Public-private partnership expands access to banking products and services for Canadians across the country
Following a successful market test, Canada Post and TD Bank Group (TD) have announced the nationwide launch of a new personal loan product for consumers. To meet the growing demand for more accessible lending from coast to coast, the new Canada Post MyMoney Loan provides “fair, transparent and affordable” access to funds, no matter where a consumer lives. During the pilot program, “Canadians of all income levels and credit scores applied for the unsecured loan,” according to American Banker. Applicants reported they plan to use the funds to “cover emergency expenses including car repairs and veterinarian bills.”
With an estimated 15% of Canadians considered underbanked, this program has the potential to transform banking deserts. “The product is intended to reach all Canadians, especially those in rural, remote and Indigenous communities who may not have local access to affordable loans,” according to officials. The goal is to use Canada Post’s reach and TD’s expertise to provide competitive loans in amounts as low as $1,000. “Financial service is an essential service, and this alliance enables TD to play a meaningful role in helping expand access to banking to more Canadians,” says Michael Rhodes, TD’s head of personal banking, in a statement to Banking Dive.
The Canadian public-private partnership is markedly different from a U.S. postal pilot, which allowed customers at select USPS locations to redeem business checks for Visa gift cards of up to $500. According to the Consumer Bankers Association (CBA), the program doesn’t advance “postal banking” as it does in the U.S. “You have to look at what’s happening in Canada and what’s happening here [in the U.S] in two very different ways,” says David Pommerehn, general counsel at CBA to American Banker. “Providing customers with access to bank products delivered through a well-regulated financial institution at a post office branch is entirely dissimilar from transforming a federal agency into an independent financial services issuer.”
For more information on public-private partnerships in banking and serving the underbanked in North America, stay tuned to Believe in Banking’s continuing coverage of the industry’s top trends and topics. For best practices in financial services, visit Adrenaline’s Insights and contact our banking and credit union experts via email at firstname.lastname@example.org.