Online banking, low profits cited for closure of historic credit union

The chair of the East Coast Credit Union says low profits and changes in how people bank is behind the closure of the Margaree, N.S., branch, which was once at the forefront of the credit union movement in Atlantic Canada.

The Margaree Credit Union's last day of operation is Friday, and the branch will be consolidated with a location in Inverness, 35 kilometres away.

"The branch hasn't been profitable, and maybe more importantly, the advent of applications and online payment, we were seeing a real decline in branch activity," said Mary Oxner.

Members of the Margaree Credit Union, which was started in 1936, were notified around three months ago it would be closing. The move sparked the creation of the Save Our Credit Union committee, which proposed relocating the branch to nearby Margaree Forks.

Less need for physical locations

However, Oxner said the proposal was more of an idea than a business plan. She said there are a lot of factors that would need to be looked at, including the demographics of the area.

"We'd have to do a really thorough investigation of a branch and that requires a full financial assessment," she said. "There's a lot of regulation around credit unions, around banking services."

Oxner said five years ago they had looked at putting a branch in the Margaree Co-op but the co-op was not interested at the time. Since then, the need for a physical location in the area has changed.

"The decision was not made lightly," she said.

Brian Peters, chair of the Save our Credit Union committee, said the decision didn't come as a shock.

"I have to say that I'm disappointed. I thought that we had offered a much better alternative to just abandoning Margaree," he said. "However, I'm not surprised."

He believes the decision had been made before the board communicated with community members.

"They seemed to not be open to some, you know, interesting and appropriate alternatives to simply closing our credit union and leaving our community."

The credit union board has offered to place ATMs and other services in the area, but Oxner said so far those offers have not received a positive response.

In the meantime, the committee said it aims to find another financial institution that will come to the community.