Tuesday’s announced amalgamation of Meridian and Desjardins Credit Unions could be a win for mortgage customers.
Pending regulatory and member approval, these two CUs will become one on June 1. Meridian will pick up $1.4 billion in assets, 19 Ontario branches and 50,000 members in the deal. Meridian is already the largest credit union in Ontario (and 4th largest in the country).
From a mortgage perspective, the move could help Meridian offer even better mortgage rates (due to scale-based cost savings) and spawn new products.
We hear, for example, that Meridian may start selling Desjardin’s readvanceable mortgage. That product, which is currently sold only through branches, could also become available in the broker channel.
Speaking of the broker channel, a source tells us that status brokers at Meridian will eventually get higher compensation and appraisal rebates. Another welcome change will be accessibility. Desjardins’ technology will be adopted by Meridian, giving brokers a way to electronically submit applications via D+H Expert.
The technology implementation could take a while, however. Meridian says, “We anticipate that system conversion and other work to fully integrate Desjardins Credit Union with Meridian will be completed by summer 2012.” Let’s hope their mortgage systems are integrated much sooner.
After the deal closes, the Desjardins name is expected to disappear in Ontario, giving way to the Meridian brand. (Note: Desjardins Credit Union is separate and autonomous from Desjardins Group, the country’s largest financial co-operative.)
Consolidation has been a trend with CUs. As a result, the number of Canadian credit unions dropped from 425 to 396 in the 12 months ending Q3 2010.
“The sky’s the limit” for Meridian’s growth, CEO Sean Jackson told CBC. Once regulations emerge permitting inter-provincial credit unions (possibly later this year), it could trigger sizable mergers that create nationwide mega-CUs. Many think Meridian could be a part of that trend.