Northern Birch Credit Union

community first banking at its heart

With strong connections to the Estonian & Latvian communities, Northern Birch Credit Union puts the financial needs of its members first

For Northern Birch Credit Union, its members always come first. As a cooperative financial institution, the credit union only answers to its members, who are also its owners. With that in mind, Northern Birch is committed to putting its members’ needs at the heart of its business model. Boasting three branches located throughout southern Ontario, Northern Birch also offers a strong community and cultural history.

That’s because Northern Birch was founded through the merging of the former Estonian & Latvian Credit Unions in Toronto. Brought together through a shared cultural focus, the two ethnic credit unions merged and became Northern Birch Credit Union at the start of 2020. As separate credit unions for many decades, the Estonian and Latvian credit unions had established roots dating back to post-World War II immigration in and around Toronto.

Today, Northern Birch remains a pillar of the Estonian and Latvian communities with a strong emphasis on cultural heritage, service, and financial health. Many of its members go back multiple generations, but the credit union is growing among other demographics too and is open to all Canadians.

Because of its community focus and the personal attention provided to members, Northern Birch Credit Union can boast of very high member engagement scores. As a credit union rather than a bank, there are no investors or pure shareholders to impress.

“We know our members and communities extremely well,” says Northern Birch Credit Union President and CEO Anita Saar. “Not only that but we know (our members’) parents, children, and the businesses they own.”

While Northern Birch makes lending decisions based on strict underwriting criteria, it also considers the unique circumstances of members looking for a loan. According to Saar, “we are here to help our members find a solution, and we will work with them to accomplish that.”

Northern Birch has largely built its reputation and high levels of member satisfaction on two main goals. First is to advance the financial health of its members by offering an array of financial products at competitive rates while always looking to support members’ immediate and long-term needs. Credit union employees work with their members to discuss financial scenarios and options that support those needs.

The second part of Northern Birch’s mission is to support and strengthen its member communities. To that end, the credit union offers scholarships and stipends to post-secondary students and community members. It supports a full range of community and cultural organizations from heritage schools and summer camps to senior care facilities, and heritage and musical festivals both financially and with volunteer hours from team members.

“Members often choose to bank with us and remain loyal to us because of our community efforts,” Saar says.

For example, Northern Birch financially supported the development of a mural at a senior residential center and the planting of more than 60 new birch trees at a summer campsite in 2021 According to Saar, “we support all types of efforts that matter to our members and the communities they are a part of.”

Traditionally Northern Birch has received a large percentage of its new members from referrals. Dating back to before the merger, the marketing efforts largely have been through website and social media communications, direct member emails, and a newsletter that is also translated into Estonian and Latvian. The credit union also continues to advertise in cultural newspapers that are of interest to its membership.

However, expanding the credit union’s marketing efforts is a major goal in the coming months and years. While digital strategies and investments will be a part of that effort, further expanding community partnerships is a major part of the credit union’s strategy.

One significant project that will have a strong branding and reputational effect is Northern Birch’s support of a new community hub, KESKUS International Estonian Centre that is in construction in the Annex neighborhood of downtown Toronto. This marks the first time in over half a century that a new Estonian cultural center is being built outside of Estonia.

Northern Birch has provided seed financing for this center, together with project founders Toronto Estonian House, Tartu College, a not-for-profit student residence next door to the new center, and Estonian Foundation of Canada. Along with these three partners and a wide range of other supporters, Northern Birch has helped to bring this project to fruition and given lift to the capital campaign that has raised some $17 million from supporters around the world, for construction of the KESKUS Center. Oce KESKUS opens, Northern Birch’s flagship branch will be located inside this award-winning architectural gem.

Stipends to students from NBCU

As Northern Birch expands, it relies on its industry partners given the increased digitization of the banking and credit union industry and the desire by members for more financial services. The credit union has engaged Celero to manage its day-to-day IT functions and banking system, and Central 1 for support in payment processing, online banking, mobile app and website support; and treasury and liquidity management services

“Our partners are critical to us because of the need for economies of scale as our industry evolves,” Saar says. Identifying fraud, centralizing services, and utilizing different banking platforms is a necessity even for a smaller credit union like Northern Birch and outsourcing those services to third parties increases internal efficiencies, she adds.

“These partners provide us with expertise that will be critical to success in the digital future.”

Among the products that members need are fixed and variable mortgages, home equity loans, and general support for first-time homebuyers. Northern Birch specializes in two niche mortgage areas as well – co-op and co-ownership apartments. It is one of the few financial institutions in Ontario that has the specialized knowledge needed to support these niche markets. Co-op apartments in particular are often more affordable than condos, especially for seniors who are downsizing and young professionals, Saar says.

Reverse mortgages are an option of last resort for many of the credit union’s senior members. These products allow retired members to leverage the equity of their homes so that they can afford to remain living in their long-term homes.. Northern Birch also provides commercial mortgage loans for small business owners and entrepreneurs.

“Our lending team goes the extra mile to make sure we really do what we can to help our members,” Saar says. “We try to be very competitive with our rates and other institutions.”

This is especially important in today’s environment of rising interest rates. The credit union also provides a full range of savings, and checking accounts along with GICs and mutual fund investments.

Northern Birch provides for member needs throughout their life cycles, from student loans and trust funds through registered education and retirement savings plans to RRIFs and estate services.

The rapid speed at which the financial services industry is modernizing requires Northern Birch to stay abreast of high-tech trends, such as the digitization of documents. With shrinking margins, efficiencies are paramount in such a competitive space, Saar says. “We need to be lean and mean with our processes and staff,” she says.

In addition to building up the credit union’s marketing growth, a big priority is keeping pace with any regulatory changes required by the national and local governments, and the banking industry as a whole. The Credit Unions and Caisses Populaires Act of 2020 was established to reduce the regulatory burden for credit unions, increase their business and investment powers, and improve consumer experience and protection. Changes built into the act continue to be rolled out and require close attention from Northern Birch leadership. Advancements and requirements in IT to support cyber security and the safety of member accounts are important areas of focus for 2023.

More than anything, Northern Birch Credit Union aims to exceed the needs of its members through safe, convenient, and easy-to-follow digital and advisory services, Saar says. “We will always take steps and offer products that are in the best interests of our members and be there to help them address financial goals,” she says.

AT A GLANCE

Northern Birch Credit Union

What: A leading credit union with strong cultural and community  roots

Where: Branches in Southwest Ontario and downtown Toronto

Website: https://www.northernbirchcu.com/