SASKATOON – People across Canada could soon be able to put their money into the country’s largest credit union, without leaving their house.
Vancouver City Savings Credit Union, more commonly known as Vancity, has applied for federal approval to set up Canada’s first nation-wide branchless bank.
Vancity wants to convert its existing trust company, Citizens Trust, into Citizens Bank of Canada. It would open for business in January 1997, with customers doing all their banking using telephones, computers, or automated teller machines. The only building would be the head office in Vancouver.
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It plans to offer a full range of services, including term deposits and mortgage lending. However, an official said no decision has been made whether the bank will get involved in agricultural lending.
“That’s a good question,” said spokesperson Eli Sopow. “Between now and January there are a number of policy things to be looked at. All things at this point are under consideration.”
B.C. presence
Vancity has just under $5 billion in assets, with 32 branches and 226,000 members in the Greater Vancouver and Fraser Valley regions of British Columbia.
Vancity decided to offer its new service as a federally regulated bank since credit unions in each province must operate through the region’s credit union central in out-of-province dealings.
However, Sopow said the Citizens Bank will operate according to the principles espoused by the credit union movement.
“It is very much going to be pursuing the corporate culture of Vancity Savings Credit Union, which is very, very big on social responsibility and putting money back into the community,” he said.
Credit Union not worried
Sid Bildfell, chief executive officer of Saskatchewan’s Credit Union Central, said he’s not worried at the prospect of the province’s credit unions having to compete with the new credit union owned Citizens Bank.
The days are long gone that local credit unions just competed with the bank across the street, he said. With the new technology in financial services, the competition is all over the world.
“If they’re a good, strong competitor, I guess that’s good from the consumers’ perspective,” he said.
Bildfell said the idea of branchless banking is taking hold and credit unions in Saskatchewan and across the Prairies may soon provide the same kinds of services that will be offered by Citizens Bank.
“Certainly we’re looking at a number of initiatives that would include allowing our members access to their accounts at remote locations, including personal computers,” he said, although he emphasized that doesn’t mean the credit union movement has any intention of closing down local branches on a widespread basis.
