Following a lopsided membership vote, credit union Coast Capital Savings has announced it intends to spend next year seeking regulatory approval to operate across the country and plans to offer its brand of banking services beyond B.C.’s borders in 2018.
Chief executive Don Coulter said the push for becoming a federal credit union came from its membership.
“We had outreach from our members asking if we could offer our services outside B.C. We found there was quite a bit of interest,” he said.
Coulter said members, and business clients in particular, have been asking about it for the last 10 years.
“Business members are growing and getting to be successful and winning contracts in other provinces. And as the regulations stand right now, we can’t conduct business in other provinces,” he said.
The chance to seek regulatory approval to set up shop outside of B.C. came in 2012, when the federal government introduced legislation allowing credit unions to operate outside their provincial boundaries by acting as a federal credit union.
The first credit union to take advantage of the opportunity was New Brunswick’s UNI, which did so this year.
Coast Capital expects to be the first credit union in B.C. to start the process.
In 2014, Vancity Credit Union declared it would not grow beyond B.C., and in the wake of Coast Capital’s decision it has decided to stand by its decision.
“As a member-owned financial co-operative, Vancity is both B.C.-based and B.C.-focused, and we will continue on that path,” said Tamara Vrooman, chief executive of Vancity.
“From a national perspective, we have been doing business across the country for close to 20 years through Citizens Bank, a nationally chartered bank that has been our wholly-owned subsidiary since 1997.”
Island Savings, now a wholly owned subsidiary of First West Credit Union, could not be reached for comment Thursday.
Coulter said being a federal credit union will benefit members and the company as it will enter new markets, attract new members, and better manage risk through diversification.
He also suggested employees will have new job opportunities as a result.
“We will be able to serve our existing members in a better way, especially those who have a need to do banking in other parts of the country,” he said.
Nearly 80,000 of Coast Capital’s 540,000 members voted over a six-week period, with 79.2 per cent in favour.
Coulter said getting regulatory approval from the Credit Union Deposit Insurance Corporation, Financial Institutions Commission, Office of the Superintendent of Financial Institutions and federal minister of finance will likely take a year, and he hopes to see Coast Capital Savings as a federal credit union in 2018.
He said at this point, the credit union doesn’t know where it is likely to set up shop outside of B.C.
“The plan is to do more digital banking, offer more services online. Then we will look at branch expansion,” he said.