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The LaHave River Credit Union in Bridgewater, NS. Photo: LaHave River Credit Union.

Lahave River Credit Union faces controversial takeover bid by East Coast

By Evan Taylor Sep 6, 2023 | 12:52 PM

Bridgewater, Nova Scotia – In a startling development that has sent shockwaves through the Nova Scotian financial community, the Lahave River Credit Union, a longstanding institution with deep community roots, is now the target of a takeover bid by the largest Atlantic Canada credit union, East Coast. While supporters refer to it as a merger, the vast difference in size between the two entities has some likening it to “a mouse sleeping with an elephant.” The merger recommendation comes from an unelected board of directors appointed by CUDIC, the government regulator of credit unions, which took over the management of Lahave River in March 2021 and dismissed the CEO and the elected board at that time. The vote for the merger, which could potentially mark the end of a locally owned and managed credit union, is scheduled for September 18th to 28th.

Founded by Lunenburg residents in 1955 as a grassroots alternative to the big banks, Lahave River Credit Union has remained independent and autonomous, accountable only to its members. This unique structure has allowed the credit union to respond swiftly and effectively to local needs and play a pivotal role in community economic development initiatives. During periods of economic uncertainty, Lahave River has provided loans to members and businesses when traditional banks might decline. Furthermore, the credit union has the flexibility to create tailored loan repayment options and accommodate specific needs.

In stark contrast, East Coast operates more like a traditional bank with its centralized decision-making process and a large board of directors. The merger’s official website promises “positive benefits for members” including enhanced services, an expanded product portfolio, digital offerings, and improved member support, all at more competitive rates and fees. The rationale behind the merger, echoing the ‘Bigger is Better’ sentiment, emphasizes operational size efficiencies. However, critics argue that Lahave River already offers services on par with East Coast while maintaining a higher level of profitability and efficiency relative to its size.

A crucial aspect of the merger under scrutiny is the financial strength of each credit union. Lahave River has consistently generated annual surpluses for over two decades, resulting in annual rebates to its members based on their loan volumes and deposits. This is not a standard practice at East Coast. Additionally, Lahave River has amassed millions of dollars in retained earnings, which have accumulated from its annual surpluses and rightfully belong to its members. Critics contend that these retained earnings, which amount to almost $6 million, could have been designated in the merger agreement for the exclusive benefit of Lahave River members. However, in the recommended merger agreement, these retained earnings will simply vanish into a line item on East Coast’s balance sheet.

This proposed merger has ignited a spirited debate within the community, with many Lahave River Credit Union members expressing concerns about the potential loss of local autonomy, community-focused decision-making, and the redirection of their credit union’s hard-earned earnings. The vote scheduled later this month will determine the fate of Lahave River Credit Union, an institution deeply woven into the fabric of this community for nearly seven decades. While some see this as a necessary step towards growth and efficiency, others are wary of what may be lost in the process.

It remains to be seen whether Lahave River’s legacy as an independent, community-driven financial institution will endure or if it will indeed merge into the larger East Coast entity, forever.


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