. By JEFF NAGEL
CREDIT UNION officials in

Prince Rupert. deny their expan-.

sion to Terrace constitutes a raid,

Northern Savings Credit Union |

announced : last. Thursday. they
_Will-go into, competition with, the

Terrace District Credit Union

here in, carly 1996, -

But officials , at both credit
unions say they don’t sce it as a
confrontational situation.
Sayings’, "president
Mike. Tarr: says. his ‘credit union
has concluded: it must expand and
grow to remain competitive i in the
financial service business. |

Tougher competition" * from
banks in recent years has cut into
profit ‘margins: and at the. same
time increased the costs required
to provide ‘the services ‘customers
demand, ‘Tarr says.

Their: present markets in Prince

Rupert and’ the: Queen Charlotte

Islands. are mature,. with: little -..

scope for growth, he said.
_The- only: logical place to ex-
pand’ to. was’ Terrace, he said,

where:the credit. union projects .

strong potential for growth.
‘There's. a: vitality: there,” Tarr

said,. “‘A. sense ‘that this: place is.

going to be:the service centre for
the. region: that I. think allows an-
other financial service provider to
come in,’?

What. “Prince. Rupert. really -
wanted is’ to, amalgamate with |

Terrace, 2-3: ‘

But. Terrace District. Credit :

Union «; -board~’ chairman -Jim

Mantel“ says the: Terrace credit - :
union-has decided to remain inde--

pendent for now, although he

docs not rule out amalgamation at.

some time in the future, ;

-Both.- Mantel’ and Tarr preidict

they may be able to co-exist
peacefully and cooperatively, be-

cause Northerg: ‘Savings has.a dif,

a) ha

ferent ‘fortis, aimin,

added.
‘do that.’ ,

ng more . cat.

Second credit union coming

CUSTOMERS at the Terrace District Credit Union

and other local banks — will have another choice when Prince

Rupert's Northern Savings Credit Union opens & branch here.

clients, than individuals...
“They” Te going to be more in
competition with | the
chartered ‘banks,. more. so ‘than.
with us,’ Mantel sald of North-
em Sevings. .
“7 think #0 work out,” he

added. “I don’t see it as a threat.
' Its a-bit of a concern-to us, yes,

but it’s not @ threat’? .
“We are not targeting the Ter-'
race credit union’s. members in

any way shape or form,”’ Tarr’,
“We'll be careful not to’

. “Terrace has a very loyal mem-

» bership, We. would be foolish to
do anything to iry to disturb those:

relationships.”
. Terrace has 4, 600 members and
‘more than $30 million in assets.
Northern Savings has 14,000.

Members and $160 million in in as.

sets,

Over. the Jong. ‘teem; Tar

_remains convinced’ credit ‘unions:

will be forced by circumstance to
join together into larger units,

_ Banking is a high-volume. busi-

ness, he says, and. smaller,volume.

‘operations will simply be ‘unable:
phar

. Wed n't. th sn have ft

_ other.

Northern Savings was formed
in’ 1987 when Kaien Consumers
Credit Union bought amal-
gamated. with Prince’ Rupert
Fishermen’s Credit Union. Kaien .
had bought out three small credit ©
unions on the Queen Charlotte Is-
lands in the 1960s.

The number of credit unions in
the” province has shrunk from
more than 200 to about 100, and
Tarr expects the number will con-
tinue to get smaller as pressure to
amalgamate increases.

“The trend is definitely towards
more consolidation,”? he said.

But the bigger and more bank-
like. credit. unions become, the
further they get from their roots,
alienating * the ‘local ‘customers
they were formed to serve.
’*There’s a very real danger of
that happening,” Tarr conceded.

“Tf credit unions fall into that
trap, we'll deserve what it happens
tous.”

“If getting bigger means get-

ting more like a-bank that’s a bad

"strategy and I think we'll suffer

for it?’

| Tarr says credit unions must
itay “close to! ‘their ‘customers to**
eir it

successfully than the banks,
‘That's our edge,”” he says.
Tar says  they’ve got a

: preferred Location for thé ‘new
credit union in Terrace, but won't

disclose it until a deal on the
building has been closed.

Although Northern Savings also:

owns two subsidiary insurance
agencies — Northern Savings In-
surance Ltd. and Gillam Insur-
ance Brokers — Tart said they’ve

' got no plans to sell insurance at
- the location.

“JE we got involved in insur-
ance in Terrace -—— and that’s a
big if — we'd look at a separate

~ startup,”’ he said,

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