The question had been raised in the past but was dormant. The Office of the Superintendent of Financial Institutions (OSFI) had pointed out that legislation restricted use of the terms to federally regulated banks. However, no one was making an issue of it and what else would credit

unions call what they do?

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Michael Leonard, CEO of Atlantic Central, agrees: We believe that the evolution to a national trade association and the consolidation of the government relations functions across the country is the first and necessary step in the evolu-tion of the second tier.More consolida-tion is required but we are encouraged by the progress made by CCUA.

There has been progress on several fronts. The government relations staff at Central 1 in Ontario and British Columbia have been seconded to the CCUA team until the end of this year. SaskCentral has permanently moved

some staff there and CCUA has added a person to handle government relations in the Atlantic region. All are working together with CCUAs team in Ottawa. In terms of numbers, the biggest move-ment has been on the market-ing side. Martin Reed, former head of Central 1s marketing and research department, is

now vice-president of CCUAs marketing division. The 28 staff from Central 1s team are working for CCUA on second-ment this year and will transition to full-time CCUA employees in 2018.

Now, about 18 months into its new life, CCUA finds the issue a warm one that risks getting hot. And its one of many that highlight why an effective national trade association can help to protect credit unions interests.

CCUAs CEO Martha Durdin says that, until last November, the banking issue was dormant but a change of thought at OSFI has put it back on the front burner. We know this issue is important to credit unions, Durdin said during Central 1s Momentum 2017 conference in Vancouver this past April. We dont want to pre-tend were banks but we want to use todays common vernacular and we dont want to confuse customers.

With change and adaptation as the norm across the credit union system today, CCUA will be expected to stickhandle a growing number of issues like this for the collective interests of its members.

Trajectory toward consolidationCCUA was created as a key step to reduce duplication of services provided by several centrals and to improve and increase services, with a focus on four key areas: advocacy and government relations, national regulatory and network compliance, professional development and education and national awareness building. Some, like Stephen Bolton, chair of CCUAs board and CEO of Libro Credit Union (103,000 members, $3.4 billion in assets), based in London. Ont., says he hopes the movement toward consolidation will continue so that eventually there is one national trade association and one national wholesale finance services organization, both owned directly by credit unions. There is a sense of urgency to bring things together and be transformational thats why CCUA was created. But there is always the question of how fast is too fast, or do we go through it quickly and normalize afterwards, Bolton says. Im not sure what the right answer is.

Based on his experience merging opera-tions at Libro, Bolton adds, it takes time to meld cultures and bring teams together.

Branding challengesOne of the major tasks CCUA has under-taken was a national research study into how credit unions are perceived and how they should go about raising their profile and attracting more members. Details of the research were unveiled at CCUAs May conference in Halifax. Durdin notes that the research shows that credit unions face

a branding challenge since there is no consistency in naming or messaging. We need consistent branding that explains what we are, Durdin says. Awareness with non-members is low but there is a lot of potential if we can find it in our hearts to work together.

Not all the research will sit well with credit unions, since it strongly suggests credit unions should use those words in their names and branding and refer to members as members, not owners. Many credit unions large and small dont currently follow either of those suggestions.

Bolton says the research is valuable but notes Libro usually refers to its members as owners and says when hes talking publicly he often refers to owners/members/customers interchange-

ably. Its better to understand the current state of where were at, which the report did, so we can make informed decisions about how to move forward so that the credit union industry is viewed as strong and powerful and not just by our members but by all Canadians.

Suzanne Peters, assistant vice-pres-ident, communications and member relations at CCUA, adds that the research points to tremendous opportunities for individual credit unions and the system as a whole. Over the coming months, CCUA and the National Marketing Advisory Com-mittee will be looking at next steps to take advantage of the knowledge gained.

Potential for cost savings One of the issues lurking not far below the surface in any discussion about CCUA and consolidation at the second tier is cost and the potential for cost savings

MARTIN REED VICE PRESIDENT,

MARKETING & RESEARCH,CCUA

CCUA SHOULD BE ABLE TO FOCUS ON

OFFER ING MORE REASONABLY PR ICED TRADE SERVICES TO

SMALLER CRED IT UN IONS AS THEY

W ILL NOT HAVE THE DEMANDS OF THE

PAYMENTS BUS INESS.- Beth Bruesch


by ending duplication. For its first five years, CCUA is being funded by the cen-trals, as Credit Union Central of Canada was previously, but it will eventually be required to survive on payments directly from credit unions.

In his address to the Halifax con-ference, Bolton mentioned many areas where CCUA is already involved: the banks/banking issue, dealing with OSFI, the effect of federal credit unions, to list just a few. He asked system lead-ers: who would represent their interests if not CCUA? In three and a half years, CCUA will be a voluntary-dues model and as such the CCUAs value needs to be understood, Bolton says. At the CCUA AGM I highlighted what a world without a national trade association might look like.

Beth Bruesch has a unique per-spective on the needs of smaller credit unions and how CCUA can meet them. For several years as CEO of Peterborough Community Credit Union she was leader of a council of small Ontario credit unions. But now shes president of Peter-borough Community Savings, a division of Alterna Savings & Credit Union (134,000 members, $3.8 billion in assets). For smaller credit unions in Ontario, I believe the hope is that some of the trade services that are relied on to keep expenses under controlcan be offered in a more consistent and cost effective way if they are central-ized, Bruesch says. CCUA should be able to focus on offering more reasonably priced trade services to smaller credit unions as they will not have the demands of the payments business. The downside is they wont have the revenue from that business either.

For its 2017 budget, CCUA sought an increase of $1.2 million to cover the costs of the individuals who have already fully transitioned from other centrals. Durdin points out the trade association assessment has been flat for several years. Bruesch mentions one of the main financial hurdles: In my opinion, the challenge for CCUA will be to find a revenue model that will support the

staffing needed to offer additional services.Audit and compliance ser-vices are getting to be a big issue for smaller credit unions that do not have the option for in-house solutions.Every time we turn around there are new regulatory changes and updates that challenge even the largest credit

unions, so smaller credit unions must rely on trade associations for help.

If further consolidation does occur, Bruesch sees a potential danger. I believe the majority of credit unions will continue to be provincially regulated, so CCUA is going to have to closely coordinate with the provincial centrals and regulators to ensure

there is consistent messaging and communication in each jurisdiction.

Bolton adds that we need to find a way that we dont have duplication in the system, because at the end of the day it is paid for by our collective ownership. The 5.5 million credit union members have to pay for these services.

It is clear that, at this stage, there are many wrinkles left to iron out at the CCUA. However, it is also evident that it is being shaped and moulded by a host of dedicated, knowledgeable and thoughtful credit unionists.

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- Martha Durdin


Work Life

Shaken not stirredThe credit union workforce is increasingly becoming an eclectic blend of consultants, contractors and part- and full-time workers.

By Alexandra Samur

Currently, blends are having a moment. Take fros, a blend of frozen ros wine with lemon juice or coconut water, for example, or Unicorn Frappuccino Blended Crme, a garish pink blend of iced coffee and, presumably, regret.

But blends arent just hot in coffee and cocktails blended is the new buzzword in human resources as well.

The blended workforce is character-ized by staffing that combines full- and part-time employees, consultants and contractors all working together. Recent increases to this blend within the Canadian workforce have largely resulted from the growth of a digital economy, which has seen a rise in short-term, on-demand gigs, as opposed to lifelong jobs.

These increases are significant; a recent report by The Mowat Centre, a University of Toronto public policy think tank, indicates that 13 percent of Cana-das workforce in 2016 was made up of temporary workers and 19 percent of part-time workers each representing a 57 percent increase from prior benchmarks. Other studies by Intuit and the Freelancers

Union envision a not-too-distant future where at least40 percent of the workforce is made up of freelancers.

HR professionals from Canadas two largest credit unions, Vancouver City Savings Credit Union (471,000

members, $21 billion in assets) and Coast Capital Savings Credit Union (543,000 members, $15 billion in assets), recognize that, just as technology is evolving, so too is the makeup of their workforce. I see the blended workforce as presenting a really unique opportunity for both credit unions and for individuals, says Tracey Arnish, chief people officer at Coast Capital.

Arnish identifies increased need for specialized roles such as data scientists, data and analytics analysts and project and program managers in Coast Capitals operations. But the individuals who have these skills are in such high demand they can dictate their terms and conditions of employment such as when, where and how they want to work. And while Arnish needs these individuals expertise on discrete projects, she doesnt always require them on a permanent basis, making an alternate arrangement attractive to both parties. Moreover, Arnish sees that the desire for flexible work schedules is growing not only for millennials but for workers of all generations.

Similarly, at Vancity, consultants or contractors are generally brought in to fill

specialized skills that are often technology related. What weve noticed with the rise of digital solutions is there will be a need to have that ever-changing skillset, says Jason Wong, a director of people support at Vancity.

When special projects come up, inter-nal talent is considered first before looking to contractors; at Vancity, more than 90 percent of the 2,600 staff occupy full-time permanent positions. Experimenting with knowledge transfer having employees work with and learn alongside contractors is one way Vancity has tried to build skills internally.

Laurie Smith paints a different picture of the blended workforces shes seen at the smaller and mid-sized credit unions (those with staff numbering from eight to 120), where she consults. A Regina-based human resources consultant with Central 1 Credit Union, Smith often works with credit unions that use contractors outside of the technology field. For example, contractors may be called in to credit unions based in small communities because those branches cant attract the talent they need, or simply cant afford to have a full-time employee in a specialized area of employment. Human resources, marketing, finance and manage-ment are among the areas where these credit unions might rely on external contractors.

Regardless of the reason, it increasingly appears the gig economy is here to stay, requiring very different leadership skills to manage an increasingly diverse workforce. It challenges leaders to ensure were getting the engagement and the productivity out of these differently structured teams, Arnish says.

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Marketing Matters

What comes next? Its the peren-nial question as credit unions seek to ride the youth banking wave. That means appealing to a new generation that appreciates convenience and has little patience for banking fees.

A survey released this past February by the Canadian Prepaid Providers Organiza-tion (CPPO) found that younger Canadians in particular are interested in payment tools that they view as more convenient and secure. Prepaid cards topped the list as the fastest-growing payment product and boasted the highest level of satisfac-tion among payments tools, CPPO co-founder and chair David Eason said in a media release.

Desjardins Group (seven million members, $260.7 billion in assets) has embraced the pre-paid card as one piece in a wide-ranging basket of products aimed at attracting youth members. That package of youth-focused products respects tradition while looking to the future. With each youth initiative, were aiming to provide services that these members need at this time of their lives, says Des-jardins spokesperson Andr Chapleau. That means coming up with innovative products, while always knowing that our mission is to help and to educate.

Chapleau outlined a few current initiatives aimed specifically at youth.

Prepaid convenienceDesjardins is paying heed to millennials affinity for innovative online financial services such as prepaid cards.

By Sarah Brown

Sell what they wantWhen Desjardins began offering prepaid cards four years ago, the caisse was surprised by the positive reaction among youth. In retrospect, the findings of the CPPO survey make sense; young Canadians love convenience and the prepaid card is a perfect payment tool for someone in school or who is new to the job market. Because a card has to be loaded up, it allows users to better manage tight budgets and control

overspending, while having the benefits of being linked to the Visa network so it can be used virtually anywhere. What makes the card even more irresistible to youth? Desjardins offers a no-fee option for mem-bers aged 16 to 25. Because they have to be a member of the caisse to get the card, it also encourages younger consumers to become clients. A Youth Profit Account further inspires them to sign on by offering 40 free transactions a month, taking away the incentive to go to online banks.

Hang out togetherTheir 360d campus service centres look more like plugged-in coffee shops than typical credit union branches. Launched in 2014, Desjardins targeted service centres (there are four) are located near universi-ties. They are designed to be welcoming spaces that encourage students to stop in, have a coffee, study and chat with friends. They are also staffed with advisers who can answer questions about student loans, scholarships, or perhaps the financing of a post-university holiday. Its definitely a very different environment with comfy sofas and lots of information screens and tablets, says Chapleau. Because that coffee shop-type environment is one that younger people feel comfortable visiting, they will be more likely to solicit person-alized guidance rather than opting for anonymous online banking services.

Get youth inputIts no coincidence that Desjardins top execu-tive Guy Cormier the youngest president and CEO in its history has committed to better understanding young peoples banking needs. This means giving them a voice at the table. Exactly a year into his mandate, Cormier announced this past March the creation of a Youth Advisory Board made up of 12

members aged 18 to 35. Consisting of four directors, four employees and four caisse members, the group is tasked with connecting Desjardins board members with the needs of the caisses youth members. They dont tell the board and management committees what to do but theyll be crucial in telling them if their policies aim in the right direction, says Chapleau. Theyll also be in tune with things like mobile services and knowing how best to support young innovators.

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Shortcut

The credit union system was an important part of Canadas growth as a nation.

By Roberta Staley

On July 1, Canada celebrates 150 years of confederation. Our nations financial sector pre-dates the creation of Canada itself, start-ing in 1792, when nine

Montreal merchants formed the Canada Banking Company, an enterprise that quickly failed, since it couldnt issue bank notes, states The Canadian Encyclopedia.

With the creation of Canada in 1867, the federal

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government began issuing bank charters. By 1886 there were 38 banks. But radical ideas were being formulated. Four-teen years later, House of Com-mons clerk Alphonse Desjardins and supporters opened Caisse dpargne Desjardins in Lvis, Que. In 1908, Ontario saw the creation of the Civil Service Savings and Loan Society.

Desjardins lobbied to have the House of Commons pass legislation supporting the creation of credit unions, which

would have made them fed-erally regulated. However, the Senate rejected the bill by one vote in 1908.

It took the Great Depression of the 1930s, as unem-ployment soared and wheat prices collapsed, for financial cooperatives to gain a foothold across the country. Credit unions, nurturing the concept that community wealth should be circulated to support local economic development, sprang up in the Maritimes, British

Columbia and, finally, the Prairies. Since then, the credit union

system has been an innovator in many areas of finance, being the first to lend to women in their own names, offer registered education plans, full-service ATMs, daily interest accounts, open mortgages and equity lines of credit, online cheque imaging, branchless banking, among many other conveniences, according to Interior Savings Credit Union (70,000 members and $2.45 billion in assets.)

Its Canadas 150TH birthday!

SOURCE: CO-OPERATION CONFLICT AND CONSENSUS - B.C. CENTRAL AND THE CREDIT UNION MOVEMENT TO 1994 BY IAN MACPHERSON

1932 THE POWERFUL ANTIGONISH SOCIAL MOVEMENT, STARTED BY TWO PRIESTS: MOSES COADY AND JIMMY TOMPKINS, CREATES ITS FIRST CREDIT UNION IN BROAD COVE, NS.

1900 ALPHONSE DESJARDINS HELPS FOUND CAISSE POPULAIRE DE LVIS.

1864 THE FARMERS BANK OF RUSTICO ON PRINCE EDWARD ISLAND INCORPORATES WITH THE INITIAL CAPITAL OF 1,200.

1941 SASKATCHEWAN CREDIT UNIONS CREATE A CENTRAL BANK, THE SASKATCHEWAN CO-OPERATIVE CREDIT SOCIETY, TO SPREAD RISKS BETWEEN RURAL AND URBAN CREDIT UNIONS. SYSTEMS IN NOVA SCOTIA AND BRITISH COLUMBIA FOLLOW SUIT.

1953 THE SASKATCHEWAN MOVEMENT CREATES A RESERVE FUND CALLED THE MUTUAL AID FUND, A MODEL FOR THE REST OF ENGLISH CANADA.

1969 BCS ABBOTSFORD CREDIT UNION ASSISTANT GENERAL MANAGER GLEN HADDRELL CHAMPIONS THE NATIONAL CO-OP HOUSING MOVEMENT.

1994 MANY CREDIT UNIONS HAVE DEVELOPED INTO FULL-SERVICE, ONE-STOP FINANCIAL INSTITUTIONS, OFFERING INSURANCE AND FINANCIAL PLANNING (INCLUDING MUTUAL FUNDS) AND BROKERAGE SERVICES.

1987 BC CREDIT UNIONS ADOPT THE NATIONWIDE INTERAC NETWORK OF ATMS, SUBSEQUENTLY CREATING THE MEMBER CARD, WHICH WAS SHARED WITH CREDIT UNIONS ACROSS CANADA AS THEY PREPARE FOR ELECTRONIC PAYMENT AT THE POINT OF SALE.

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