Guest Blog: Saving Island Savings

By Don Skerick

I urge all Island Savings Credit Union members to carefully consider their proposed merger vote with First West Credit Union, and join me in voting NO so we can keep Island Savings local. The purpose of Credit Unions is to keep and put community money in the local community.

My main concern is losing local control of our Credit Union. We will no longer have a main office and decisions will be made at First West’s head office in Langley. At the present time we have 100% representation on the Board of Directors. Under the new structure we will have 3 directors on a board of 15 for 2 years, which means we only have 20% representation. After two years then Board representation is based on total membership and assets. There isn’t any explanation what that means. It also says Island Savings will have some level of representation on the First West’s Board. What does that mean, possibly one representative? How is that good for individual members?

If this proposed merger passes, our money could be used to leverage larger projects in other parts of the Province. The main purpose of the proposed merger is to leverage larger loans for businesses. How does that help the individual member?  Island Savings members’ intent is to have their deposits available to other members of our community. The leveraging of larger loans doesn’t mean the loans will be available for local projects. We will now be in competition with other regions who could be using our money to leverage large projects in other regions. I suggest that big is not always better.

I believe the Board of Directors has not proven the need for the proposed merger.

Island Savings members recently received an information package outlining the Board’s rationale for the proposed merger.   The first point is that personal members will get access to First West’s Simply Free account. If that is important to members, then can’t Island Savings provide it without giving up control of our Credit Union to other regions of BC?

The next point is that profitability will grow due to increased scale, efficiency and cost sharing. The case for change doesn’t explain how this is to be done. If there are not going to be any layoffs as a DIRECT result of this partnership. Where does the efficiency come from? Does “there are not going to be any layoffs as a DIRECT result of this partnership”, mean that the layoffs will come later and that is where the efficiency comes from? What about cost sharing, there is nothing to show how this is going to be done. We are just asked to “trust us” and vote in favour.

A further point used to rationalize the proposed merger is the increase in financial assets based on pro-forma financials. When I read the fine print at the bottom it says “external variables such as market rates, inflation, and other economic factors outside of management’s control may have positive or negative impacts on actual results. To me this says the business case projections don’t carry a lot of weight, yet this is the strongest business case the Board can make when they ask us members to vote in favour of this proposal.

In the documentation I received, regarding the proposal, there is a sentence that says “The proposed Asset Transfer Agreement was approved by a “clear majority”. To me this says some members of the Board were not in favour of the proposal. Why have we not heard what their concerns are?

I will not be voting in favour of this proposal and I ask that all Island Savings members come to the aid of their Credit Union and vote NO.

Don Skerik is a business owner based in the Cowichan Valley who has been a member of Island Savings Credit Union for 15 years