SK BANK CLOSURES: 20 rural branches in 2017

SK BANK CLOSURES: 20 rural branches in 2017

Postby Oscar » Mon Jul 10, 2017 8:46 am

'It is scaring a lot of people': Banks closing 20 rural Sask. branches in 2017

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Banks cite online banking, changing nature of banking as reasons for closures

By Micki Cowan, CBC News Posted: Jul 09, 2017 5:00 AM CT| Last Updated: Jul 09, 2017 8:57 AM CT

Disbelief and anger were Sheila McDonald's first reactions to the news that her hometown of Invermay, Sask., would be losing its only financial institution this fall — a long-standing Royal Bank of Canada branch.

"Your big fear is losing your school or losing your [care] lodge. When they start with this, you don't know where it's going to end," McDonald said.

"I don't know why they're trying to kill the small towns."

Invermay is home to one of 20 rural bank branches closing down in Saskatchewan this year, from three of Canada's biggest banks: Canadian Imperial Bank of Commerce, Royal Bank of Canada and Toronto-Dominion Bank.

Many of the communities seeing the closures still have credit unions, but three of them will be left without any financial institutions

That includes Invermay, located about 250 kilometres northeast of Regina.

When Invermay's RBC branch closes this fall, the next closest financial institution will be nearly 50 kilometres away in Wadena or Canora, Sask.

Online banking isn't an option for the 93-year-old McDonald, who said she doesn't own a computer and doesn't intend to buy one.

Travelling is also a struggle due to her failing eyesight. As of this fall, her only option to access money will be to hire someone to drive to the next town to go to the bank for her, McDonald said.

"We need these facilities. We have to have them," she said.

Aside from being a place to handle affairs, the bank was also a social hub for the community. McDonald fondly recalled heading to the bank and talking to the tellers, whom she called the "girls."

She figures several people in her community will be out of a good job.

"It's going to be a big price, that's for sure," McDonald said.

Changing reality

The Canadian Bankers Association's says there is a trend away from bricks-and-mortar banking.

Last year online banking was the most common form of banking in Canada, according to its annual report. Mobile banking is also on the rise.

Only 12 per cent used the branch as their primary method of banking.

RBC declined interview requests, but responded via email.

Regional president Kim Ulmer said the company is changing the way it serves small communities in the internet age.

The services are becoming more of a blend of online and cellphone banking, as well as branches and mobile advisers. Mobile advisers travel to people's homes to give them financial advice in larger centres, primarily regarding mortgages.

Ulmer said that's leading to changes in the size and structure of RBC's branch network in Saskatchewan, with the bank combining or relocating branches or opening new ones.

"These decisions are made after careful consideration of how we can best serve our clients in the market," Ulmer said.

The bank said it recognizes that changes like this may be challenging, but wants to work with people to find solutions.

But McDonald said RBC hasn't given the townspeople a good reason why it's closing the branch. She said the local bank usually has a lineup, and she gets good returns on her bank share investments.

"Those people that sit with their pointed heads and their pointed pencils and tell us and take ... the bank away from us —they don't think about what goes on in these small villages. All they can see is dollars and cents and that's it," she said.

Business impact

At least two local businesses are feeling the uncertainty.

Renee Parsons owns the town's only grocery store, BR First Stop Grocers on Main Street.

During a regular afternoon, customers will trickle in to buy their basics, ranging from chocolate bars and condiments to vegetables. It's not uncommon for people to share their worries with Parsons.

"I think it is scaring a lot of people. And I'm one of them," Parsons said.

Parsons is concerned that her customers will do all their shopping in the larger centres since they have to go there to use the bank anyway.

"I guess time will tell; the ripple effect. The streets are empty right now. It's going to be like a ghost town, I think," Parsons said.

Mark Eskra is the owner of Priority Insurance Inc. in Invermay, just kitty corner to the grocery store. Eskra said he's not happy about the change, but is accepting it.

"Nobody's going to stop it. Not you, nor I, nor anyone. It's going to move on," he said.

The closure will affect not just Invermay but the surrounding communities that rely on it for their banking needs, according to Eskra.

He described Invermay as a hub in the centre of a bit of a dead zone for services.

In fact, other financial institutions in the area have closed up in recent years.

Just a few months ago in December 2016, nearby Margo to the west lost its credit union. Then to the east, Rama's closed down not long before that.

Meanwhile RBC is trying to do some damage control in Invermay.

It said it's "actively exploring options" for a cash machine in Invermay, and may offer a community Wi-Fi service to aid people with online banking.

An ongoing trend

Economist Rose Olfert studied rural communities for most of her lengthy career with the University of Saskatchewan.

The closures don't surprise her. She said the viability of a business relates to whether it has enough people in the area to make it sustainable. Banks, she said, are no different.

"If there has been a bank or a credit union in the past, and then that bank closes down, then it has to be the case that there was at one time the required threshold market size or threshold population size that the bank could draw on, and something has happened," she said.

'If we could hold our bank, we could hold a lot.' - Sheila McDonald

Olfert highlighted online banking and declining population as some of those high-impact changes.

"If 20 per cent of the population uses online banking, you need 20 per cent larger population to support an actual bricks and mortar bank," she said.

It's a view that many economists agree with, but it doesn't hold much sway with the townsfolk.

"If we had any chance of getting this bank back that would be one thing that would hold the town together," McDonald said.

"If we could hold our bank, we could hold a lot."


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Re: SK BANK CLOSURES: 20 rural branches in 2017

Postby Oscar » Mon Jul 10, 2017 10:10 am

Council of Canadians supports CUPW proposal for postal banking

[ ... al-banking [

February 18, 2016 - 9:16 am

The Council of Canadians supports the Canadian Union of Postal Workers' call for postal banking.

An Oct. 2013 Canadian Centre for Policy Alternatives report, "Why Canada Needs Postal Banking" by researcher John Anderson notes [ ... anking.pdf ], "The rise of virtual and new retail banking and the growth of Fringe Financial Institutions in Canada show that the traditional financial banking sector is not meeting all the needs of Canadians. Millions of Canadians have opened accounts in or are using the services of these new institutions; but, although they operate in a similar fashion to traditional banks, they tend to be concentrated in urban areas and are not available in many parts of the country." Nearly two million Canadians a year use payday-lending services.

Additionally, the report highlights, "In Northern and rural Canada, on Aboriginal reserves, and in the three Northern territories, there have always been fewer banks and credit unions than are needed." In fact, thousands of small communities do not have a bank. And the report notes, "Some 3% to 8% of Canadians [about a million people] do not have a bank account."

As such, the report argues, "A new Canada-wide financial institution could offer products and services that challenge the existing patterns. The ability to offer competition for existing fees would be helped by the fact that banking services would be delivered through existing premises and staff. Use of the e-post system, as well as existing Canada Post delivery services, could help keep costs low. Clearly, offering postal financial services would allow the millions of Canadians without local bank branches or easy access to banking the access they need."

Canada Post already provides some financial services such as postal money orders, domestic and international money transfers, bill payment and financial transaction and payment notices, and prepaid Visa cards. The new services it could offer would include access by all bank and credit union customers to their accounts to deposit or withdraw cash, savings accounts and low-fee chequing accounts, low-interest credit cards; and prepaid debit cards. It could also eventually include mortgages, small-business loans and agricultural loans, insurance products, mutual funds and stocks, and special new products for low-income and Aboriginal peoples.

Postal banking operations exist around the world, including in Japan, China, Germany, the United Kingdom, France, Italy, Switzerland and New Zealand. And, as the CCPA report points out, "Postal banking is not something new to Canada. For over 100 years after Confederation, Canada had a postal savings system." And CUPW notes, "Our post office used to have a national saving bank up until 1968 - and there is no reason we shouldn’t have one today."

CUPW says, "Canada needs a postal bank. Thousands of rural towns and villages in our country do not have a bank, but many of them have a post office that could provide financial services. As well, nearly two million Canadians desperately need an alternative to payday lenders. A postal bank could be that alternative. Send your MP a message in support of postal banking."

To tell your Member of Parliament to support postal banking, please click here [ ... al-banking ]. When you do so, you will send a message that calls on Judy M. Foote, the Minister Responsible for Canada Post, to establish a task force to determine how to deliver new financial and banking services through our public postal service.

The Council of Canadians is also supporting a new campaign by The Leap Manifesto/This Changes Everything, Friends of Public Services and CUPW on this issue. More on that soon!

Further reading

Barlow condemns Canada Post cuts (Dec. 11, 2013)

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Postal workers ask why Canada Post not protected in CETA (Feb. 6, 2012)
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Brent Patterson's blog
Political Director of the Council of Canadians
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