It appears that cooler heads will prevail on a move by the Office of the Superintendent of Financial Institutions (OSFI) to issue an advisory on June 30 outlining its interpretation of the Bank Act restrictions. These restrictions contemplate the possibility of criminal charges and millions of dollars in fines against credit unions and other non-banks that use the term “bank,” “banker,” or “banking”.
Credit union boards and directors across the country were dismayed by this decision, saying it would cost them millions just to change signage and advertising materials.
“It’s based on the wording in the Canadian Bank Act established in 1871,” said Kootenay Savings CEO Brent Tremblay in July. “It was written before credit unions even existed. This is some bureaucrat’s
interpretation. It flies against common sense.”
With the assistance of MP Wayne Stetski in this area, who called the decision “ridiculous”, credit unions began lobbying for more thought on the issue.
It appears that has been successful, as the federal government has announced it will review the restrictions around the use of the words. In the meantime, the compliance expectations set out in the initial advisory in June will be suspended.
“We are pleased that Finance Minister Morneau’s office has decided to review a rule that if interpreted in the way outlined by OSFI in June, would have made it very hard for credit unions to compete fairly with banks,” said Tremblay. “All along, we’ve been looking for a common-sense solution that would allow credit unions to speak in a language familiar to Canadians, without anyone confusing us with banks.”