Eleven of the twelve Caisses Populaires in Ontario, plus their provincial federation, move forward with amalgamation | General financial discussion | Discussion forum

In news that will likely bring a smile to AltaRed's face, eleven of the twelve Ontario caisses populaires and their provincial federation voted at a individual general meetings of the caisses in late November 2018 to amalgamate to form Caisse Desjardins Ontario Credit Union, Inc., on January 1, 2020. (I wonder if the disappearance of the Desjardins Credit Union in Ontario when Meridian amalgamated with it in 2013 or so helped to propel this move and bring back the Desjardins Credit Union name? Note that they're being renamed from the French caisses populaire to a credit union.) Though that will be the legal name, they plan on operating as Desjardins Ontario Credit Union, Caisse Desjardins Ontario, and Desjardins Ontario, in their marketing and promotional materials.

The participating individual caisses include the following:

• Caisse populaire d'Alfred
• Caisse populaire de Cornwall
• Caisse populaire de Hawkesbury
• Caisse populaire de la Vallée
• Caisse populaire Nouvel-Horizon
• Caisse populaire Rideau-Vision d'Ottawa
• Caisse populaire Sud-Ouest Ontario
• Caisse populaire Trillium
• Caisse populaire Vallée Est
• Caisse populaire Vermillon
• Caisse populaire Voyageurs

They will amalgamate with their provincial federation, the Fédération des caisses populaires de l'Ontario, and have 50 branches, a number of offices (less than full service levels), and additional non-branch Desjardins ATM locations that should bring them to just over 60 points of service. They expect to have 130,000 members and more than $6 billion in assets (as of now). However, based on their projections from this presentation, they're forecasting a combined asset base of $7.5 billion. Although not members of the Canadian Credit Union Association, the CCUA nonetheless includes Manitoba, Ontario, and atlantic Canada caisses populaires in its semi-annual system statistics. Using its most recent statistics from Q4 2018, and assuming the amalgamated caisses populaire attains $7.5 billion assets, that would make the amalgamated caisses the 6th largest in Canada and the 2nd largest in Ontario, after only Meridian Credit Union. Alterna Savings and Credit Union, of Ontario, would drop out of the top 10 largest credit unions in Canada. Their combined assets would even trump the planned combined Prospera/Westminster tie-up, which itself would drop Saskatchewan's Affinity Credit Union out of the top 10.

An important point: Each individual caisse is owned by its members, which then elect from their local board members of their provincial federation and the national Federation de caisses des Desjardins board. It's sort of like a flipped version of the credit union model whereby each individual credit union has their own separate products, brand, and systems, and they connect together through a relatively obscure back office and administrative central credit union. With Desjardins, they all share a common brand, technology, and branch services, which is unique in the sense that a member from one province should be able to go into another Desjardins branch in another province and access their accounts.

More details can be found in this brochure, in this presentation, and on this website.

The move will leave just one other Ontario caisses populaire, known as Alliance, with another ~$3 billion in assets and 30 branches. Who knows why they didn't join up, but I think, eventually, they'll be forced to do so. There are many technology upgrades that are required and planned major changes to Canada's clearing system that small credit unions just can't compete. The number of registered credit unions in Ontario has fallen and this amalgamation should reduce that number even further, to under two dozen CPs and credit unions. I think, within 5 years, you'll see that settle out at between 12-18 credit unions and likely 1 CP. Closed bond credit unions, too, will likely be completely amalgamated, particularly since they're so small and they just can't afford the technology and regulatory upgrades. They're also easy for existing credit unions to absorb and they can usually even close their 1 or 2 branches as they're often located within walking distance of another branch of the open bond credit union.

Cheers,
Doug