In these excerpts from the Hyndman papers are glimpses of both the political and administrative issues associated with a provincial government owning a de facto bank. The first memorandum, from the Provincial Treasurer to his deputy, suggests that just prior to the memo’s execution an M.L.A., irate at being surprised that a Treasury Branch in his/her constituency had closed or was about to close, and they had been not informed.
The closure of bank branches in rural areas during the 1980s and 1990s caused the federal government to require the banks to go though a reporting process and the giving of notice to communities about the intended branch closures. This was also adopted by the Alberta government around 2000 and still is included in the Mandate and Roles document which outlines a 90 days notice “including the rationale for the decision, procedures for closing, a communication plan and how impacted customers will be accommodated.”
In March of this year, just before its fiscal year end, ATB announced the closing of 10 Alberta branches laying of 13 workers. According to CTV News, in January 2021, the Alberta Union of Provincial Employees representing front-line, low paid workers, identified 10 branches (five in Calgary, four in Edmonton, and Southview in Grande Prairie) destined for closure on the last day of the fiscal year. According to Senior Vice-President Aly Sumar:
At ATB, our customers and team members are at the centre of everything we do and this decision is not taken lightly.
“A closure is only done after extensive consideration of many factors including the frequency of in-branch transactions, number of customers and customer growth. An integral part of deciding to close a location is knowing we can continue to support our customers, both virtually and at other ATB locations nearby.
“As more of our customers’ behaviours and preferences shift towards a range of full-service and digital channels, ATB is responding to these customer needs. While that might mean closing some of our urban branches today, it means that we can focus on where our customers want us to be tomorrow.”
This comes at a time when the UCP government has directed ATB to “seek” to earn a risk adjusted rates of return similar or better than return s of comparable financial institutions. The March 31 closures would appear to be ATB’s initial answer to improving returns -a tactic as unimaginative as its competitors. As reported in Abpolecon.ca ATB dropped about 300 staff last year and continued its mediocre financial performance.
The second excerpt relates to ATB’s involvement as a subordinate partner to the Bank of Canada necessary to allow ATB continued access to the clearing and payments system. In the last memorandum from the Provincial Treasurer to the M.L.A. from Drayton Valley, a loan with an identified ATB customer is discussed. Abpolecon.ca will be reporting other M.L.A. involvement in the coming months. Most of the lobbying deals with either opposing branch or agency closure or the desirability of a new branch or refurbishment of a branch in their constituency.
Alberta Treasury
FROM: Lou Hyndman Provincial Treasurer
TO: A.F. Collins DATE: January 4, 1980
Deputy Provincial Treasurer
SUBJECT: TREASURY BRANCHES- CLOSINGS- ADVANCE NOTICE
In future, it would be useful for my office to have at least 30 days notice of the intended closing of a treasury branch, agency, sub-agency or mobile unit.
If I can give advance notice to an M.L.A as to the closing of a Treasury Branch entity, and explain the reasons they are for, he or she will not be ” taken by surprise” when constituents ask questions.
Accordingly, could you please put into effect a mechanism whereby 30 days advance notice of any intended closing is provided to me.
LDH/pdd
TREASURY BRANCHES OF ALBERTA
FROM: R.O, Holgate
Senior Assistant Superintendent
TO: Mr. A.F. Collins
Deputy Provincial Treasurer
434 Terrace Building
EDMONTON, Alberta
SUBJECT: PROVINCE OF ALBERTA TREASURY BRANCHES-
UNDERTAKINGS TO INDEMNIFY- BANK OF CANADA
We are enclosing a copy of an Authority approved by the Bank of Canada, that when executed by the Provincial Treasurer, will be accepted by the Bank which will then acknowledge Mr. Sparrow’s signature [ATB’s Superintendent}, without Seal, on Undertakings to Indemnify. (See copy of actual Undertaking attached)
The Bank of Canada suggests, in their correspondence of 17 October 1979, ( copy attached) that it might also be appropriate to add any other officer we consider necessary to give Undertakings to Indemnify. In this regard, I have added my name to the authority, as from past experience during Mr. Sparrow’s absence, it is essential that the administration of Treasury branches is uninterrupted.
In the past, the Bank of Canada had been accepting, as submitted, Treasury Branches’ Undertakings to Indemnify, however, as the volume of business increased there was a corresponding rise in the number of occasions where we would be required to request settlement from the Bank.
In mid-year 1979, the Bank considered, if necessary, Treasury Branches process Undertakings to Indemnify using the same procedures as the Chartered Banks. These procedures require a Chartered Bank to affix a Corporate Seal on each Undertaking being submitted to the Bank of Canada.
There were other minor and incidental administrative technicalities which has been resolved to everyone’s satisfaction.
The last concern of the Bank of Canada and the one with the attached Authority when executed will resolve, is the absence of a Seal on Undertakings submitted by Treasury Branches.
Alberta Treasury
FROM: Lou Hyndman
Provincial Treasurer
TO: Shirley Cripps, M.L.A. DATE: March 26,1980
Drayton Valley Constituency
503 Legislature Building
SUBJECT: TREASURY BRANCHES- INTEREST RATES
I am sorry for the delay in replying to your memo concerning Treasury Branches’ interest rate policy, in particular, as it applies to a Mr. Glen Bowen and his dealings at the Drayton Valley Treasury Branch.
There seems to be some confusion in the interest rate being charged in respect to Mr. Bowen’s personal borrowing, which bears an effective interest rate of 16% (as indicated in the Treasury Branch letter attached to your memorandum) and the corporate borrowings of Glen Bowen Holdings Ltd., which qualifies under Treasury Branches Small Business Loans program and bears an interest rate of 14½%..
The objective of that program is to provide those Albertans operating small businesses financing at reasonable terms. Ownership requirements under the program stipulate that loans may be advanced to businesses that operate as a Sole Proprietorship, Partnership, or as a Limited Company.
On the basis of the information at the Drayton Valley Branch where Mr. Bowen conducts his business, it was Treasury Branch’s understanding that the personal loan in question did not meet these conditions and therefore did not qualify for the 14½% interest rate.
I understand that Mr. Bowen has not discussed his concern directly with the Treasury Branch Manager. Perhaps he should do so, as it would enable the Manager to explain the program to Mr. Bowen who may also be able to provide additional information not now known by the Branch.
As a Treasury Branch customer, Mr. Bowen is being sheltered to a degree from the maximum rate that could be charged in the marketplace. This shelter is the result of a Treasury Branch policy of placing a ceiling of 16% on interest rates for most of the loaning programs. In this instance, it amounts to a substantial 1 ½% saving for Mr. Bowen. The effective rate of interest on the loan in question prior to November 8th, 1979 is 14½%.
Shirley, I hope you will find this information helpful.
LDH/kaz
Source: Wetaskiwin Online