Thank you very much, Mr. Chairman and committee members. I want to thank you for this opportunity to appear before the committee as part of your study on ATM fees.
My name is David Phillips, and I'm president and CEO of Credit Union Central of Canada, commonly known as Canadian Central.
Canadian Central primarily represents the nine provincial credit union central organizations in Canada, and through them 498 credit unions. I should point out that these credit unions are situated in all provinces of Canada except Quebec. We do not represent the caisses populaires of Quebec.
I would like to limit my opening remarks to three specific points. Two of these are points of contrast with the banking industry, and the third I suspect is a point of similarity. The first point of contrast is the existence of surcharge-free, inter-credit-union networks in the credit union system. Unlike the large commercial banks, individual credit unions, being community-owned financial institutions, typically do not have large and extensive branch and ATM networks. For this reason, and for competitive reasons, credit unions participate in ATM networks that provide their members with surcharge-free access to cash withdrawal services on a national basis. One of these networks is known as Acculink. Acculink is a credit union only network. It is comprised of 435 credit unions and provides access to approximately 1,700 ATMs on a surcharge-free basis across Canada.
You heard about a second surcharge-free network this past Tuesday, and you've heard about it earlier today, known as the Exchange network. Many credit unions participate in this network, along with a few banks. Through participation in one or both of these networks, and depending on the credit union of which you are a member, credit union members will have surcharge-free access to between approximately 1,700 and 2,700 ATMs on a national basis. This is an important service to members, which enables credit unions to maintain competitiveness with the ATM networks of the large banks.
A second point of contrast between credit unions and the banks is the manner in which credit unions set service fees for the financial services obtained by their member customers, including ATM access fees. Unlike the large commercial banks, which typically design and offer fee packages on a national basis, the credit union system is comprised, as I've said, of 498 credit unions, each of which design and provide their own fee packages separately and independently in the communities they serve. Since the array of packages is so vast, it is not possible to generalize about the nature and level of service fees that credit unions might charge their member customers for ATM access.
However, it is worth noting that the customers of credit unions are also the members and the owners of their credit unions. They annually elect the boards of directors of their credit unions. So if credit union members have views about the fees charged by their credit unions--favourable or unfavourable--they have a very direct way in which to assert these views at the level of the board of directors and senior management of the credit union.
I believe my third point is a point of similarity with the banking industry on the subject of efficacy of government regulation in this area. Currently the ATM surcharge, where it exists, is a fee that is both transparent and it is usually avoidable. In our view, regulation aimed at limiting surcharging is likely to undermine these aspects of the fee and would probably reduce the availability of ATM services to the Canadian public. We are not persuaded that the regulation of ATM fees would achieve positive results.
This concludes my remarks, Mr. Chairman. I'll be happy to answer any questions on this subject.