Credit Union CEO to help those who need it most

Meridian Credit Union recruited CEO Jay-Ann Gilfoy in January in a bid to bring her back to basics.

Meridian is Ontario’s largest credit union and a financial behemoth with approximately $28.5 billion in assets under administration and 365,000 members. It also owns motusbank, a national full-service digital bank, and Meridian OneCap Credit, a leasing and finance company. But Gilfoy says the credit union was beginning to look more like an imitation of the big Canadian banks than an alternative.

Credit unions were created in Canada as a means of obtaining financing, particularly for farmers, when the big banks simply refused to offer them a loan. Instead of relying on a for-profit banking institution, these credit union pioneers created non-profit organizations in which members held partial equity interests in their financial institution. “Saying yes — maybe when others would say no — is the whole genesis of the credit union movement in this country,” says Gilfoy.

Today, reliable access to credit is a rare commodity in an environment of rising interest rates, rising costs of living and fears of a recession. But Meridian wants to be more than just a lender. He wants to tackle some of Canada’s most enduring social and economic problems — the lack of affordable housing, the struggles of Indigenous communities to participate in the Canadian economy, and the problems small and medium-sized businesses face in obtaining financing.

Gilfoy spoke to The Star about joining Meridian Credit Union from Vancity Community Investment Bank, living and working on opposite ends of the country, and how Meridian plans to navigate the tough financial waters ahead:

Your family is in British Columbia, but you currently run Ontario’s largest credit union. Are they planning to move east?

I am a woman with one foot in both provinces. Half of my family is here, and half of my family is there. I grew up in Brampton. I come from here. And then my partner, my daughter and my daughters-in-law are on the west coast. I am therefore a product of this new world of hybrid work. I was able to do 17 meetings and meet all 2,000 employees when I joined Meridian in January, which I could never have done in a physical world. So I’m really trying to lean into this world where you don’t have to be physically in a place to do your job.

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

Vancity is a west coast credit union with a national banking license. My role was to lead the rebirth of the bank — it was one of Canada’s first online banks in the 1990s. It was called Citizens Bank. It died out during the 2007 crisis. But we kept the bank envelope and reinvigorated it about five years ago. The idea is that we would be the first socially responsible bank in Canada that could make commercial loans for things that are good for people and the planet. I loved this job. It was so much fun.

It was tough coming to Ontario, launching a new brand, moving into the heart of Canada’s financial sector, really trying to make our mark. It’s not easy for a small bank like Vancity to get started and run. Lots to do, but loved the experience. I saw a lot of opportunities here.

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

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

Spaces led by women or led by historically disadvantaged people—Indigenous communities, Black communities, newcomers to Canada—and small and medium-sized businesses. We’ve dealt with them all the time at Vancity, and we’ve dealt with them at Meridian where they get up and running and there’s seed capital and a grant that they can get – and then they fall into a big ditch where they cannot get loans.

Our goal is to help our members live their best life. The genesis behind this is really about financial literacy. Resilience 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 need to make sure that money flows to sectors of the economy that have been hit harder or don’t have the benefits of others who have been around for a long time or who come from a white background. I think we have a great way to influence this network.

I also think a lot of non-profits are trying to do the right thing, and they’re struggling to find the funding to build affordable housing, community support, or buying property – asset that they can build their base disabled. I think we have a great opportunity to help there.

Aboriginal businesses and homeowners on reserve are having difficulty obtaining financing or taking out mortgages. Is this something you plan to do for them at Meridian?

We work with a few indigenous nations today, helping them on affordable housing and their own asset portfolio. I definitely see us doing more. This will be a key pillar of our “going forward” strategy. We will be able to help in this Black, Indigenous and Colored space.

I’m on a personal journey around Indigenous reconciliation, that’s for sure. I sit on the board of an aboriginal economic development corporation in British Columbia. We had been on the right path at Vancity for many years, embracing reconciliation as a value and leading the charge in British Columbia. I have connected with a number of Indigenous nations here in Ontario. We were doing clean energy loans with aboriginal communities. I absolutely want to help them achieve self-sufficiency and sustainability and claim their rightful place in the Canadian economy.

I noticed that ESG (environment, social and governance) is something that you are personally passionate about, but ESG is not having a big moment right now. There are quite a few reviews that it is ineffective. How will you make Meridian stand out here?

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

What motivates you to get involved in financing affordable housing?

As a community organization committed to helping communities thrive, grow and prosper, this includes helping with issues like affordable housing. Last year, we financed approximately $40 million in loans for affordable housing projects. We’re looking at how we can do more on the retail mortgage side with the condominium models that exist.

I think it’s just the right thing to do. We’re not going to make a lot of money out of it, but we’re earning enough to make it a sustainable portfolio. There are private sector players, there are co-ops and not-for-profits trying to find affordable housing. And I think we can play a part in that.

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

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

How does the current financial roller coaster – inflation and fears of a recession – affect the long-term view you had when you took office?

It could mean that we are not pushing our growth agenda forward – that we are more focused and keeping our foundations strong. The advantage of belonging to a credit union is that we can have a long-term vision, because our shareholders are our members.

We can take care of our members and we monitor the current status of our commercial and retail lease portfolios in terms of delinquencies, but we are a viable financial institution. We have good liquidity, we have good capital, we have 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.

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