FCNQ studies the possibility of a regional credit union

ODILE NELSON

KANGIRSUALUJJUAQ – Nunavik’s co-op federation is forging ahead with its dream of bringing full banking services to the region’s 14 communities.

Though the Fédération des coopératives du Nouveau-Québec’s idea of offering a credit union in Nunavik is not new, it has only recently taken the concrete step of conducting a feasibility study on the venture.

“There is a growing need for banking services in the North,” said Rob Collins, general manager of the FCNQ. “We already offer many banking services. We’re paying for the administration already and we’d like to take it further.”

The main purpose of the feasibility study is to see how viable a banking business would be in Northern Quebec. It will measure the demand and whether it is enough to offer services.

The study also involves speaking with both regional and municipal institutions to see if they would open accounts, taking stock of existing facilities and infrastructure and the cost of any necessary upgrades, and developing different strategies for phasing in banking services.

Collins said the venture is potentially risky but the time is right to study the possibility.

“Banking is an expensive administrative process and we believe it could work if all administrative bodies co-operate. The North is too small to fragment resources but by pooling them we could achieve things together that we never could alone,” he said.

Nunavimmiut currently use their local co-ops or Northern stores to conduct basic transactions, Collins said.

“The co-ops already provide basic services to members. You can cash cheques, you can have cheques written for you, you can have a deposit account – its not a savings account but you can keep a credit balance – and you can keep a credit margin. We also offer a loans program for big items like computers or ski-doos where the borrower makes monthly payments.”

But these are all limited services, Collins said. Any Nunavik credit union or caisse populaire would improve on existing services, he added. It would ideally offer savings and chequing accounts, credit cards, interest-bearing accounts, RRSPs, personal lines of credit and home-ownership loans.

Collins said the study is not prompted by concerns that big, Southern banks may begin offering services in the region.

The Canadian Imperial Bank of Commerce still has only one branch in Kuujjuaq, he said.

“I doubt whether more banks will move up North. It makes no sense. They won’t get enough business. It’s much more service driven and that’s what co-ops do.”

Paulusi Novalinga, mayor of Puvirnituq, greeted the news with a mix of enthusiasm and skepticism. Both the FCNQ and the Kativik Regional Government have previously expressed interest in the idea, he said, but nothing has come out of it over the years.

Still, he said, banking services are needed.

“It’s a very good idea – especially for smaller communities that have no contact with larger banks,” he said. “A credit union would help people purchase an expensive item and if they need a loan this is a good thing.”

The Caisse d’économie Desjardins des Travailleurs et Travailleuses, the FCNQ’s own credit union, is co-conducting the feasibility study. The Caisse populaire Desjardins is also concurrently performing its own study.

Any future credit union would at first likely operate out of existing co-op stores and the local co-op’s board of directors would probably administer the services, Collins said. But eventually the FCNQ hopes to offer full, separate banking services.

“It would be a fully functioning bank in its own right,” he said.

Even if the feasibility study is favourable, Collins said, it would be a few years before services are gradually introduced.

But though any Nunavik credit union may still be years away, the possibility already factors into many of the fédération’s decisions.

“When we build new stores now we consider the likelihood [that we will need space for separate banking services],” he said. “It’s in our physical planning.”

Collins could not say when the study would be completed.