Branch closures create some major challenges

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This article was published 18/01/2025 (440 days ago), so information in it may no longer be current.

After a series of mergers with other Manitoba credit unions over the past few years, Manitoba’s largest credit union has announced plans to close five of its rural branches.

On May 22, Access Credit Union will close its branches in Birds Hill, Gretna, Lowe Farm and Miami. Its Lundar branch will close in mid-September. The Access branch is currently the only financial institution in each of those communities, meaning that members will be forced to travel to other communities to do their in-person banking.

The planned closures represent the latest instalment of a worrying trend that is unfolding across the province. Assiniboine Credit Union closed its Gillam branch on Nov. 20. It had previously closed its St. Anne’s Road location in Winnipeg in December 2023. On Dec. 11 of last year, Access branches in Selkirk and Winnipeg’s North End were also shuttered. The Winnipeg branch, located at the corner of Main Street and Flora Avenue, was the last bank in the area.

Closer to home, Westoba Credit Union closed branches in La Riviere, Glenboro and Winnipeg in March 2022. TD Bank closed its Deloraine branch in 2018, while RBC closed its branch in the same community in the summer of 2022.

That’s just a partial list. There have been other branch closures across the province over the past few years, and more are anticipated in the coming months.

In many instances, the closures are justified based upon shrinking customer bases, staffing shortages and customers’ increased access to a range of online and ATM banking options. Access CEO Larry Davey points out that the need for in-branch visits has been dramatically reduced by the development of technology that allows for most customers’ banking to be conducted via their computers and smartphones.

He says that “We decided to take this action because members’ behaviour is changing so much … Right now, a little less than five per cent of transactions are completed in the branch.”

That’s a persuasive argument, and the decision to close branches may make good business sense for banks and credit unions. The impact of the closures on the communities and neighbourhoods they serve cannot be ignored, however, particularly when the branch that is designated for closure is the only financial institution in that community or neighbourhood.

Rural depopulation is already a serious issue in rural Manitoba due to limited access to timely and adequate health care, constant ER closures, long emergency response times, reduced access to education and sports options for children, as well as limited access to retail, dining and grocery options.

For those communities, the loss of their only financial institution can have a devastating impact. In addition to contributing to a growing perception of the community’s decline and inevitable demise, branch closures mean the loss of stable, good-paying jobs, hurt those without access to digital banking options, and it forces residents and business owners to travel to other communities for their in-person banking and borrowing.

Combine all those factors and its easy to understand why many residents would feel compelled to leave those communities, and why many more would refuse to seriously consider moving to those communities.

For urban neighbourhoods, the loss of a nearby bank can be just as impactful. Just as the closure of grocery stores in various neighbourhoods have created “food deserts” in many city neighbourhoods, the absence of banks and credit unions creates a perception of decline and undesirability that can quickly cause reduced property values and property tax revenues. That often results in an exodus of residents and businesses, making it even harder for the struggling neighbourhood to recover.

The loss of bank and credit union branches is a very serious problem for communities and neighbourhoods throughout the province, but what is the solution?

Decades ago, when chartered banks began to abandon rural communities and certain urban neighbourhoods, small credit unions were quick to fill the gaps. Now, with several credit unions merging in order to create large, multi-branch financial services organizations, the problem appears to be repeating itself.

Perhaps it is time for a new crop of smaller credit unions to emerge in order to address the financial needs and priorities of rural communities and struggling neighbourhoods. This may also be an opportunity for co-operatives and/or Indigenous-led organizations to craft and deliver innovative solutions that serve the interests of their members and communities.

Whatever the solution or solutions may be, the urgency of the situation cannot be ignored. The decline of rural Manitoba communities and struggling urban neighbourhoods is accelerating, and the clock is ticking. This is a time for innovative, imaginative community-centred leadership, and the sooner the better.