With a broad range of banking options available a short walk or drive away, or at their fingertips online, it’s easy for city dwellers to take the availability of financial services for granted. But what happens if you live in a small community and your only financial institution decides to pack up and leave?
Such was the case in 2014 when Coastal Community Credit Union crunched numbers and realized that its operation in Alert Bay on Cormorant Island, just off the coast of Vancouver Island, was not worth operating.
The community of about 1,000 people had to adjust to life without a financial institution for almost a year, until Vancity opened a branch, after Coastal Community departed in June 2014.
“We thought, ‘What do we do now?’” said Kelly Speck, a councillor with the ‘Namgis First Nation, which has about 550 people on the island.
The closest financial institution was a Coastal Community branch in Port McNeill, which is a 40-minute ferry ride away. Round trips to Port McNeill took about three hours if people were lucky enough to finish their banking in time to catch the next ferry. If they missed that, the whole trip would take about five hours, Speck said.
Instead of simply giving up, Speck helped form a committee, which also had representatives from the Village of Alert Bay, in an effort to lure a new financial institution.
It hired financial consultants at Headwater Equity Partners and put together sales pitches to different financial institutions with pleas to open a branch in the community.
The committee also took a confidential survey of people on the island to determine how much money islanders had and what banking services they wanted.
One of the sticking points that made Coastal Community’s operation expensive was that regular shipments of cash had to come in secure trucks from Victoria. The presumption was that there were some businesses on the island that were not depositing cash at the Coastal Community branch and instead took those dollars off the island, Speck said.
Her committee helped get agreement from the island’s business community to deposit money in a new financial institution and then have it transferred to another institution, if necessary, by electronic means.
That way the physical dollars stayed on Cormorant Island.
That agreement was one of the things the community brought about to give Vancity confidence that its new branch would be viable.
The Village of Alert Bay and the ‘Namgis First Nation also promised to carry out all their financial transactions through the branch. Public filings show that annual ‘Namgis program spending and salaries amount to about $12 million.
In the time since Vancity opened its branch in May 2015, it has had to order only three of those expensive cash deliveries. That’s fewer than was the case when Coastal Community operated, Speck said.
Another indication of success is that the branch has more than 560 members.
“One of the things that happens when a banking institution leaves is that people start making other arrangements,” she said. “So our goal in the first year was to achieve at least 500 members.”
The Vancity branch is open three days per week, the same frequency as the former Coastal Community location.
The branch has yet to turn a profit but that does not faze Vancity’s manager of indigenous partnerships, Stewart Anderson.
“It’s the first year of operations,” Anderson said. “It generally takes a number of years before an individual branch would be deemed profitable.”
“To become profitable, you don’t always have to do things the way you’ve always done them,” he added. “For us, it’s a matter of looking at how to deliver what the community wants in a cost-effective way and figuring out the right balance so that we have a sustainable model.”
Leaders in other communities have urged Vancity to open branches in their towns, but Anderson said his credit union wants to wait and see whether the Cormorant Island experiment is successful before expanding to other places. •
(The original version of this story incorrectly noted that Coast Capital Savings Credit Union had pulled out of Alert Bay, not Coastal Community Credit Union.)
