Credit Union CEO on helping those who need it most

Meridian Credit Union brought CEO Jay-Ann Gilfoy on board in January with the goal of steering it back to its grassroots.

Meridian is Ontario’s largest credit union and a financial juggernaut with roughly $28.5 billion in assets under administration and 365,000 members. It also owns motusbank, a national digital full-service bank, and Meridian OneCap Credit, a business leasing and financing outfit. But Gilfoy says the credit union was starting to look more like an imitation of Canada’s big banks rather than an alternative.

Credit unions were formed in Canada as a way to secure financing, especially for farmers, when the big banks simply wouldn’t offer them a loan. Instead of relying on a for-profit banking institution, these credit union pioneers created non-profits where members owned partial stakes in their financial institution. “Saying yes — perhaps when others would say no — that’s the whole genesis of the credit union movement in this country,” Gilfoy says.

Today, reliable access to credit is a hot commodity amid rising interest rates, cost-of-living hikes, and fears of a recession. But Meridian wants to be much more than just a lender. It wants to address some of Canada’s most persistent social and economic problems — lack of affordable housing, the difficulties Indigenous communities face participating in Canada’s economy, and the problems small and medium-sized enterprises have securing financing.

Gilfoy spoke to the Star about her arrival at Meridian Credit Union from Vancity Community Investment Bank, living and working at opposite ends of the country, and how Meridian plans to weather the rocky financial waters ahead:

Your family is in B.C., but you’re currently running the largest credit union in Ontario. Do they plan on moving east?

I am a woman with a foot in both provinces. Half my family is here, and half my family is there. I grew up in Brampton. I’m from here. And then my partner, and my daughter and my stepdaughters are out on the West Coast. So I am a product of this new world of hybrid working. I was able to do 17 meetings and meet all 2,000 employees when I first joined Meridian in January, which I would never have been able to do in a physical world. So I’m really trying to lean into this world where you don’t have to be physically in a location to do your job.

You were at Vancity Community Investment Bank before Meridian. What did you feel you could accomplish here that you couldn’t at Vancity?

Vancity is a West Coast credit union with a national bank licence. My role was to lead the rebirth of the bank — it was one of Canada’s first online banks back in the ’90s. It was called Citizens Bank. It wound down in the crisis of 2007. But we kept the shell of the bank and reinvigorated it about five years ago. The idea is that we would be Canada’s first socially conscious bank that could do commercial lending for things that are good for people and planet. I loved that job. It was so fun.

It was difficult, coming to Ontario, starting a new brand, moving into in the heart of the financial sector of Canada, really trying to make our mark. It’s not easy for a small bank like Vancity to get off the ground and running. There are lots of things you need to do, but I loved the experience. I saw a lot of opportunity here.

I felt like I could do more by being in a larger organization, and one that was based in Ontario because I do love Ontario. My roots are here. I love the energy of being in Toronto. For me, it was about taking that platform that I built for Vancity and really amplifying it with the size of Meridian. When you go from maybe a $1-billion organization to a $26-billion organization, it gives you more opportunity to be more purposeful and in a bigger way.

What groups in Canada do you think have difficulty accessing traditional banks today?

Spaces that are run by women or run by people who have been historically disadvantaged — Indigenous communities, Black communities, newcomers to Canada — and small and medium-sized enterprises. We dealt with them all the time at Vancity, and we deal with them at Meridian where they get up and running and there’s seed capital and a grant they can get — and then they fall into a big divide where they can’t get loans.

Our purpose is to help our members live their best life. The genesis behind that is really about financial literacy. Resiliency comes when you can help educate people on how to access money, how to get money, how to use money in a way that serves them.

We’ve got to make sure that money is flowing to those areas of the economy that have been hit harder, or don’t have the advantages of others that have been around for a long time or come from a white background. I think there’s a big way for us to influence that network.

I also think that lots of not-for-profits are trying to do the right thing, and they struggle with trying to find the financing to build affordable housing, community support, or acquiring a piece of property — an asset that they can build their base off. I think there’s great opportunity for us to help there.

Indigenous businesses and homeowners on reserve find it difficult to get financing or take out a mortgage. Is that something you’re looking at doing for them at Meridian?

We are working with a few Indigenous nations today, helping on affordable housing and their own asset portfolio. I definitely see us doing more of that. It will be a key pillar of our “go forward” strategy. We’ll be able to help in that Black, Indigenous, and People of Colour space.

I’m on a personal journey around Indigenous Reconciliation, for sure. I’m on a board of an Indigenous Economic Development Corporation in B.C. We’d been on a path at Vancity for many years, adopting reconciliation as a value and leading the charge in B.C. I’ve connected with a number of Indigenous nations here in Ontario. We were doing some lending for clean energy with Indigenous communities. I absolutely want to help them get to self-sufficiency and sustainability and claim their rightful place in the Canadian economy.

I’ve noticed that ESG (environmental, social and governance) is something you’re personally passionate about, but ESG is not having a great moment right now. There’s a fair bit of criticism that it is ineffective. How will you make Meridian stand out here?

For me, success is measured by how many units of affordable housing we’ve been able to finance, or how much we’ve been able to reduce the carbon footprint of our own operation, or how much we’ve helped the organizations we help finance transition to clean energy. It’s as much about following your own standard as it is the real economy.

What’s the incentive for you to get involved in financing affordable housing?

As a community-based organization committed to helping communities thrive and grow and prosper, that includes helping solve issues like affordable housing. Last year, we financed about $40 million of lending for affordable-housing projects. We’re looking into how we do more on the retail mortgage side through the co-ownership models that are out there.

I think it’s just the right thing to do. We’re not going to make a lot of money off it, but we’re make enough to make it a sustainable portfolio. There are private-sector players, there are co-operative organizations, and not-for-profits who are trying to address affordable housing. And I think we can play a role there.

Credit unions with high-interest savings accounts could do well right now. How competitive is motusbank on that front?

Our members and customers wouldn’t bank with us if we weren’t in the competitive sphere. We’ve built some unique features into some of our savings’ products where we’ll let you know when the interest rate changes — and then you can move your money into a higher-rate savings account. We’re looking at how we position our social purpose up against our GIC and savings portfolios. But we are definitely in a competitive sphere.

How does the current financial roller-coaster — inflation and concerns of a recession — affect the long-term vision you had when you stepped into this role?

It might mean we don’t go wild on advancing our growth agenda — that we are more purposeful and keeping our foundation strong. The nice thing about being in a credit union is that we can have a long-term view, because our shareholders are our members.

We can take care of our members and we watch how our retail and commercial leasing portfolios are faring right now in terms of delinquency, but we’re a viable financial institution. We’ve got good liquidity, we’ve got good capital, we’ve got good income to weather the storm — and our job will be to help our members weather it.

This interview has been edited for length and clarity.

Brennan Doherty is a former staff reporter for Star Calgary and the Star’s 24-hour radio room in Toronto. He is now a freelance contributor.