CEO Brett Oland of Bow Valley Credit Union, in Calgary, on Dec. 15, 2023. He runs a financial institution in Alberta that is attracting customers with an unusual marketing strategy. It is buying gold and silver on the market, with the pitch being that, in a doomsday inflationary scenario, it would sell those assets and distribute the profit to members to keep them whole in the inflationary nightmare.Todd Korol/The Globe and Mail
Brett Oland makes an unusual claim for an executive trying to attract new customers to his financial institution: The regulator overseeing his business has accused him of being a threat to the national banking system.
Bow Valley Credit Union, or BVCU, is stockpiling gold and silver, in vaults in Alberta, in hopes of shielding its members against an economic doomsday scenario in which a federally regulated bank collapses. It started a couple years ago, when Mr. Oland launched the credit union’s “gold-backed solution” to guard against his fiscal forecast: “Inevitable devaluation of the currency, as well as inflation, as far as the eye can see.”
Credit Union Deposit Guarantee Corp., which oversees Alberta’s 13 credit unions, told him to cut it out.
“The regulator stepped in and basically said: Cease and desist. You’re a systemic risk to the Canadian banking system,” said Mr. Oland, the credit union’s president and chief executive officer.
He told this story while pitching BVCU to about 100 people at a Take Back Alberta meeting in Lethbridge late last year. He’s been tagging along with the organization, and similar right-leaning groups across the province, in a bid to expand BVCU, which has about 10,000 members and $569-million in assets as of Oct. 31, 2023, according to its year-end financial statement.
Credit Union Deposit Guarantee Corp., in a statement, said Mr. Oland’s recollection is inaccurate, but its version is far from an endorsement. “We advised BVCU to cease publishing content that may undermine member confidence in the federal/provincial banking systems,” the regulator said. “We advised BVCU that the credit union legislation in Alberta does not support BVCU’s precious metals initiative.”
BVCU has taken steps to assuage the regulator’s concerns, but continues to press it and the provincial government to overhaul regulations to align with the financial institution’s perspective. For potential BVCU clients, Mr. Oland’s clashes with authority are part of the appeal.
BVCU is luring new customers with socially conservative values and its plan to fight inflation by squirreling away silver and gold coins, rather than trying to compete with other credit unions and banks on interest rates or branch locations. It deeply distrusts the federal government, on everything from privacy to public health, attracting Albertans who participated in or supported protests against government mandates designed to stem the spread of COVID-19.
BVCU has a catastrophic fear of inflation, juiced by what Mr. Oland and others consider gross mismanagement of the country under Prime Minister Justin Trudeau. It buys gold and silver as a hedge.
“We have a lack of confidence in the currency,” Mr. Oland said in an interview. “If you have a lack of confidence in currency, basically what you’re stating is you have lack of confidence in the governance of the country.”
The hypothetical fiscal nightmare starts with a federally regulated bank failing and ends with Ottawa printing trillions of dollars to make depositors whole.
This, Mr. Oland predicts, would cause widespread inflation. But BVCU believes it has an antidote. It would sell its precious metals into the inflationary market and pay its members a dividend, making them whole after accounting for inflation.
The pitch is paying off. BVCU hopes to expand membership by 22 per cent in the fiscal year ending October, 2024, Mr. Oland said. It increased membership by nearly 18 per cent in fiscal 2023, and roughly 11 per cent the year prior. BVCU’s membership grew by about 2 per cent annually prior to implementing its gold and silver strategy, said Mr. Oland.
BVCU has accumulated about 11,000 troy ounces of silver and 31 troy ounces of gold, according to Mr. Oland and a statement he provided from the Silver Gold Depository. The silver was worth about $331,267 and the gold is priced at around $84,748 in the current market. BVCU uses a slice of its profit to buy the precious metals.
Not all of BVCU’s new customers are goldbugs prepping for an economic implosion. Others are attracted to the credit union’s political positions.
BVCU’s combination of politics and precious metals nurtured its growth in Acheson, an industrial area on Edmonton’s western outskirts, last year. BVCU signed up 200 new members with $25-million in deposits and $1-million in shares in just six weeks, Mr. Oland said. BVCU marked its new territory with an automated banking machine in the lobby of one of its customers, Genics Inc., and has designs on expanding branch services.
The credit union’s hoard of gold gives Cam Milliken, Genics’s general manager and a new BVCU customer himself, a sense of security. He also appreciates BVCU’s effort to protect customer information, even from the federal anti-money laundering and anti-terrorist financing unit known as the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC.
“Government has wanted to be more and more involved, in deeper ways, into people’s banking,” Mr. Milliken said in an interview. “What I like about Bow Valley is they are sort of speaking up and out against that.”
BVCU scoffed when the federal government granted FINTRAC more power to monitor the flow of money and others authority to freeze bank accounts in an effort to choke the supply of cash supporting the trucker convoy in Ottawa and the highway blockade in southern Alberta that emerged in protest of COVID restrictions in early 2022. BVCU is pressing Alberta to shield it and others from FINTRAC’s reach.
Alberta Premier Danielle Smith, in an interview on a podcast Dec. 18, said she wants to amend the Alberta Bill of Rights so “we don’t have bank accounts frozen.”
But Alberta Finance Minister Nate Horner, in a statement, said the provincial government is “not considering introducing or amending legislation to exempt Alberta credit unions” from the Proceeds of Crime (Money Laundering) and Terrorist Financing Act or FINTRAC “reporting requirements as this could significantly increase risk to Alberta’s economy.”
Mr. Oland said BVCU sold the precious metals it had in the form of bars and stopped using phrases like “gold-backed” to appease the regulator, but it is still negotiating how to account for its gold and silver coins on its balance sheet.
The regulator demands that metals reflect the Royal Canadian Mint’s face value, which is $5 for each silver coin and $50 for the gold ones. BVCU wants to account for them at fair market value, which would substantially buffer its balance sheet.
Credit Union Deposit Guarantee Corp., in an e-mail, noted regulatory requirements can differ from accounting standards. Mr. Horner, in his statement, rejected BVCU’s push to change the regulator’s outlook.
“Some of the changes proposed by Bow Valley Credit Union, such as investing in precious metals, would increase risk and may impact the safety and soundness of financial institutions,” he said.