July 2004 - Enterprise Magazine

ENTERPRISE
The
VOICE
of
,. July 2004
CANADIAN CREDIT UNIONS
The Northern Lights have seen queer sights
But it may become common to see
The Hands Er Globe in Canada's North
As diamonds spark the economy
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THE
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ENTERPRISE
Editor
Roberta Staley
Enterprise is published by
Credit Union Central BC.
Art Director
John Ngan
CREDIT UN IO N CE NTRA L OF BR IT I SH CO LUMBI A
Production Manager
Izabel Naval
Contributing Editor
Laureen Griffin
Contributing Writers
Will Gibson
Diane Luckow
Laurie Stephens
Kevi n Yarr
Managing Editor
Gayle Stevenson
For information concerni ng
Board of Directors
Chairperson
Jack Whittaker
Vice-Chairperson
Lorne Myhra
Christine Brodie
Valerie Gauvin
Pearl Graham
Henry Jansen
Ed Macintosh
Catherine McCreary
Ross Montgomery
Doug Stanley
Jay Strong
Michael Tarr
Enterprise contact:
Credit Union Central of
British Columbia
Creative Services
1441 Creekside Drive
Vancouver BC
Canada v6J 4s7
Tel
Fax
604 730 6359
604 730 6434
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$30 per year (Overseas).
Opinions expressed in this publication are
not necessarily those of the publisher or
ed itor. The inclusion of an advertiseme nt
does not imply endorseme nt of the
product or service by the magazine or
Central. Enterprise w ill not knowingly
carry false or misleading advertising.
The magazine reserves the right to refuse
any advertiseme nt. The contents are
covered by copyright and all rights are
reserved. No material in this publication
may be reproduced in any form without
permission.
ISSN 0319-B626
BC CREDIT UN IO N SYSTEM
Peer Group Executives
Group One (Northline)
North Country - Ken Dickson
Spruce - F. Wagner
Terrace & District - V. Gauvin
Wi lliams Lake and District - W. Collins
Group Two (Okanagan)
Interior Savi ngs - D. Grant*
Osoyoos - J. Whittaker
Revelstoke - R. Holland
Salmon Arm Savings - M. Wagne r
Summerland & District - L. Campana
Valley First - L. Goodison
July 2004
..
Volume 64 Number 4
Group Three (Kootenay)
Castlegar Savings - L. Myhra
Castlegar Savings - 8. Gerrand*
Col umbia Valley
Creston & District - L. Eckersley
East Kootenay Community - D. Holt
Grand Forks District Savings - C. Manson
Kootenay Savings
Ne lso n & District - S. Gilfillan
COVER STORY
Especially among the Inuit, there is
a great sense of community.
Group Four (Vancouver Island)
Coastal Comm unity- R. Bennie
Comox Valley - R. Grundison
Evergreen Savings - R. Allen
Greater Victoria Savings - 8. Bittner
Island Savings - P. Graham
Island Savings - S. Service*
Quadra - S. Halliday
Group Five
Coast Capital Savings
Envision
North Shore
Prospera
Vancouver City Savings
Westminster Savings - R. Montgomery*
Group Six
Aldergrove - N. Ranson
CCEC - Sarah M urdoch
Community Savings - D.R. Parkinson
Greater Vancouver Community- P. Moore
Gulf and Fraser Fishermen's - E. Macintosh*
V.P. - R. Hoffman
Van Tel /Safeway - M . Aubert
*Denotes Chairperson
Pete r Podov inikoff, past president,
En visio n Credit Union
2s
All that Glitters
The discovery of diamonds in Canada's
north may pave the way for the
reincarnation of a credit union system
on the tundra.
Will Gibson
DEPARTMENTS
FEATURES
22
YOUTH
s Young Bloods
Road to Athens
6 Editorial
Several members of the Canadian credit
Attracting youth to the credit union system
union family are Olympics-bound .
is going to be tough - but not impossible.
Roberta Staley
Laurie Stephens
7 Small Tall<
Youth, big-name conference speakers and
on-lin e account raiders.
GLOBAL AFFAIRS
12
16
Desperado
24
Dual Citizenship
38 IT Girl
Even though bank heists net ever-
Honda Federal Credit Union, based in
Credit unions are bolstering the battle-
decreasing amounts, they remain a popular
California, wants to open a branch in
ments against hackers.
pastime among criminals.
Ontario. Anyone got a problem with that?
Diane Luckow
Laureen Griffin
Roberta Staley
New l<ids at the Top
Three new
CEOs
in the Canadian
OFFICE AFFAIRS
34
Ace that Job Interview
credit union system ponder their new
When it comes to nabbing a new job,
responsibilities.
it pays to sweat the small stuff.
Laureen Griffin
20 AIME Awards
Credit unions from across Canada strutted
their stuff at the annual Strategic Marketing
Conference and AIME Awards Gala Dinner.
Meet the winners .
GE o RGE BERN ARD SH Aw once quipped, "youth is wasted on the young:'
It's easy to understand Shaw's humorous cynicism; wouldn't it be nice to be
that irreverent, risk-taking, fun -loving and rebellious again? Add affluent to
that, and you have a pretty good picture of the youth of today. Buying power
in the billions of dollars is one of only many good reasons why credit unions
have to attract and hold the attention of youth. Ensuring the system's future
is another big reason.
It is important to keep in mind that, with youth, the medium is the
message. Teens and young adults are wired in a way that makes even the
most hip of baby boomers feel like a Luddite. When 72 percent of 16 to
24-year-olds use text messaging (sending typed messages on a cell phone),
download music rather than buy it, and listen to Shakespeare on a MP3
player, it's not hard to realize that traditional avenues of communications
will be heard as loudly as one hand clapping.
Finally, just to blow our own horn, Enterprise was recognized as Best
Trade Magazine of the Year at the 22nd annual Western Magazine Awards
last month. Also in the running were The Advocate, Canadian Diamonds and
Reel West. The ceremony honours editorial excellence in Western Canada in
writing, photography, illustration and art direction.
R O B ERTA STALEY
Editor
Small Talk
cast of speakers, including Boston-based busi-
YOUTH DON 'T COME CHEAP
names and passwords. Citibank and eBay are
Remember that old axiom - never trust anyone
the most common targets, according to MSN BC.
ness guru Bill Taylor, founding editor of Fast-
over 30? Well, the credit union system is getting
Online theft is the most rapidly escalating area
Company, and two Canadian super-achievers -
hip to this adage by launching a three-phase
of financial fraud .
motivational wonder woman Yvonne Camus
study to determine ways to hook into the cov-
and workplace wizard Dr Linda Duxbury. Also
eted youth market. Initial results of the Credit
STAR - CAST LINEUP FOR FALL CONFERENCE
Union Central of British Columbia-sponsored,
Credit Union Central of British Columbia's
on governance, legislative issues, marketing and
$300,000 initiative. to tap into the $600-billion
2nd Annual Fall Conference, Nov. 18 and 19, at
fraud awareness, plus the 25th Annual BC Credit
18 to 24-year-old market will be available at the
the Western Bayshore, Vancouver, boasts a star
Union Trade Show.
featured are electives for directors and managers
end of this month.
SPEAl<ING OF YOUTH
Nelson & District Credit Union in Nelson,
BC, nabbed this year's Credit Union Central
of Canada's National Credit Union Innovation
Award for its achievement in developing a youth
services program. The credit union developed
new accounts that cater to the needs of young
people and initiated connections with community groups involved with this segment, while
also creating a new youth services representative position.
RAID!
Nearly two million Americans in the past
12 months had their chequing accounts raided
to the tune of $2-billion, reports MSN BC.
According to Gartner, the company that
researched the losses, most of the thefts which averaged us$1,200 each - occurred on lin e.
The theft is linked to 'phishing' emails, which
attempt to defraud consumers of their user
''Daddy is.fiscally buff"
JULY 2004 • ENTERPRI SE
7
rs a credit union to do when many
of its members, directors and staff are fast turning grey?
Listen to people like Generation Y member
Nathan Jones, who is also a member ofRexton
Credit Union in New Brunswick. "If you don't
WHAT
8
EN T ERPRIS E ·J U LY 20 0 4
appeal to us, credit unions aren't going to exist;'
Jones says sagely.
Jones isn't just a member of Rexton. Now
20, Jones, while a teen, was president ofRexton
High School's credit union, a creation of the
parent organization that recognized the need
to attract youth to the system. But, rather than
focus solely on recruiting young members,
the $22-million credit union took a broader
approach - one that engaged youth in a way
that encouraged participation and longer-term
commitment to the cooperative system.
Last year, with Jones presiding over a
i2-member board composed of fellow students,
the high school credit union provided more
than 360 students and school staff with deposit
and withdrawal services. "It was a learning experience for me;' says Jones. "Being on the board
gave me different leadership skills and I got to
see what a credit union is like:'
At first, Jones says, students like him joined
the high school credit union purely for convenience. Then they learned about the local focus
of credit unions and their emphasis on socially
responsible investment in communities. For
Jones, that became a critical benefit of choosing
a credit union instead of a bank. "If you don't
really have a say in where your money is going,
wouldn't it bother you?' he asks rhetorically.
"Personally, I'd rather see my money deposited in
JULY 20 04 • ENTERPRI SE
9
YOUTH
something positive rather than the arms trade or
something like thaf'
Jones is the wave of the future for Canadian
credit unions. He's part of a much sought-after
demographic, Generations x and Y, who are
technologically savvy, embrace the concept of
social responsibility, have impressive amounts
of disposable income, but lack knowledge about
personal finance.
Jones is also characteristic of a growing
segment of the population that credit unions
desperately need to counter-balance their
traditional base of members and employees the aging Baby Boomers, born between 1945
and 1964.
Credit unions, in pockets across the country,
are approaching the challenge in. three ways:
by marketing to youth, by recruiting younger
board members with specific skills, and by planning for business continuity within the ranks of
management by injecting young blood into the
system. "There's absolutely no question about the
demographics;' says Ed Sarnecki, principal of
DWES and Associates Inc., a Whitby, Ont.-based
consulting firm that specializes in succession
planning for credit unions. "We are experiencing a real turnover ofleadership positions. The
whole war for talent issue is clearly at play:'
Innisfil Credit Union is one of Sarnecki's
clients, a $72-million credit union that serves
7,400 members in two bedroom communities
south of Barrie, Ont. The region is experiencing
tremendous growth, and Innisfil has nearly
30 percent market penetration.
One of the challenges facing the credit
union is how to stay in tune with its expanding membership and the changing face of
the community. When Heather MacDonald
came on board as CEO in 2002, she found a
credit union that was experiencing phenomenal
growth, but lacked a plan to deal with the loss
of staff, managers or board members. A year
Personally, I'd rather see my money deposited in
something positive rather than the arms trade or
Something like that.
as consumers.
More than 60 percent of Canadian youth use the Internet daily.
The average teen has a monthly disposable income of $soo.
Half of Canadian teens have jobs averaging 15 hours a week.
In 2000, both VISA and American Express launched credit cards
for kids aged 12 to 18.
S O URCES : Statistics Canada, Youth Culture In c., Lycos, Street Cents,
Media Awareness Network.
ENTER PRISE• JU LY 2004
. Nathan Jon es, member, Rexton Credit Union
ago, Innisfail began structuring a continuity
plan that encourages professional development
and promotion within the credit union, so that
when a position comes vacant, recruitment
will be internal - an important selling point to
younger staff who want to stay with the system
and move up through the ranks. For MacDonald,
the wisdom in having this kind of a plan in place
is simple: "When I leave, I want the person who
replaces me to know the job inside out. I want a
smooth transition:'
Ganaraska Credit Union, east of Toronto,
is another organization working on a continuity plan designed to attract younger employees.
General manager Wes Walton, a 33-year veteran
of the $45-million credit union, says a number of
key people, including himself, are nearing retirement. He wants to ensure the credit union had
a plan in place to deal with the turnover.
The rising influence of Gen x and Y is the
big incentive for continuity planning, he says.
Credit unions need to systematically hire, develop,
train and nurture younger staff so that they stick
around for new opportunities and generate vitality within the organization.
Youth aged nine to 19 spend more than $14-billion a year
10
Ganaraska has hired three young employees
in the last few months. A side benefit, says
Walton, is they bring their friends in as members,
who, in turn, bring in their friends. Currently,
Ganaraska has about l,ooo members under 18.
Walton says continuity planning should be
of concern to the national credit union system.
"There's a lot of top management turning over in
the next five years. It's the youth we want to be
bringing along."
Equally important to MacDonald and Innisfil
Credit Union is the role of the board and how
to ensure that its overall strategic direction was
true to its growing membership. In recent years,
Innisfil has added three new board members
under the age of 35, including one who manages
the only large grocery store in one of the communities where Innisfil has a branch.
"When there's a vacancy at the board, we go
out and search and plug the hole with someone
we think is of value to us;' says MacDonald.
"Diversity is very important:'
The younger board members have delivered
a new dynamic to the credit union's governance,
says MacDonald. They have creative ideas, an
enterprising mindset, and are keen to champion
new products and services. "This is important
if were to survive in this competitive market;'
MacDonald says. "It's even more important in a
small community where you're trying to capture
younger members who want the same services
as those found in larger population centres:'
Rexton Credit Union reaches further down
the chain to cultivate new blood. Its high school
credit union introduces youth to the benefits
of membership, teaches them about personal
finance, and gives them hands-on experience in
running a cooperative business. Rexton general
manager Garth Lawson says the student board
and staff have to make budgeting decisions and
make presentations to Lawson's management
team at the credit union. "There's no replacing
the experience they get;' he says. "It's basically
the real thing, just on a smaller lever'
Lawson says the high school program was
born out of two realities in the financial services
industry: youth are the consumers of the future,
and people are creatures of habit who don't like
to switch financial institutions. "If we can get
people to recognize the benefit of the credit
union system early on, they don't have to switch."
Vancouver City Savings Credit Union has
also devoted attention in the last two years to
increasing its penetration in the youth market,
one that the $9-billion credit union considers
to be traditionally under-served. Like Rexton,
Van City has a school credit union program but
also targets an even younger audience - elementary students. In existence for seven years, the
program boasts 15 school credit unions with
students filling all staff positions.
Kelly McNeil! Sproxton, manager of segment
marketing for VanCity, says the program is
mostly about providing children with leadership
opportunities, building their self-esteem and
teaching them the importance of saving and
investing. "The youth are empowered to make
really big decisions:'
For older youth, VanCity's challenge lies in
being relevant in their market, says Sproxton.
That means the credit union has to sell its uniqueness, but also talk to youth "on their terms and
on their turf. It's really about finding what makes
them tick - what's cool, what's trendi'
Prior to drafting its strategy, Van City was
aware that today's youth are more socially and
environmentally conscious than past generations,
and they appreciate a business' commitment to
the community in which it operates. However,
a series of focus groups revealed that youth did
not possess a high level of awareness of either
VanCity or about the difference between credit
unions and banks.
So, last September, Van City hired a number
of young people to ride around local university
campuses on cruiser bikes during Back to School
Week. They tallced to students about VanCity
and what the credit union could do for them.
The message was, "you don't have to have a
million dollars just to have us sit down and talk
to you;' says Sproxton.
The drive resulted in a sizable increase in new
members who are educated and looking ahead at
a lifetime of opportunity - the ideal target market
for a financial institution that understands the
need to invest time and effort to nurture a new
source of growth. "We need to be creating that
young membership base to sustain us over time;'
says Sproxton.
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JULY 2004 • ENTERPRISE
11
IN 1997, five men stormed into Community
Savings Credit Union in Surrey, British
Columbia, emptying sawed-off shotguns into
the ceiling. Shaky tellers did as they had been
trained to do - they shoved the bills through
the wicket. Within 30 seconds, the group had
fled and piled into a get-away car parked out
back. Sounds like a movie, right? Wrong. In the
movies, the robbers always plan their caper and
have the sense to descend somewhere that will
net them enough money to make the risk worthwhile. In this case, the five got $1,200, barely
enough to treat their molls to a steak dinner.
"Today;' says Bob Parkinson, CEO of Community
Savings, "the robbers get even less:'
As George Clooney, playing the polite,
charming, unarmed bank robber Jack Foley, says
in the movie Out of Sight, most bank robbers
are morons. Professional bank robbers - the
intelligent planners who make a living cracking
safes and arranging heists - have moved on to
the more lucrative fields of fraud and plastic card
scams, leaving the cash-and-carry crowd to the
disorganized and impulsive. Most bank thieves
today are repeat offenders, carrying out a string
of robberies, getting caught and robbing yet
another bank on their way home from prison.
It's easy, if not particularly lucrative. Almost
70 percent of the bank robberies in BC last year
netted the perpetrators less than $1,000.
Ninety percent of the robberies in Vancouver
are committed by lone note-passers who are in
[_
and out of the branch in three minutes. Unlike
Clooney, they are neither polite nor charming,
threatening staff with a cache of weaponry that
can include guns, hypodermic needles, knives,
machetes and axes. In Toronto, the take is
usually higher and the experience even scarier.
"The credit unions in Ontario don't get the notepassers, we get the guys with the guns;' says
Terry Keighley. His eponymous company, Staff
Sergeant Terry Keighley Inc., has a contract to
investigate robberies with Level Five Strategic
Partners, a company that conducts risk management for Ontario credit unions. "A lot of holdups here involve three to four men. They enter
the building and then stay, hoping to get the
vault opened. They handcuff the employees, kick
them, and really terrify them;' says Keighley.
Yet it is the Vancouver area that leads the
country in bank and credit union robberies. In
2003, the Canadian Bank Association reported
237 bank robberies in Greater Vancouver, 114
in the Toronto area and 45 in Greater Montreal.
Credit unions reported an additional 69 robberies in BC, eight in Ontario and 53 in Quebec.
The robbery rate is steady or decreasing in
Toronto and Montreal, but in the Vancouver
area, bank robberies are rising; there were 190
in 2002, up from 170 in 2001. Because many of
British Columbia's large credit unions are as
prominent as banks, with branches located in
heavily travelled areas, credit unions are as likely
a target as any bank. Between 1990 and 2000,
the average number of BC credit union robberies was 40. In 2002, it leapfrogged to 59 before
vaulting to 69 last year. Most of the robberies at
BC credit unions occur in the densely populated
Vancouver area, while only 20 percent of Quebec
credit union robberies are in Montreal. What
malces Vancouver the country's hotspot for heists?
"Drugs;' says Det. Les Yeo of the Vancouver
Police Department's major crimes squad. "Drug
activity in Vancouver is far different than in
Toronto or Montreal. It's more prolific and
concentrated in a smaller area:· Yeo says that the
drug problem has actually "cleaned up" in the
past year, even as bank robberies in the city itself
increased to 131 in 2003, up from 110 in 2002.
"It goes in waves;' says Yeo, "depending on who is
in custody and who is on the street. The majority
of bank robbers are recidivists, and at any given
time there might be 20 robbers out looking for
a financial institution that could provide easy
moneY:' Only 20 robbers, but each commits
four or five robberies before they are caught.
And most are caught - Vancouver police have a
clearance rate of 85 percent.
In Ontario, where gangs terrorized financial
institutions throughout the 1990s, the atmosphere changed radically after the murder of
Nancy Kidd in 1999· An employee of the Toronto
Dominion Bank in Brampton Ont., Kidd was
killed during a take-over robbery by four men.
Her death prompted the banks to start spending
massive amounts of money to protect their staff
JULY 20 04 • ENTERPRIS E
-
-
------------------- -----
13
in high-risk areas. The Toronto police initiated
monthly meetings that include robbery investigators from financial institutions and all the
regional police departments in southern Ontario.
A common radio system also helps them relay
he credit umons m
The police in most big city robbery squads
can instantly identify a robber when they see the
picture from the credit union or bank's surveillance camera. Once they nab the robber, reports
from other financial institutions help them
ntarto don't get the note-passers, we
get the guys with the guns.
information instantly to different police departments about new robberies.
Vancouver-area investigators, who are
managed by a variety of municipalities and
different RCMP detachments, have only managed
to meet once in the past four years to share
information. With the robbery rate jumping,
investigators are now trying to piggyback on
the monthly meetings of the International
Association of Financial Crimes Investigators,
which usually focuses on fraud and credit card
crime. The investigators from all financial
institutions have also started a robbery data
bank that is maintained by the credit unions
and shared via e-mail.
Terry Keighley, Staff Sergeant Terry Keighl ey In c.
charge the criminal with multiple offences rather
the one crime for which he or she is arrested.
Most credit union and bank managers believe
these robbers get sentences that are too lenient.
Yeo says that the length of time for which these
criminals are imprisoned varies from a conditional sentence such as house arrest to 30 years
behind bars. "It depends on the past record of
the robber, the level of violence and whether a
firearm was used;' says Yeo.
Fred Desroches is the author of Force & Fear,
Robbery in Canada, for which he interviewed So
robbers. "Long prison sentences don't seem to be
much of a deterrent. In the United States, prison
sentences are much harsher, but their bank
robbery rate is much higher;' says Desroches.
"Most robbers don't think about sentences until
they are convicted:'
Desroches' study shows that most bank
robbers pull their first job to pay the rent or
satisfy another pressing financial need. But
once they have the hot money in their hot little
hands, it's usually blown on parties and good
times. "Heavy drug use usually follows the initial
robbery rather than causing it;' says Desroches.
He also notes that a transient population,
which characterizes the Downtown Eastside
of Vancouver, home to many drug addicts, can
push robbery rates up. "People who move a lot
don't have the normal social bonds that deter
people from committing crimes:'
Bank robbery may no longer be the domain
of pros, but preventing robbery requires
professionals, the latest technology and lots of
money. "If there are banks and credit unions
on four corners of a busy street, and three have
guards, the robber will choose the one without
the guard;' says Lawrence Godby, senior risk
management officer with Credit Union Central
of British Columbia. This can pose a problem
for credit unions. Guards cost up to $3s,ooo a
year, and, if a credit union has 10 or 12 branches,
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ENTE RPRIS E• JU LY 2004
guards become unaffordable. Godby recommends digital cameras, single entrance branches,
windows uncluttered by posters or other advertising, TV screens that let the robbers know they
are being photographed and signs asking everyone to remove sunglasses and hats. Greeters are
more than a good marketing tool. "A robber
does not want to be approached or directed to a
certain department. He doesn't want someone
to look directly into his eyes and converse with
him;' says Godby. "That makes him nervous, and
he might decide to leave:' For credit unions in
areas with lots of financial institutions and high
robbery rates, Godby suggests that they budget
for guards, and explore other types of deterrents.
"Exploding dye packs don't cost a lot of money,
and a robber who finds himself covered in red
dye as he steps out of the branch is unlikely to
return to that particular branch;' he notes.
Some credit unions are already using digital
cameras, dye packs and guards. But others look
at the minimal loss of money from robbery and
find it difficult to justify a large outlay for security. "The money is not the issue;' says Godby.
"It's the trauma, physical threat and actual injury
to our staff and members that matters:'
Dan Stone, president of Daniel Stone &
Associates, Inc., an employee and family assistance firm in North Vancouver, has counselled
the staff and members in 80 BC credit union
robberies. In 2001, his firm conducted a large
bank robbery study, co-sponsored by the
Canadian Bankers' Association and BC Central,
studying the effects of heists on staff. "They
feel Iil<e prey being stalked by a predator who
is threatening their lives. After one robbery,
a person functions less well, feels vulnerable,
exposed and helpless;' says Stone. Cluster
robberies - two or more robberies within
30 days - compound those feelings. "There's no
time to integrate the feelings and memories, so
staff will have a smashed sense of security, be
confused, and watchful:' Stone says this might
lead to an "increased risk of non-compliance
to the robbers' demands in cluster robberies
because staff may feel outraged and angry that
this is happening over and over."
People have to talk after a robbery - to counsellors, co-workers, friends and family - to make
sense of what has happened. "But corporate
empathy is the lead factor in predicting recovery
for staff after a robbery;' says Stone. "The head
office response must be authentic and given
freely to mend that shattered sense of community
spirit in the branch:' A phone call or a perk maybe bringing in masseurs early the next morning - can be a sincere acknowledgment of the
trauma these employees have undergone. But a
parade of the concerned and curious from head
office is not helpful, Stone cautions, because the
employees need to get back to the steadiness
of a routine.
Hardening the target - making it more
difficult for the branch to be robbed by taking
visible steps to improve security - is another way
to demonstrate that the credit union cares about
their safety. "The total amount of money that
BC credit unions lost in robberies last year is
probably less than the annual salary of two tellers;' says Godby. "But the trauma to our staff,
our most valuable asset, is immeasurable:' !!
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JU LY 2 004 • ENTERPRISE
15
On the Ball
As A F o RM ER high school basketball player,
Howard Bogach developed some pretty smooth
16
EN TER PRIS E •JULY 2004
moves. Although his career was interrupted
by a broken knee and ankle, Bogach found a
niche coaching the game, taking his 11-year-old
son Alex's team, BJC Magic, to a silver medal
in the 2003 Ontario Atom provincial basketball
championships.
Coaching a competitive team of preadolescent boys takes patience, tact, and a
shrewd assessment of each kid's ability and
motives. Some boys want to be the next
Michael Jordan, some play at their dad's urging.
Managing the kids, placating their sometimes
over-enthused parents, and working with other
coaches and teams is good training for Bogach's
new job. He was recently appointed CEO of
Credit Union Central of Ontario, replacing
Mouvement des caisses populaires acadiennes
Jonathan Guss, who retired March 30. One of
Bogach's opening gambits at Ontario Central is
an invitation to the board of directors and vicepresidents to find out what life looks like on the
court - as a player - by spending a week working in a credit union.
Credit unions often complain that provincial
centrals don't understand credit unions. Well,
"not any more;' laughs the former CEO of Metro
Credit Union, a Bay Street player that grew to
$500-million from $171-million under Bogach's
10-year tutelage.
Bogach wants Ontario Central's 263 affiliates
to get to know and trust their Central better.
"The credit unions want us to show how we
spend their money and the results we get,
whether the project is technology or advertising;' he says with the intensity of someone
who wanted to know the same thing just a few
months ago.
Ultimately, Bogach wants to help Ontario's
credit unions prosper, and develop them as
places where members can access a full range
of services and products. He expects this will
JULY 2004 • ENTERPRI SE
17
happen in combination with increasing mergers,
as well as the development of inter-provincial
and even federal credit unions.
Closed bond credit unions, still prospering in
Ontario, are opening up, but Bogach is cautious.
Having shepherded Metro through the transition from a closed-bond institution for postsecondary instructors to a community credit
union, Bogach believes that widening the bond
is not always a panacea. "If a credit union has a
benevolent sponsor, it should enjoy it;' he says,
"because when you open the door sometimes it's
problems instead of money that rolls in:'
Bogach also wants to build upon the jettisoned merger talks between Ontario Central
and Credit Union Central of British Columbia,
believing there are many ideas and opportunities to salvage from the two-year talks. "The
relationships forged between the two centrals
will lead to far greater collaboration between the
credit unions of East and West;' says the native
Albertan.
Bogach is determined to help Ontario credit
unions take advantage of any holes in the market,
making the system an even stronger player in
the province's cutthroat financial sector. It'll
If a credit union has a benevolent
sponsor, it should enjoy it because
when you open the door sometimes
it's problems instead of money that
rolls in.
take a real team effort from all players. But with
Ontario Central's vice-presidents and directors
wearing their members' jerseys, Bogach may be
building an all-star team for the financial playoffs.
• Laureen Griffin
A Premier CEO
POLITICIANS LIKE to schmooze, and
Camille Theriault is no exception. The new
CEO of the Mouvement des caisses populaires
acadiennes (MCPA) in Caraquet, New Brunswick,
starts every morning by calling one of the 35
caisses populaires managers. "I want to know
them personally as well as professionally;' says
18
ENTERPRISE• JULY 2004
Theriault. "Before I start talking business, I have
to know who has just had a baby, who likes to go
fishing, play golf or drink good wine:'
Theriault, who was appointed to succeed
Gilles LePage, does not have the background
of a typical credit union CEO. For just over a
year, following former Liberal premier Frank
McKenna's resignation in 1997, Theriault led New
Brunswick, capping a political career that started
with his election as the MLA for Kent South in
1987. He may never have approved a mortgage,
I want to /<now [the managers]
personally as well as professionally.
Before I start ta/Icing business, I have
to /<now who has just had a baby, who
lilces to go fishing, play golf or drink
good wine.
but as a minister in McKenna's cabinet from 1991
to 1997 he held the portfolios of fisheries and
agriculture, advanced education and labour and
economic development and tourism. Theriault's
short tenure as premier ended in June of 1998
when Bernard Lord's Tories decisively won the
provincial election. Theriault, however, retained
his seat and led the opposition until 2ooi.
"If you're looking for a banker or insurance
guy, I'm not that;' Theriault says, "but if you are
looking for someone who can work with people,
who knows the province, who has enthusiasm,
managerial skills and a financial background,
then I'm your man:' Theriault sees some similarities between running the province and running
MCPA. "Both are big. You need a financial and
management background and you have to deal
with various constituents; at MCPA it's the employees, members and caisses populaires managers:'
Pulling all those constituents into a single
team is one ofTheriault's priorities as CEO: "We
have to remind ourselves every day that we work
for the caisses populaires, not vice versa. Because
of the context of the movement, you develop a
'we and they' syndrome. I'm promoting the 'us'
syndrome:' Acknowledging that this division is
a common problem between centrals and their
member cooperatives, Theriault has already
taken small symbolic steps to convince the staff
in his own office that everyone is an equal player
on this team. The five parking spots reserved
for Theriault and MCPA's vice-presidents disappeared during his second week on the job. "If the
maintenance person is here before I am in the
morning, he deserves a better parking spot;' says
Theriault. "We're all links in the same chain, with
different roles to play. If you treat any link differently, the chain breaks:'
Theriault's profile as a former premier has
other advantages. For example, he isn't worried
about attracting new talent to MCPA in a
province where the educated young typically
flee west. "Because of my contacts in politics;'
Theriault says, "I know a lot of young people in
Fredericton and Ottawa who would be interested
in working for us:'
Theriault is pleased by the size and energy of
MCPA and wants his team to spread the message
a lot more effectively about the breadth and
depth of the services available. "There's room
for growth everywhere;' he says optimistically.
"I don't think anyone, even our members, know
the gamut of services that we have developed, so
we have to promote those services a lot better:'
With profits of $25-million, MCPA can afford
some high-powered advertising. Couple that
with Theriault's high profile, and it seems certain
that the MCPA's position on the financial map is
about to become significantly larger.
Laureen Griffin
Cultivating a Path to Prosperity
AT TH E beginning of this month, Allison
Chaytor-Loveys followed the same route she
has been taking since 1973, motoring along
Freshwater Road in the early morning sun, past
suburban homes and strip malls, before pulling into the parking lot of Newfoundland and
Labrador Credit Union (NLCU). The trip may
be the same, but Chaytor-Loveys drives with
a different purpose. Ray Hopkins just stepped
down as CEO after 31 years, and Chaytor-Loveys
is the credit union's new captain.
The squat, red-brick building may be modest,
but Chaytor-Loveys' ambitions are not. She plans
to build upon a trajectory of growth that has
made the credit union the largest in the province,
with $230-million in assets in 2003, an increase
of eight percent from the previous year.
Heading the province's largest credit union
is not what Chaytor-Loveys imagined 30 years
ago when she started a summer job as backroom administrator and jack-of-all-trades at the
$1.4-million credit union. Armed with a one-year
diploma in office administration, and aspirations
to attend nursing school in the fall, ChaytorLoveys nevertheless stayed on, working her way
up the corporate ladder.
Chaytor-Loveys has inherited a healthy
institution. With its traditional mortgage and
savings business going strong, NLCU is moving
into wealth management and business financing,
We want to empower the people
who deal with us to talce control of
their financial future.
offering seminars in both to members, while
strengthening its reach into the youth market
with student loans.
The new initiatives come at a time of increasing optimism in Newfoundland and Labrador's
economy. Riding the oil industry wave, the
province has matched or exceeded the national
rate of growth in six of the past seven years,
including an astounding 15-4 percent growth rate
in 2002.
Chaytor-Loveys wants NLCU to take advantage of this increasing affluence, but faces the
challenge of a marketplace misunderstanding of
what credit unions are all about. "Credit unions
are seen as a friendly place to do business, but
they're not seen as the full financial experience;'
Chaytor-Loveys says. "We're not seen as places
where complex financial transactions can be
completed:'
To address this misconception, she is counting on a new branding initiative promoting the
region's credit unions as one-stop-shops in cooperation with other Atlantic Canada credit unions,
an initiative that has been on the drawing board
for a year.
Despite this larger scale, region-wide cooperation, credit unions in Newfoundland and
Labrador do not have a good reputation for
cooperating at a provincial level. There are two
credit union trade associations in the province,
and no financial central. (Credit Union Central
of Nova Scotia provides Newfoundland and
Labrador credit unions with all the backroom
processes like deposits, loans and chequing on a
fee-for-service basis.) However, Chaytor-Loveys
does not see historical acrimony as an issue,
pointing out that the province's credit unions
can work together when the need arises, as
in 2002 when they lobbied the government to
increase deposit insurance coverage to $250,000
from $60,000.
For Chaytor-Loveys, there is only one priority,
growing NLCU and the wealth of members. "We
want to empower the people who deal with us to
take control of their financial future;' she says. !l
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JULY 2004 • ENTERPRISE
19
PHOTO : YANN I S BEHRAK I S / REUTERS
•
Next month, a host of Canadians will journey
to Greece, birthplace of the ancient Olympic games,
when Athens hosts the Games of the XXVlll Olympiad.
Included among the nation's top athletes are a handful of individuals the credit union system is proud
to claim as family.
AB O V E:
David l<ikuchi
O PP O SITE :
Jill Savege
(bottom) Lyndsay Belisle
(top)
22
ENTE RPRI SE •J ULY 200 4
by Roberta Staley
CHAMPIO NS ARE created from a random
collision of genes and circumstance, popping up
unexpectedly in the humblest of provenances.
They amaze us with their speed, strength and
the stoicism that allows them to endure the tears
and breaks of body and bone that inevitably
result from pushing bodies to the limit. Three
young Canadian Olympians, Jill Savege, Lyndsay
Belisle and David Kukuchi, are heading to
Athens to prove to themselves, their country and their credit union - that they are as strong
and fast as any of the world's finest athletes.
•
Jill Savege · On Aug. 25, Penticton,
British Columbia triathlete Till Savege will leap
into the water off Athens' most famous beach,
Oceanida, for a i.5-km swim. She will then jump
on her $5,000 Trek racing bike for a 40-km
spin through Athens' mountainous topography,
ending with a 10-km sprint along the ancient
city's stony perimeter. The gruelling race is a
"dream come true:' says 30-year-old Savege, who
has envisioned being an Olympian since she
was a child. A gold medallist at last year's Pan
American Games, Savege has consistently ranked
near the top internationally in women's triathlon
thanks to her speed; she peels off sub-six-minute
miles during the run and peddles at 40-km/hr
on her bicycle.
A teller at $9-billion-asset Vancouver City
Savings Credit Union during the mid-199os
while attending university, Savege has, thanks to
sponsors, including Van City, been able to train
full-time for the past three years. Sponsorship
money covers living expenses as well as the cost
of competition, which ranges from travelling to
international meets, and buying equipment like
the hyperbaric tent she sleeps in. The tent simulates high-altitude conditions, the theory being
it increases oxygen-carrying red blood cells for
enhanced endurance. Medical expenses for
necessities like massage therapy and high-quality organic food also carve a chunk out of the
monthly budget. 'Tm so proud to represent my
family, my community, my province and Canada
and I'm really proud to be representing Van City.
The credit union is in a class by itself for community support and high values:' says Savege.
Lyndsay Belisle · When the ancient
games of the Olympiad were born in 708 BC,
wrestling was already an ancient sport, a
weapon-less form of military exercise. In 1896,
after a 1,500-year absence, the Olympics were
resurrected, with wrestling a link between
the past and modernity. Now, 108 years later,
wrestling has gone through another permutation, with women wrestlers competing in the
Olympics for the first time ever. A top contender
is Lyndsay Belisle, 26, who grew up in the town
of New Hazelton, BC, a 15-hour drive north
of Vancouver. New Hazelton is also home to
$166-million-asset Bulkley Valley Credit Union,
which is collecting donations for Belisle from
such diverse sources as elementary school kids
and the local fire department, to help ease the
financial burden offull-time training.
•
Belisle now resides in Burnaby, close to
the world-renowned wrestling club at Simon
Fraser University where she trains. The club has
spawned champions like Daniel Igali, a gold
medal winner four years ago at the Olympic
Games in Sydney and a medal favourite once
again in Athens. Belisle, who is the top woman
in Canada in the 48-kg weight class and a silver
medallist at last year's Pan American Games,
hopes to garner wrestling glory herself. "If I
perform to my potential, I should get a medal;'
she says. It's something she has been working
towards ever since high school, when Belisle
became one of the pioneers in women's wrestling
in Canada. If Belisle does mount the podium,
residents of New Hazelton can feel pride they've
been part of that achievement. "It's incredible
and mind-boggling how much community
support there is;' Belisle says.
PHOTO : JOSE M IGUEL GOMEZ / REUTERS
•
David l<il<uchi · Haddock chowder
may be a bit too down home for some, but, in
the Maritimes, fish stew is the dinner of champions. Haddock chowder is the favourite fuel of
Canada's top male gymnast, 24-year-old David
Kikuchi of Fall River, Nova Scotia. Thanks in
large part to Kikuchi's impressive placings in
international gymnastic competitions, Canada
is ranked ninth in the world behind such traditional powerhouses as China, the United States
and Russia. Last year, Kikuchi ranked 20th in
the world individually, one of the highest placings ever attained by a Canadian. "It was a big
surprise to do that well;' says Kikuchi. "I've
added some new moves that have a greater
degree of difficulty so I think I can do better in
Athens:' Despite these achievements, sponsorship has been hard to come by and Kikuchi
lives with his parents, Tak and Mary Kikuchi,
surviving off a modest monthly stipend from the
federal government.
The Kikuchi family has long been a part
of the Fall River community and are 10-year
members of $90-million Heritage Credit Union.
Like the rest of the community, Heritage staff
is excitedly following every competition that
Kikuchi and his teammates attend. Kikuchi has
become a Nova Scotia celebrity, with Internet
sites detailing his personal likes and dislikes
(favourite movie: Star Wars; astrological sign:
Capricorn; favourite events: rings and pommel)
for a growing legion of fans.
Tak, who has coached David since his son was
six, and continues to put him through his paces
at the Halifax ALTA Gymnastics club, hears this
month ifhe has been chosen as one of the official
coaches of the Canadian Olympic men's gymnastics team. Together, coach and son may just prove
to be an unbeatable combination.
GLOBAL AFFAIRS
I
No longer of Him be it said
"He hath no place to lay His Head"
In every land a constant lamp
Flames by His small and mighty camp
Excerpte d from "Citizen of t he Wo rld" by Joyce l<i lme r
24
ENTERPR ISE ·J U LY 200 4
people cross the border
between the United States and Canada. Some
of these Canadians live in America full time. Or,
like the so-called snowbirds - retirees who flock
south to escape winter's bite - only part-time.
Students, academics, businesspeople and actors,
EVERY DAY, 300,000
who flit between Hollywood, Vancouver and
Toronto for work, also border-hop.
Meanwhile, some Americans also take up
residence in Canada, often for the lifestyle,
choosing such trendy enclaves as Whistler,
British Columbia, where the apres-ski life rivals
the skiing.
America's Honda Federal Credit Union, itching to
open a branch in Ontario for years, is stymied by provincial
legislation. But the winds of change are blowing.
by Roberta Staley
It would seem reasonable that, with more
than $soo-billion a year in goods and services
flowing back and forth, credit union financial
services would be included. But there is barely
any cross-border business at all between credit
unions. And that's something Jim Updike, CEO of
Honda Federal Credit Union in Torrance, Calif.,
wants to change.
Eight-branch, $380-million-asset Honda
Federal is only open to employees of the car
manufacturing giant and their families. Updike
views Canada as an untapped source of business.
Fifteen years ago, Updike was contacted by staff
at the Alliston, Ont. Honda plant, an hour's drive
north of Toronto, with a request for financial
services. Ever since, Updike has aspired to cross
the 49th parallel into Canada and open a branch.
Updike estimates there are 5,000 potential new
JULY
2004 •
ENTERPRISE
25
GLOBAL A FF A IRS
members in Alliston to add to Honda Federal's
roster of 45,000 members. But, despite meetings
with provincial credit union regulators, legislators and Credit Union Central of Ontario executives, the idea has never made it past Updike's
'to-do' list onto his 'doing' list.
Updike has come up against legal walls in
Canada that would have made a less patient
person throw in the towel years ago. However, a
dramatic evolution in cross-border credit union
finance, pushed by the World Council of Credit
Unions (woccu), is helping ease the flow of
dollars between countries - ideologically as well
as technically. Updike may yet be rewarded for
his patience.
Unlike Canada, where credit unions are
largely community-based, US credit unions
are usually closed-bond, often married to one
employment sector. Some American credit
unions have only a state charter, which prevents
expansion beyond state borders. Others are
federally chartered, allowing a credit union
to open shop anywhere in the US. To serve
sometimes far-flung clutches of members, US
credit unions have shared branching, allowing
members to conduct their financial business at
credit unions around the country. This system
makes sense in light of asset size. A majority
of credit unions in the US hold less than $10million in assets, making new bricks-and-mortar
a poor investment. So, credit unions adopted
'switch' technology, which allows data processing
systems to talk to one another. Members can
conduct financial transactions at about 1,300
institutions around the country. (A small group
of northern Ontario credit unions have a similar
system, but it has generally proven an unpopular,
although much deliberated, system in Canada.)
Updike reasoned that the switch system
could easily work in Canada, and set about
lobbying Ontario regulators to allow him to
open a new Honda Federal branch in Alliston.
He claimed that international legislation
supported his initiative, including the North
American Free Trade Agreement (NAFTA). Inked
in 1992, NAFTA was created to resolve trade
disputes and facilitate cross-border movement
of goods and services between the US, Canada
and Mexico. Updike's initiative is also legally
supported, he says, by California legislation
allowing state-based credit unions to operate
in foreign countries. This, in turn, is supported
by Washington, DC-based National Credit
Union Administration (NCUA), which adminis-
26
ENTERPRISE· JULY 2004
ters federal law, that allows federally regulated
American credit unions to operate internationally.
So why isn't the Canadian credit union
system biting? Updike says there has been a bit
of grumbling about outside competition homing
in on Ontario credit union turf. He argues that
is fallacious, since no credit union has ever tried
to set up in Alliston, a community of about
15,000. And that's something that has Howard
credit union coming into Ontario;' says Guiney,
who was in-house legal counsel for Ontario
Central until 1998 when he entered private practice as a credit union specialist.
There's the rub. The act states that a credit
union from a province or territory in Canada
may register as an extra-provincial credit union,
"but it doesn't say that a Canadian credit union
from a non-Canadian territory or province can
It's no wonder regulators are cross-eyed. Ten------.
provinces, so states
Bogach, the new CEO of Credit Union Central
of Ontario, slightly puzzled. "There are odd
pockets in Ontario where there are no credit
unions, and that's one of them;' Bogach says.
There are other factors weighing against
Updike's proposal, Bogach says. "The Ontario
regulators will look at him cross-eyed:'
It's no wonder regulators are cross-eyed.
Ten provinces, 50 states and the US federal
government each have disparate regulatory
regimes for the credit unions within their
jurisdictions. In Canada especially, legislation
has meant that credit unions operate somewhat
like fiefdoms, preventing them from straying
outside boundaries, especially provincial ones.
Regulations are slowly changing, however.
Credit Union Central of British Columbia,
for example, pushed and received blessing last
May from Victoria for legislative changes allowing credit unions to operate outside the province.
This, says CEO Wayne Nygren, allows the BC
credit union system to operate on an equal footing with insurance and trust companies and
banks. (It would also allow credit unions from
different provinces to merge.)
Updike applauds such moves. "We need to
break down these political borders. Banks have
been doing this for decades;' he says.
Mississauga lawyer David Guiney, however,
says that there is no ducking strict Ontario legislation. That province's Credit Unions and Caisses
Populaires Act "doesn't accommodate a foreign
the US federal govern-
register, so that's the roadblock we come up
against;' says Guiney.
Ironically, it is difficult for any credit union
outside Ontario - not just an American institution - to operate in that province. "It is easier for
a Canadian credit union to expand into the US
than to leap over provincial boundaries, even
though BC has just brought in legislation allowing that, because there still has to be complementary legislation in other provinces for that
to work;' explains Guiney.
A few Canadian credit unions have extended
their services south, however. Ontario's CS Coop Credit Union operates ATMs in Florida in a
joint venture with an American grocery chain.
And Desjardins Federal Savings Bank in Florida's
Pompano Beach was initially created to serve its
Quebec snowbirds.
You can call these initiatives great service,
globalization, or, like woccu, call it strengthening the credit union movement. Steve Schaefer,
woccu's technical officer for Latin America and
the Caribbean, is taking shared branching global.
Spurred by the growing Hispanic population in
the US who send money home to family (an estimated $n-billion a year), woccu has initiated a
switching system that connects to credit unions
in other countries, utilizing a Virtual Private
Network (VPN) through an Internet connection.
All the expensive and sophisticated hardware
required for the switching process is located in
the US. (WOCCU created it with Credit Union
Service Corporation in Georgia.)
The first pilot project is with Ecuador, which,
following a bank crisis from 1999 to 2000, began
using American dollars as its official currency.
An Ecuadorian can deposit a pay cheque in a
US credit union, and the money will appear, in
American dollars, in his credit union account in
Ecuador. WOCCU expects to move into other
Latin American countries when a currency
exchange is built into the system, says Schaefer.
This, he adds, would protect US immigrants
from paying the usurious fees charged by money
transfer companies to send cash or cheques
to a foreign country. "The cost is exorbitant;'
Schaefer says.
WOCCU expects the system will offer more
than simple transactions, including credit cards.
"We would be helping the less affluent countries;'
Schaefer says.
Schaefer supports initiatives that make it
easy for Canadians to have direct access to their
credit union accounts in other countries lil<e
the US. "It's OK for credit union movements to
unite:' Schaefer also dismisses fears that foreign
credit unions will nab Canadian business. "It's
not about one movement getting better than the
other, it's about people helping people:' Shared
branching, he adds, "is just one way of strengthening the credit union movement on a worldwide scale:'
Meanwhile, Updike continues his lobbying
to open a Honda Federal branch in Alliston.
Andy Poprawa, CEO of the Deposit Insurance
Corporation of Ontario, is adamant that the
idea "simply won't fly" without some tweaking.
A branch is possible, with a few compromises
and protections built in, Poprawa says. Updil<e
could set up a credit union using his Californian
computer system, "but the ownership of the
credit union has to remain here with the members in Ontario;' says Poprawa.
Updike, ever the optimist, shrugs. "I've been
working on this so long, it's become second
nature:' E
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JULY 2 004 • ENTERPRISE
27
Diamonds are being unearthed in Canada's North.
Dangling like a carat in front of the credit union system is an
ever-growing need for innovative financial services to serve
those benefiting from the booming economy. by W ill Gibson
BAFFIN ISLAND, in the territory of Nunavut in
northeastern Canada, is as forbidding a landscape
as anywhere in the world. Cape Dorset, home to
about 1,200 people, is one of the island's most
populous communities.
Once an ancient gathering place for hunters and
fishermen, Cape Dorset today is best known for
its artisans, who carve smooth black and jadecoloured soapstone sculptures of Arctic wildlife,
and print lithographs depicting Inuit legends
and every-day scenes that are coveted by collectors as far afield as Tokyo, Paris and New York.
Creating these painstaking works of art has
been a traditional way for the Inuit to while away
Although many Inuit continue to don warm caribou parkas during the seemingly endless winter,
snowmobiles have replaced the husky dog teams
once used to navigate icy terrain. The snowmobiles, in turn, are replaced by three-wheeled
ATVs during the brief, three-month summer.
Another aspect of modernity has long piqued
the interest of the Inuit. When Nova Scotian
Greg O'Neill arrived in Cape Dorset in i988
surprise, he was also asked about credit unions.
How did they work, could one be set up in Cape
Dorset? "They wanted a way to save their money,
as all the money they earned was being spent;'
recalls O'Neill. "They wanted somewhere to put
part of their pay cheque to build a nest egg or
save up for a major purchase:'
Sixteen years later, Cape Dorset's worldrenowned printmakers and sculptors still lack
Although many Inuit continue to don warm caribou
parkas during the seemingly endless winter, snowmobiles have replaced the husky dog teams once
used to navigate icy terrain.
the eternal night that locks in from December
to February. Of further help in coping with the
harsh environment are non-traditional ways of
surviving months of subzero Celsius weather.
as an economic development officer for the
Northwest Territories (NWT) government, he
was continually peppered with questions about
savings accounts and personal loans. To his
the financial services that are taken for granted
by most Canadians. The only way to conduct
one's personal finances is to hop a Twin Otter to
a bank in Yellowknife, nearly 2 ,00 0 km south-
JULY 2004 • ENTERPRISE
31
COVER STORY
west (the same distance as between Vancouver
and Winnipeg). The lack oflocal financial
institutions isn't unique to Cape Dorset; the vast
majority of communities in northern Canada's
three territories: Nunavut, created only five years
ago, Yukon and the NWT, are also devoid of such
services. The only financial services available for
residents outside of Yellowknife is store credit at
the Hudson's Bay Company, Northern Store division, or the local co-op. O'Neill, now manager
African-based diamond giant first reached
sweeping agreements with First Nation groups
on everything from setting targets for employment and business opportunities to environmental management of the underground mine,
scheduled to start production in 2007. De Beers
also agreed to steer a percentage of business to
the territory's four diamond cutting and polishing facilities. The effect of these agreements has
revolutionized the economy in the same way
Ltd., sees credit unions as a logical and natural
extension of co-ops in northern communities.
In addition to selling goods, co-ops have also
operated everything from hotels to cable systems
to construction companies in remote Arctic
communities for more than 40 years. "Co-op
members first directed the leaders of the coop system to begin exploring the development
of a financial institution in the mid-198os;'
says Morrison.
Spectacular diamond finds are transforming the
northern economy beyond its oil-and-gas industry
base and creating opportunities for financial
institutions.
of the Yellowknife-based Arctic Co-operative
Development Fund, believes credit unions are
the answer to this longstanding need in those
communities perched near the top of the world.
While attempts to establish credit unions
in remote Arctic communities have failed as
recently as 1996, O'Neill and other credit union
proponents see a positive sign on the horizon.
Spectacular diamond finds are transforming the
northern economy beyond its oil-and-gas industry base and creating opportunities for financial
institutions.
The NWT now leads all Canadian provinces
and territories in per capita gross domestic
product: $70,900 in 2002, well ahead of Alberta's
$47,991, according to the Conference Board of
Canada. The trend began with Australia's BHP
Billiton - the world's largest mining company opening the $1-billion Ekati diamond mine
300 km northeast of Yellowknife in 1998. The
$2-billion Diavik mine, 300 km northeast
of Yellowknife, started producing diamonds
for London-based Rio Tinto pk early in 2003.
"Between Ekati and Diavik, the diamond industry is worth about $2-billion annually to the NWT
right now;' says Dan Westman, the government's
manager for economic planning in resources,
wildlife and economic development. "Prior to
that, the entire GDP of the territories was less
than $1-billion:'
The economy is poised to continue its
upward trajectory. Last May, the NWT government granted approval to De Beers Group to dig
for diamonds at Snap Lake, 220 km northeast
of Yellowknife. Like Diavik and Ekati, the South
32
EN T ERPRISE ·JULY 2004
that the high-pitched drum of snowmobiles has
replaced the baying of huskies.
Developing financial services is a top priority in Nunavut, also believed to be hording
diamonds deep under its frozen crust. Nunavut
Tunngavik Inc. (NTI), a not-for-profit organization based in Nanavut's capital city of Iqaluit
that administers the land claims settlement for
the Inuit, is looking at creating an institution
to serve the needs of the territory's 29,000 residents. The NT! is currently musing over three
different financial models, including a credit
union, before making a decision.
Two models are based on financial institutions set up by aboriginal groups in southern
Canada. The oil-rich Samson Cree Nation, about
80 km south of Edmonton, started Peace Hills
Trust in 1981. Initially focused on serving First
Nations customers and companies, Peace Hills
now offers everything from mortgages to Interac
services to native and non-native customers
spread throughout British Columbia, Alberta,
Saskatchewan, Manitoba and New Brunswick.
NTI will also look at First Nations Bank of
Canada, established in 1996 by the Saskatchewan
Indian Equity Foundation, the Federation of
Saskatchewan Indian Nations, and the TorontoDominion Bank. The bank's new shareholders
now include aboriginal groups that administer
land claims settlements in Manitoba, Quebec
and Yukon.
Neither a trust company nor a bank, however,
enjoys the backing of the 18,ooo people who
belong to 35 co-ops in Nunavut and the NWT.
Andrew Morrison, CEO of Arctic Co-operatives
Attempts to establish a credit union have
been unsuccessful for a variety of reasons.
One, established in Yellowknife, collapsed in
insolvency in 1980. "They didn't have adequate
management, they were too small and they
didn't have proper controls over their loans;'
recalls Peter Podovinikoff, who was CEO of
Credit Union Central of British Columbia
at the time. "We didn't want to see people lose
money in a credit union because that's something that we prided ourselves on. The failure of
credit unions there would have reflected poorly
on us:'
As a result of that disaster, Podovinikoff, past
president of Envision Credit Union, helped set
up the Arctic Co-operative Development Fund
in 1986 to protect the co-ops from the same fate
that befell Yellowknife Credit Union. The failure
of the credit union, however, was not nearly as
troubling to co-op members as their inability
to get a personal loan in their own communities,
especially since none of the chartered banks
was lining up to provide financial services to
isolated hamlets.
The interest prompted Arctic Co-ops to
commission a former credit union manager
with small-town Prairie experience to develop a
plan for a credit union system in the Northwest
Territories in the early 1990s. Richard Eckert,
of Stoughton, Sask. was a full-time farmer and
part-time consultant who had once run Forget
Credit Union and worked for the centrals in
both Saskatchewan and Manitoba.
Eckert's plan called for 12 credit unions with
a development-oriented central and a mutual
aid depository. The model required $6-million
in capital. "The money was partially committed
to create a fund, which could loan out money
to start a credit union in a community;' Eckert
says. "When the loan was paid down, it would be
loaned out to another community to start a new
credit union:'
Arctic Co-ops, Credit Union Central
of Canada and the Arctic Co-operative
Development Fund together pledged $1-million
in capital and contributions. The NWT and two
federal departments - Industry Canada and
Indian and Northern Affairs - each committed
$1-million after an impact study showed the
economic benefits of providing financial services
in places such as Cape Dorset.
However, NTI did not pony up the remaining
$2-million, a response due more to bad timing
than a lack of interest, says Greg O'Neill. "It
was 1996 and the big issue was the division of
the territories and setting up Nunavut; it really
wasn't a good time for us to talk;' O'Neill says.
With insufficient funding, the other partners withdrew their offer of financial support.
However, the topic never went away. Members
discussed the creation of a credit union at every
annual meeting of the co-op system.
With NTr's renewed interest in forming a new
financial institution, however, Arctic Co-ops
recently commissioned Eckert to write a 50-page
report outlining how a credit union system
could operate today. Unlike his first proposal in
the early i99os, Eckert now sees wireless technology linking the isolated communities to one
or two large credit unions. "I would not recommend a system of a dozen little credit unions as
I did the first time;' he says. "Two credit unions
could serve all the communities with remote
tellers that are electronically linked." The big
thing, he adds, is tellers accessible in real-time
over the Internet.
In addition to modern technology,
Podovinilcoff sees the North as culturally attuned
to credit unions. "Especially among the Inuit,
there is a great sense of community. They've set
up their co-op stores and their cable television
reflectors along those lines;' says Podovinilcoff.
"From my point of view, the logical thing for them
to do would be to set up a credit union that allows
community participation and decision-making:'
NTI's future financial institution, whether it
is a credit union, a bank or trust company, will
have to receive approval from the territorial
governments. Northern residents, be they Cape
Dorset soapstone carvers, diamond miners, or
the people who support these industries through
retail, supply or administration services, will
find their hardscrabble life considerably eased by
a solid financial system like a credit union. Not
to mention how nice the credit union Hands &
Globe logo would look carved in soapstone. !'
For Credit Unions, ATMs are no longer a
competitive advantage-they are a necessity.
Members expect reliable and accessible
ATMs. For years that has meant shelling out
tens of thousands of dollars per machine and
paying for expensive service packages.
CR EDIT UNIONS OU T LAWED
Shortly after Whitehorse Credit
through overdrafts from a char-
credibility, ensured members'
Union closed its doors in 1980,
tered bank . By 1977. the credit
deposits were refunded .
the Yukon government passed
un ion 's accumulated debt had
legislation to prevent credit
skyrocketed to $633 ,000 from
Peter Podivinkoff, past presi-
unions from operating in the
$270 ,000 and the bank refused
dent of Envision Credit Union ,
territory. Almost 25 years later,
to permit the overdraft to grow
that law remains on the bool<s ,
further. The credit union finally
Central 's
CEO
at the time,
also successfully negotiated a
, co ntribution by the territorial
desp ite efforts to bring back a
collapsed under its debt load in
credit union t o that northwestern
1980 when interest rates shot up .
legislative oversight - to repay
Whitehorse 's 900 members
depos itors . Stung, the govern-
corner of Canada.
government - citing its lack of
Whitehorse Credit Un ion
did not enjoy the protection of a
ment immediately passed a ban
st arted in 1957, operating on an
guarantee corporation to protect
on credit unions . However, talks
even keel until 1973 when the
their deposits . However, the
to legalize credit unions are
manager embarked on an aggres-
system nationally, mindfu l of the
expected to begin soon .
sive growth strategy financed
potential damage to credit union
And now Triple DES and SPED compliance
issues threaten to multiply those expenses
further. Fortunately Cashline has a suite of
solutions for you that won't break the bank.
Call us to discuss a custom solution to your
individual needs.
1640 Oak Bay Ave.
Victoria, B.C.
Contact Elva Dieno
604-780-5029
888-870-9780 ext.290
[email protected]
II Triton
A
?
DOVER ) COMNNY
JULY 2004 • ENTERPRISE
33
OFFICE A FF A IR S
Ace that Job Interview
~
An interview shouldn't be a nausea - inducing
interrogation for prospective new employees
or a battle of Wits.
34
ENTER PRI SE • JULY 2 0 04
by LaureenGriffin
IDE ALLY, job interviews are conversations
between employers and candidates, with both
seeking to discover the perfect fit in the jigsaw
puzzle of work. In the real world, interviews
for young and inexperienced job seekers can be
palm-sweating, nausea-inducing interrogations.
For the more mature and experienced, interviews can be a battle of the wits, with each side
trying to ferret out information that the other
may be unwilling to give.
No matter how you hear about a job, from
the paper, a personal contact or a headhunter,
your resume has to pass the jaded eye of the
initial screener. Look up 'resumes' on Google
and you are bombarded with 1,830,000 hits.
There's no excuse for sending in a resume like the
one Ginny Hourihan, executive vice-president
of human resources at Bayview Credit Union
in Saint John, New Brunswick, once received:
"It was handwritten and the first page had only a
badly drawn map and an arrow pointing to the
word 'sucess: " The resume hit the trash basket.
"I get resumes all the time that have no
name on them;· Hourihan sighs, "and canned
resumes, full of things the applicant thinks you
want to hear:' Such resumes, filled out on cliches
and stock phrases, are fairly easy to spot, but
professionally written resumes, exaggerations
and outright lies can be more difficult. The
resume may be the gateway to an interview, but
there has to be some similarity between the real
person and who is being described on paper.
If the resume is professionally designed and
well-written, but the person arrives in blue jeans
speaking a language barely resembling English,
the interviewer's spider sense begins to tingle.
Questions provoked by a resume are often
posed in a telephone interview. Some credit
unions do full-length, pre-arranged interviews
over the phone, while others make short,
unscheduled calls. "In a first conversation, you
are evaluating the applicant's sense of enthusiasm and communication skills;· says Linda
Heep, human resources consultant with Credit
Union Central of British Columbia. Heep,
who does nation-wide executive recruiting for
many BC credit unions, accepts interruptions
and nervousness on unscheduled calls. Other
recruiters are less forgiving. They recall people
who answer their cell phones and carry on the
conversation in a public place, making the interviewer worry about their discretion. Employers
tend to be a jealous lot, and interviewers are
piqued by those who have sent out so many
resumes that they need to be reminded where
they've applied.
There's an old axiom that says the job interviewer makes the decision to hire within the first
60 seconds. Not true, according to Heep. She
qualifies her statement by saying that a professional appearance, firm handshake, eye contact
and use of the interviewer's name do make a
good first impression. If the position involves
sales, especially cold calls, that first impression
carries even more weight. Of course, for every
rule there's the renegade who breaks it and flourishes. Jonathan Powley wore jeans and a baseball
cap when interviewing for a position as loans
officer at Prospera Credit Union in Abbotsford,
BC. Ordinarily a natty dresser, he had been
called for the interview as he was about to leave
for vacation. All his suits were at the dry clean ers. "I didn't want to take the chance someone
else would get the job while I was on vacation;'
he says with a grin. He got the position.
Powley had experience in malting loans
and retail selling, but it was his enthusiasm and
forthrightness that got him the position. Heep
starts every search armed with benchmarks for
that particular position. "There's a list of 'must
have' qualifications and a 'wish list' of abilities
that the credit union would like the candidate
to have;· she says. Over the years, the two lists
have changed. Technical skills used to be the
prerequisites for hiring, but now it is more often
the "soft" skills that are required. "Credit unions
are happier to do the training, because they have
found that skills can be taught, but if the candidate doesn't fit with the team, that's far more
difficult to correct;' says Heep.
The search for that elusive fit has led to a
change in the types of questions asked in interviews. In traditional interviews, the questions
most often begin with 'what are your strengths
and weaknesses and what are your long-range
career goals?' Job seekers learned to answer
these questions in a way that satisfied many
interviewers. Weaknesses were twisted into
strengths ("my impatience means I get the
work done quickly") while career goals meant
saying you wanted to move above the job for
which you were applying.
Many credit unions are now' using behavioural interviewing, asl<ing questions that begin
with "describe a time or situation" and "give
me an example of when you did:' Behavioural
interviewing is based on the premise that past
behaviour predicts future conduct. By inviting
the candidate to tell a story about a time when
he or she missed an obvious solution to a problem or took the initiative on a project, interviewers are able to learn about both technical skills
and personal attributes. As the story unfolds,
the questioner will probe into the role of other
members in the department, the candidate's relationship to those colleagues, subordinates and
superiors, the research that was used to make
decisions and the alternatives to those decisions.
It's hard to li_e or exaggerate through such an
IT'S A BIG MISTAl<E TO ASI< " WHAT'S
THE SALARY? " AT THE BEGINNING OF
ANY INTERV I EW.
inquisition. Gayle Johnson, human resources
manager at Conexus Credit Union in Regina,
remembers one candidate for a manager's position who revealed in a behavioural interview
that the job he really sought was hers. He got
neither position.
In preparation for the search, the employer
will have composed a list of traits that would
make the employee successful at that particular
job in that particular credit union. Although
the levels of competitiveness, analysis, computer
or planning sl<ills can vary from place to place,
most credit unions are lool<ing for team players,
flexibility and good listening sl<ills. "The ability
to develop relationships is far more important
than transactional sl<ills for credit unions;'
says Don Prior, managing partner at headhunting firm The Caldwell Partners International
in Vancouver. Searching for candidates to fill
senior positions at credit unions, Prior looks for
people who have been active in the cooperative
system or the community, or who sit on the
boards of Crown corporations. At lower level
jobs, interviewers are impressed by people who
volunteer at schools and hospitals or for other
community projects.
Prior believes that it is time to re-evaluate
the behavioural interview. He is discovering
that people now expect those types of questions
and come in over-prepared. When a candidate's
answers are far too clever, Prior switches to a
more assertive style, asl<ing a marketing candidate, for example, to analyze a credit union's
recent marketing campaign. He is starting to
use more exhaustive interviews, asl<ing people
to give a lecture or make a presentation, similar
to interviews in academia where prospects are
asked to teach a class.
As candidates, at both the entry and executive levels, become far more adept at giving the
answers that they think employers want, credit
unions and other companies are trying to break
through that fac;:ade in various ways. Personality
tests are becoming very popular. Heep uses the
JULY 2004 • ENTERPRISE
35
OFFICE AFFAIRS
Prevue Assessment, and Hourihan uses a test
from the McQuaig Institute, both of which are
available online. These tests measure specific
skills, such as agility with numbers, work
styles (prefers working alone or with others)
and personal traits like being competitive or
cooperative.
If all else fails, interviewers will sometimes
use 'off the wall' questions to uncover the real
person behind the rehearsed persona. "What's in
your refrigerator right now?''. "what animal are
you most like?", or "what historical person would
you most like to meet?" are asked to break the
ice, inject some humour and see how ably the
candidate thinks under pressure. (Prior admits
he rarely asks these questions.)
Candidates' favourite question, of course, is
monetary. But, as most know, it's a big mistake
to ask "what's the salary?" at the beginning of
any interview. Credit unions want to attract
employees based upon the challenges offered
and for the type of organization they are and the
type of members they serve. Questions about
the strategic direction of the company, its spot
on the financial industry map and the specific
responsibilities of the position should always
precede questions about salary, benefits, vacations or lunch. Actually, don't ever ask the
lunch question.
Prior says that following the collapse of the
World Trade Center in 2001, it became more
permissible to ask about work-life benefits and
the culture of the company. "I started noticing it about six months later;' he says. "People
were asking the questions more frequently and
companies were more receptive to answering:'
Credit unions have a reputation for respecting
the fact that people have a life outside of work,
and most welcome questions about the hours
worked, leeway for childcare and social events.
Even the salary question can be asked at the end
of an interview, especially if it is diplomatically
wrapped up in a bigger question asking about
training, development and benefits.
Honesty and diplomacy will help ace an
interview. Honesty is the most crucial: after the
debacles at Enron and WorldCom, employers can be turned off by even the most minor
discrepancy. Checking resumes and vetting
candidates is so thorough at executive search
firms that Prior compares it to a forensic investigation. "When I watch Law & Order, I think
that's just what I do, but the people I investigate
aren't dead:' ~
36
ENTERPRISE· JULY 2004
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JULY 2 004 • ENTERPRISE
37
IT Girl
l<eeping your IT system secure is a never-ending battle
against the elusive hacker.
Psst! Has your network come under attack lately?
No need to be coy about your answer. It seems a majority of
the world's financial institutions have suffered an external attack
on their information technology systems in the past year. A 2004
Global Security Survey by Deloitte & Touche says that of 100 firms
surveyed, 83 percent reported compromised systems, up from
39 percent just two years ago.
So it's no wonder that digital security firms are laughing all
the way to the bank, so to speak, as they offer up new solutions
and services.
Soltrus Inc. of Toronto, for example, is distributing a new
product from communications security company Protego that augments Intrusion Detection Systems (1Ds). An artificial intelligence
appliance correlates information in all IDS logs, identifying unnatural activity and recommending a solution . "It's very timely," says
Anthony Santilli, vice-president of marketing for Soltrus. "It gives
real time , intelligent information to the network administrator."
At Credit Union Central of British Columbia, sophisticated
IDS pinpoints 30,000 to 40,000 attacks on provincial credit unions
each month . Security staff monitor the IDS logs. "That's one of
the values we bring to our credit unions," says Oscar van der
Meer, assistant vice-president of technology services at BC Central.
While new products like Protego's are useful, he notes that they
can generate a lot of false positives, potentially creating annoying
access problems for bona fide members.
Industry experts say security portals are a good answer to network security. A security portal works just like web banking - it
gives access to the internal network via a web browser with the
38
ENTERPRISE ·J U LY 200 4
by Diane Luckow
same level of encryption and highe r levels of authentication security. It's a great improvement over Virtual Private Network (VPN),
which many credit unions use for remote access, since there are
ways for hackers to bypass network sensors and penetrate right
into the cred it union network.
Three years ago, BC Central introduced a security portal,
called CPS, for credit union staff using Central 's systems and,
more recently, for the business member version of its MemberOirect™ services .
Technology is only one aspect of the security solution, however. "Most important is the human impact on the network internal threats," says Santilli, citing the importance of corporate
controls and policies . Digital security guru Glen Christopher, who
will speak at the World Council of Credit Unions international
conference next month in Nassau, Bahamas, says that 70 percent
of all hacking activity takes place internally, with employees, contractors or others taking advantage of network access to probe for
passwords, then misuse or compromise information. "Tools alone
won't save any organization," says Christopher. "It has to be a
combination of tools, business processes, and employee education."
There is no perfect solution for network and Internet banking
security, adds van der Meer, because of a fundamental flaw passwords alone don't provide enough security. In Europe, he
says , financial institutions have issued their customers with smart
cards and smart card readers in addition to requiring passwords,
bringing security to a higher level with two-factor authentication.
What is needed in North America, says van der Meer, is a similar
level of authentication for online banking. ~