A desire to be more efficient, competitive and vocal at the national level has driven the credit union centrals in Nova Scotia, New Brunswick and Prince Edward Island to merge, effective Jan. 1.

“There are opportunities here to remove duplication of efforts and redirect resources to do such things as product development,” says Bernie O’Neil, president and CEO of the new Atlantic Central and past president and CEO of Credit Union Central of Nova Scotia.

Streamlining operations and redirecting resources will make credit unions more competitive. Adds O’Neil: “New products and services will evolve in 2011.”

In particular, there will be greater emphasis placed on Internet banking and use of the credit unions’ online brokerage network, as well as a review of products and services not currently being used or used consistently.

Atlantic Central will serve 61 credit unions and 340,000 members with combined assets under administration of $3.5 billion. The combined entity does so with the blessing of the Maritimes provincial governments. Before the credit union centrals in the three provinces could formally join forces, legislative changes were required.

Those changes were not simply perfunctory, says Nova Scotia Finance Minister Graham Steele: “The amendments made in the fall to the Nova Scotia Credit Union Act represent a systemwide change to provide member credit unions … with the benefits of a larger, more diverse and more cost-effective trade association.”

Specifically, Steele notes, the changes enabled the Credit Union Central of Nova Scotia to change its name to Atlantic Central and acquire the credit union centrals of New Brunswick and Prince Edward Island, accept credit unions in the other two provinces as members and provide services to these credit unions. (Credit unions in New-foundland and Labrador will also be served by Atlantic Central; that province did not have its own credit union central.)

The merger is the second major amalgamation of credit union centrals in Canada. In 2008, the Credit Union Central of British Columbia and the Credit Union Central of Ontario merged and became Central 1 Credit Union. Says Art Chamberlain, Central 1’s media relations manager in Toronto: “We saw a chance to provide a broader range of financial services to credit unions.”

That goal has been attained, he believes: “There is every indication people are happy.”@page_break@Although the merger of credit union centrals has not been common around the world, it is becoming a trend, says Ian MacPherson, founding director of the British Columbia Institute for Co-operative Studies at the University of Victoria.

One reason for this trend, he notes, is the relaxing of provincial laws to allow for cross-border provision of financial services.

Another reason: communication. “Credit unions are very much tied to communication,” says MacPherson. “Initially, they were highly local because that’s how communication tended to go.”

Today, mergers may mean better business. “We see it as a logical direction for the centrals to move in,” says Chamberlain. “Down the road, it makes sense to have one central across the country. But that will not happen anytime soon.”

Still, O’Neil notes, “There are those who believe a national entity should be pursued.”

That pursuit, he points out, has been bolstered by federal legislation that enables credit unions to operate as banks and provide services across provincial borders. Says O’Neil: “There is a lot of change in the wind.”

Yet, some things stay the same — by choice. The three credit union centrals in Manitoba, Alberta and Saskatchewan had recently explored the option of merging but rejected it. “In some ways, that is surprising,” says MacPherson, “but it had a lot to do with provincial attitudes.”

It also may reflect the seeming friction between bigger business and the co-op philosophy. Adds MacPherson: “The problem with mergers is how well will people who are involved struggle to retain a connection to the local.”

Chamberlain and O’Neil both believe the battle to retain that connection has already been won. “Providing local service is part of the credit unions’ DNA,” says Chamberlain, “and we’re unlikely to stray too far from this. We are member-controlled.”

O’Neil points out that “local issues were on the table at all times” during the merger discussions in Atlantic Canada: “We’re very conscious that credit unions have to remain committed to their local communities.”

Despite the emphasis on the local, Atlantic Central is looking to its larger presence to carry more weight at the national level, says O’Neil: “We speak much more strongly as a region than individual voices.”

For now, though, the emphasis is closer to home as Atlantic Central is in the process of getting its house in order. All employees of the three former centrals (except for New Brunswick’s and P.E.I.’s CEOs) have been offered positions. Atlantic Central’s head office has been established in Halifax.

Secondary offices are up and running in Moncton and Charlottetown. There also are plans to establish an office in Newfoundland later this year. IE