Credit unions across Canada, including Revelstoke’s, are protesting a recent decision that says they can’t use the word “banking” to describe their services.
In a news release, the Revelstoke Credit Union says the move could cost credit unions across the country millions of dollars by forcing them to change all their signage, marketing materials, websites, pamphlets and more.
Roberta Bobicki, the president of the RCU, said the changes could result in confusion to consumers about what services they provide.
“It’s important to us that our members and the public know that credit unions can offer the same banking services that the federally regulated commercial banks offer,” she said.
At issue is a ruling by the Office of the Superintendent of Financial Institutions (OSFI), that says only federally-regulated institutions can use the words “bank”, “banker”, or “banking” to describe their work.
Credit unions are provincially regulated, so the ruling means they can’t describe themselves as banks, even if that’s largely what they are.
It’s a rule that’s in the Bank Act, but one that credit unions say has never been enforced.
“It is important that consumers know when they are dealing with a bank rather than another type of financial service provider,” a federal finance official said an in an email to CBC News.
“Allowing non-banks to use banking-related words (e.g. bank, banker and banking) could mislead consumers into believing that they are dealing with a federally regulated bank that is subject to protections and obligations created by the federal banking framework.”
The RCU says the new ruling, if it holds up, means it will have to change various forms, documents, websites and its mobile platform. Credit unions have been given deadlines of Dec. 31, 2017, to change their website; June 30, 2018, to change their print materials; and June 30, 2019, to change their signage.
Kootenay-Columbia MP Wayne Stetski called the ruling “ridiculous” and issued a call for Liberal Finance Minister Bill Morneau to reverse it.
“It is outrageous,” said Stetski in a news release. “Our credit unions are highly regulated and respectable institutions that shouldn’t be blocked from using the everyday words that best describe their services.
“Parliament intent in this section of the Banking Act is to avoid obvious examples of entities deceiving the public. It wasn’t meant to police the common verbs used by accredited institutions,” he added.
He accused the OFSI of working to protect banks at the expense of Canadians.
“This goes against commons sense, it goes against good management, and it goes against the interest of consumers,” Stetski said.