A member of the Squamish Credit Union (SCU) board of directors believes SCU members aren't getting all the key information on a proposed merger with Vancouver City Savings Credit Union (Vancity).
Mike Suter has voted against the merger at the board level, citing a lack of detail and a number of uncertainties. He's the only SCU board member on the nine-person board opposed to the deal.
Suter said he believes SCU is giving away $3.5 million in retained earnings, two insurance companies and the Downtown head office building. He said SCU members are not getting enough out of the deal.
"I just want the members to know what is going on," said Suter.
Tom Casey, the chair of the SCU board of directors, doesn't agree.Bill Brumpton, the SCU general manager, said SCU could survive in the future without the merger, but he said the deal will allow SCU to thrive instead of just survive.
After the merger, SCU will not exist in a legal sense. It will operate as a mostly autonomous Vancity partner.
Vancity has 310,000 members and $10 billion in assets while SCU has 3,500 members and $63 million in assets.
The sides are entering unknown territory, Brumpton said this week.
The accounting firm Smythe Ratcliffe reviewed a number of documents associated with the proposed merger and concluded Vancity is in fact acquiring SCU.
"What happens after the merger is we are given back authority to run ourselves," said Brumpton.
Documents about the merger produced by Vancity and SCU indicate the partnership allows SCU to become big while remaining small.
"We think this approach combines the best of both worlds - the resources of a large institution delivered within the neighbourliness of a local credit union," said Vancity CEO Dave Mowat. "We think this partnership will be a win-win for both organizations' members, employees and communities."
Smythe Ratcliffe determined the growth model proposed is untried and undocumented. The accounting firm warned the SCU board of directors there is a risk it will ultimately be unworkable.
Brumpton told The Chief that the SCU board is relying to a certain extent on Vancity's goodwill. He noted, Vancity has a good reputation.
According to Brumpton, the main reason for the merger is to offer more services for SCU members. Currently, SCU offers very little in the way of small business loans. The SCU is also challenged when it comes to offering mortgages for those purchasing higher end homes in Squamish.
"This merger will give us a much greater opportunity in that marketplace," said Brumpton.
SCU exists in a more competitive banking sector since the arrival of a North Shore Credit Union branch at Garibaldi Village. TD Canada Trust is building a branch at Squamish Station Mall with the first local drive-through automated teller.
Members of the Credit Union have an opportunity to speak with the architects of the deal at an information open house slated for Sept. 14 at the Sea to Sky Hotel. Brumpton said credit union members will be able to speak one-on-one with people from Vancity and SCU at the meeting.
A special meeting of the SCU membership is scheduled for Sept. 28, also at the Sea to Sky Hotel, so the membership can vote on the proposed merger. Brumpton said there will be a question and answer session at the special meeting.
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