Facing the departure of the only bank in Tamworth on July 11, a group of concerned citizens are lobbying Canada Post to adopt postal banking.
The group was formed shortly after news broke last November the Canadian Imperial Bank of Commerce (CIBC) located at the four corners on County Rd. 4 would cease operation in July, removing its automated teller machine in the process. The solution proposed by some residents would see the Tamworth post office relocate to the soon to be abandoned CIBC building, which is already equipped with pertinent banking features such as a vault, and operate as a dual post office and bank. Residents would then be able to cash a cheque from the same place they buy stamps and mail their letters.
Led by local business owners, the push for postal banking has support from the Canadian Postmasters and Assistants Association (CPAA).
National CPAA president Brenda McAuley notes this idea wouldn’t be a reinvention of the wheel so to speak, as postal banking existed in Canada way back in 1868.
“The reason we lost postal banking in the first place was because big banks were lobbying the government to get us out of them because we were competition,” said McAuley. “What happened was the big banks moved their branches into the small rural communities, now they’re pulling out.”
Tamworth isn’t the only village facing the loss of its only financial institution.
“There’s over 1,200 rural communities in Canada that have no financial services whatsoever,” said McAuley. “Those folks are travelling long distances to get to a bank. The large majority of population in rural Canada are seniors. It’s problematic for them because they’re on the road and it’s problematic for the communities because if you lose your bank in the community, you might lose a few small businesses as well.”
McAuley says Tamworth fits the bill as an ideal location to run a pilot project to help lead the return of postal banks in rural communities. She recently paid a visit to the village to meet with the group lobbying for the merger.
“I got to take a look around (in Tamworth),” she said. “I could not believe how the community has mobilized. I think it’s a brilliant idea. It’s a fabulous community serving a population of 7,000 around the immediate area. They’re really smart to be wanting to do this because if people are going to go outside the community to bank, they’re going to start doing other shopping too.”
Though postal banks began disappearing in 1968, the legislation originally written over 150 years ago to legalize them was never repealed. That means one less hoop to jump through should they want to revive it in Tamworth.
“We do banking anyway,” added McAuley. “We do money orders, we do prepaid Visa cards. We have the foundation. Everyday we’re doing transactions constantly.”
The CPAA enlisted the help of John Anderson, a researcher and consultant hired by the Canadian Union of Postal Workers and CPAA, to put together a study to outline the viability of postal banking.
“An incredible number of (rural communities) did not have a bank or credit union,” said Anderson, who contacted post offices outside of Canada’s biggest cities. “Over 40 per cent.”
Anderson says several European nations have recently adopted postal banking and they’ve been well received.
“The Post Office is the largest retail chain in Canada,” said Anderson. “Much larger than McDonald’s or anything like that. There are locations in most small and medium sized communities in Canada. We’re already paying for the infrastructure, and the Post Office has been very profitable recently when you look at their annual reports because there’s been a huge increase in parcel deliveries. So we could conveniently offer banking services at these locations. I know from looking at the postal banking in other communities like France and the United Kingdom, both of them have successful postal banking on different models. What they did was simply to train the existing staff and to hire some staff centrally….To develop postal banks would not be that difficult and other countries have done it.”
Not every study supports the postal banking initiative, however.
Hastings-Lennox and Addington Mike Bossio says although he wouldn’t discourage the group from pursuing a postal bank, his research shows its not likely to happen.
“It’s something I was supportive of and right after the election there was a number of people who approached the government and said ‘we need to study this’ and we did,” said Bossio. “They formed a specific committee to study the future of the Post Office and the many different uses and where it’s going. They did an exhaustive, I think it was a year a half study. The committee travelled across the country and met with many different organizations, stakeholders, individuals, municipalities, etc. Unfortunately after that exhaustive study, and I put a lot of pressure on them, they said ‘Mike, there’s just no plan to get us there given the nature of changing banking systems.’”
Bossio pointed to the investments they’ve made in broadband upgrades so residents can do online banking as an alternative to brick and mortar banks.
“I even begged them, I said if you’re going to close, at least make sure there’s a banking machine there for people who do need to make deposits and withdrawals and they wouldn’t even agree to that,” Bossio said of talking to CIBC representatives. “They said it was cost prohibitive to put in a machine given the amount of volume it would do. It’s unfortunate, but it’s really a dollar and cents issue at the end of the day.”
“In light of that, that’s why I focused so much of my attention the last three and a half years to get this huge investment into broadband infrastructure,” said Bossio.
Further complicating matters is the fact they’d need Canada Post on board, which isn’t the case at the moment.
“Canada Post currently offers financial services in the form of postal money orders and digital remittances through its partnership with MoneyGram,” Canada Post’s media relations department responded via email. “We are always looking at possibilities related to the current financial services we provide, but have no plans to expand our offering at this time.”
Despite this, the community group plans to keep lobbying for postal banking and will look to continue to rally community support.