TD Bank to Bring New Personal Loan Product to Canada Post Branches in Rural and Remote Communities

Content of the article

Toronto-Dominion Bank plans to offer new loan through Canada Post offices in underserved rural, remote and Indigenous communities as COVID-19 pandemic forces customers to go online, widening gap for those who do not have access to physical branches.

Content of the article

The personal loan pilot project, which will launch this fall, will focus on remote communities, which typically have limited access to physical branches and lack internet services to connect to digital banking tools.

When a customer visits a Canada Post location, postal workers help them apply online or over the phone. TD’s new loan product, which aims to help customers with simple personal loan needs, including emergency home or car repairs, will be available in smaller amounts, starting at $ 1,000. $.

Many remote, rural and Indigenous communities in Canada face long journeys to the nearest bank branch, and some find themselves without access to lenders, making it difficult to obtain products like loans and loans. mortgages that typically require customers to visit a branch in person. . More than 1,200 rural communities in Canada have post offices but no banks or credit unions, and only 54 of 615 Indigenous communities have access to local bank branches, according to the Union of Postal Workers.

Content of the article

The pandemic has accelerated the transition to digital banking, as branch closures and restrictions have redirected customers to accessing financial services online, which has sparked speculation about major banks shutting down.

While the Big Six banks have been silent on branch closures in Canada after the pandemic has ended, closures have already taken place south of the border. TD closed 82 branches in the United States in February to reallocate resources to digital banking alternatives, and all of Canada’s largest lenders have temporarily closed some branches during the pandemic due to restrictions.

Content of the article

Even before COVID-19 devastated global economies and prompted customers to embrace digital banking tools, branch closures had accelerated. Canadian lenders operated 5,820 branches in 2019, 483 fewer than in 2015.

Rural and remote towns and communities have often found themselves with few banking options, according to Xan Moffatt-Toews, president of the Alberta, Northwest Territories and Nunavut branch of the Canadian Association of Teachers. post and assistants.

“In rural areas, big banks like TD or RBC have set up satellite branches in small towns, like little huts to do simple transactions,” Moffatt-Toews said in an interview. “These satellites have largely shut down.”

In many cases, these communities are not connected to reliable broadband and internet services, which makes even digital banking or fintech startups – or “fintechs” – a flawed solution.

Content of the article

“Internet and broadband issues are a big part of the problem,” Moffatt-Toews said, adding that even “Canada Post still has a lot of manual offices that don’t have connectivity so they still use old cash registers and calculate everything with a pen. and paper.

TD declined a request for comment.

Canada Post is looking for ways to increase its balance sheet. The beleaguered state-owned company’s losses quintupled in 2020 from the previous year as the pandemic put pressure on operating costs and growing competition from courier services held back the increase in deliveries of package.

The concept of postal banking has been around for decades. Canada Post provided banking services until 1968. Earlier this year, the Canadian Union of Postal Workers launched a campaign calling for Canada Post to provide financial services at its locations. Other countries also offer banking services through post offices, including New Zealand, France, Germany, Italy and Brazil.

Canada Post employees currently process limited financial services transactions, including sending money through reloadable prepaid cards, gift cards, digital vouchers and deposits.

“TD is the first bank that Canada Post has partnered with for a loan product,” Canada Post spokesperson Phil Legault said in an email. “However, we have partnered with other financial organizations to offer services such as MoneyGram, and we have partnered with a major Canadian bank to provide our customers with access to order foreign currency.”