Quebec credit union eyes Nunavut

GREG YOUNGER-LEWIS

Nunavut residents left behind after the Bank of Montreal’s decision to leave the territory might find a new friend in Canada’s largest credit union.

The Fédération des Caisses Desjardins, a multi-billion-dollar credit union group based in Montreal, confirmed this week that they are considering Nunavut for potential expansion.

A former Bank of Montreal employee in Iqaluit said the branch had up to 6,000 clients, and turned a profit every year for the past 11 years. That means a new bank or credit union could potentially pick up a lot of customers who don’t want to go to the remaining two banks in Iqaluit, CIBC and the Royal. André Cajolais, a spokesman for Desjardins, said Quebec’s colossal credit union will research the possibility of replacing the BMO, but wouldn’t promise more. “It’s not a ‘yes’,” Cajolais said in French, when asked if the credit union will move to Nunavut. “It’s a ‘let’s look at it’.”

“Desjardins will study the situation very seriously to see if there’s a partnership to be had. There are a lot of possibilities.”

Desjardins’ interest in Nunavut bodes well for the northern credit union movement, bolstered by recent calls for a banking alternative in the territory, from sources such as Nunavut Tunngavik Inc. and Iqaluit Centre MLA Hunter Tootoo.

Even though Desjardins carries $100 billion in assets and serves five million members, they admit they will need help.

Cajolais said Desjardins’ designated employees for dealing with aboriginal communities will soon start phoning around to find out who might join forces with them to form a Nunavut credit union.

He said Desjardins would look to partner with another bank, credit union or government to offset the unique costs of setting up in Nunavut.

Among other expenses, a new credit union would have to deal with the territory’s dependence on satellite communication, used in various credit card and debit card transactions.

Cajolais declined to estimate how many years it would take to create a new credit union, if Desjardins decided to set up a branch in Nunavut.

“In the short term, it will take a bit of time,” he said.

Desjardins already explored the possibility of helping start up a credit union in Nunavut, according to a recent study by Arctic Co-operatives Ltd. In the late 1990s, Desjardins teamed up with ACL and Citizens Bank to try a pilot project in Pond Inlet, but their plan fell apart when the bank backed out, citing “internal issues”.

The ACL report, dated May 2004, also notes that Desjardins was due to release a feasibility study this summer about setting up a credit union in Nunavik.

The ACL report says a large southern credit union or bank will be essential to setting up a Nunavut credit union. Under the ACL plan, a large institution like Desjardins would be the link to accessing global financial networks. ACL says the credit union would also need its co-ops to serve as a point of service, and the government of Nunavut to take an active role in supervising and regulating the operation.

If Desjardins renews its intentions of setting up a credit union in Nunavut, Cajolais said Nunavummiut can expect better service than they find at their banks.

“The member of a credit union is the user and owner of the credit union,” Cajolais said. “That is very different than the perspective of a bank.”