To the editor,
I am writing to express my concerns regarding the proposed merger between Copperfin Credit Union and Northern Credit Union. As a member of Copperfin, I strongly believe that this merger is not in the best interest of our Copperfin credit union and its members. It will lead to less competiton, and be a net-negative for northwestern Ontario in the long-run. Here are some key facts that highlight why Copperfin members should vote NO on this merger:
Copperfin is a Healthy Credit Union: Northern approached Copperfin about a merger – not the other way around; and with reason. Copperfin Credit Union is undeniably a better-run institution compared to Northern Credit Union. With assets totaling $562 million for 18,076 members, Copperfin boasts an impressive $31,090.94 in deposits per member.
In contrast, Northern Credit Union has $1.8 billion in assets for 70,373 members, translating to only approximately $25,577.99 per member. This significant difference in deposit per member indicates that Copperfin is more financially stable and efficient in managing its resources. (reference) Furthermore, when it comes to operational efficiency, Copperfin outshines Northern Credit Union. Copperfin also has a lower overhead with one location for every 3,615 members, whereas Northern operates with one location for every 2,814 members. This disparity suggests that Copperfin is able to provide personalized service and attention to its members due to its more streamlined operations.
Copperfin already has Competitive Rates and a Local Focus: The major selling point of the merger is that it would lead to better rates. However, Copperfin already matches or outperforms the much larger Northern Credit Union on most rates. For example, a 3-year high ratio mortgage at Copperfin is only 5.25%; at Northern, the same mortgage is offered at 5.49% whereas RBC is 5.55%. They are tied on some products such as the 5-year fixed-rate and there are some cases where Northern has a slight edge over Copperfin; however differences are largely negligible.
Copperfin’s lending practices have been marketed as being responsive to the local business community – with decisions made locally. On the other hand, Northern Credit Union follows a bureaucratic and centralized approach where all decisions are made at its headquarters in Sault Ste Marie and call centers near Petawawa. If this merger follows other credit unions which merged with Northern, this will mean no major decisions will be made in Northwestern Ontario.
Most Importantly, this merger will mean Less Competition - which will have major long-run effects. It is a well-known fact: the more competition, the better the consumer. The less (such as in telecommunications in Canada with only mega Rogers and Bell companies competing) the less satisfied our customers. The Canadian banking sector is one of very little competition: 93% of all transactions in Canada are done by the major “big six” banks; a stark contrast to the US where the largest single banks, Wells Fargo and Bank of America, control just 9% each.
Alternatives to the “big six” banks in Canada include a range of small banks and a collection of credit unions. Northern is one of Ontario’s largest credit unions by membership. Much of its growth has been through the acquisition of smaller credit unions; should the Copperfin merger proceed, Northern would in effect be one of Ontario’s largest 6 by membership.
With only one other locally owned credit union operating in the region, consumers will have far more limited choices when it comes to financial services and products. This reduced competition would lead to decreased service quality because of decreased pressure to compete.
In conclusion, the merger between Copperfin Credit Union and Northern Credit Union poses risks to the superior services and financial stability that Copperfin currently provides its members. Therefore, I urge my fellow Copperfin members to vote NO on this merger during the voting period until June 16th.
Andrew Ault is PhD Candidate in Finance at Carleton University, Financial Controller at Maamwesying Health, and Lecturer of Business Administration at Lakehead University. He is a member of Copperfin Credit Union and former member of Northern Credit Union.
