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North Shore Credit Union merger on track Three-way merger is now a duet By Chris Woodall North Shore Credit Union's plans to merge with two other Lower Mainland credit unions has shifted to a merger with just one. The merger with Fraser Valley Credit Union is a first for Canadian credit unions, says North Shore CEO Jane Milner. "This will be the first time two credit unions merge as equals," she says. Mergers between financial institutions are not new, of course, but previous mergers have come about when the provincial regulator of financial institutions has forced the issue: a small, struggling institution combining with a larger entity. But in this case, North Shore and Fraser Valley are of about equal size in assets and membership. The merger will push total assets above $1.3 billion and will result in a combined membership of about 80,000. "That puts us up with the top credit unions," Milner says. Credit union account holders are "members" of that financial institution in that they each have bought at least one share in the corporation. Members in effect "own" the credit union and are called on to cast votes for the credit union's board of directors. Bank account holders have no such luck. Whistler's credit union members, for example, will have a chance to vote on the merger proposal when it is completed, expected to be sometime in March with a vote scheduled by mid-April. British Columbia's largest credit unions are the biggest in Canada for asset and membership size. But whether large or small, credit unions tend to be the main financial institution for many B.C. communities. The Whistler branch of North Shore Credit Union, for example, was the first "permanent" financial institution in town. A temporary bank set up in a trailer in the 1970s was shut down after someone hooked the trailer to their vehicle and made off with all the assets. The original merger plan was to include the Delta Credit Union, but as talks progressed, Delta backed out because it felt its corporate culture was different than the other two partners, Milner says. The door isn't entirely closed to, or by, Delta. It may join with the new credit union at some future date, North Shore's CEO says. It's that concern that there be several "fits" that drives the merger. "There's no market overlap, so we won't have that awful, painful process of rationalizing (closing) branches," Milner says. That might have been the case if Delta Credit Union stayed in the merger talks. North Shore opens its 10th branch in February. Credit union names often describe the territory they serve. North Shore's branches are, for example, along the North Shore of the greater Vancouver area. Fraser Valley has nine branches, stretching — as the name implies — along the Fraser River valley east from Vancouver. North Shore's Whistler branch is a unique situation because it was created by the nearest and largest credit union able to make it so. Squamish Credit Union — usually the natural choice — wasn't financially strong enough at the time to do it. Other "fits" between the merging credit unions were revealed during an exhaustive process over the autumn to look into every aspect of each other's business, Milner says. "We looked at all the strengths and weaknesses of all our departments and our finances. Nothing evolved to interfere with the merger process." Part of the examination was for the boards of directors to meet each other. "There was a little bit of a courtship dance that went on to get to know each other's board members, to ask ourselves: 'do we like these people?'," Milner explains. The main impetus to have the merger is to create economies of scale for both credit unions to purchase new technologies that will offer improved services for credit union members, Milner says. "We won't have to make separate investments in equipment." How the credit unions' members feel about all this is an important consideration, Milner says. Telephone surveys reached 150 members and there were three focus groups of members to explore their expectations and concerns, Milner says. "Members say they identify with branch staff, so if the merger meant losing jobs, members indicated they wouldn't vote for it," Milner says. "Members also want to maintain the same level of services and prices." One thing that will probably change is the name of the new entity. The B.C. credit union act says you can't use the same credit union name more than once, Milner says. More member research will help determine what the moniker will be. Although a recent trend has seen a few credit unions change their names to something other than "credit union" — as Surrey Metro Savings did a few years ago — Milner likes the original format. "I prefer 'credit union'," the North Shore CEO says. "We wouldn't want 'North Shore Financial,' because the acronym would be 'NSF'," jokes Milner. More information about the merger will become available to credit union members every couple of weeks in a flyer called "Merger Talks."

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