‘We’re all winners today!’

For decades, credit unions have been offering their customers financial services.

So, it came as no surprise credit union officials across Canada knee-jerked upon learning the federal government announced it would ban non-bank financial service providers, such as credit unions, from using the words ‘bank’, ‘banker’, and ‘banking’ when advertising the services they offer.

That announcement came June 30 from the federal Office of the Superintendent of Financial Institutions (OSFI), an independent agency of the federal government which reports to the Minister of Finance and regulates banks, trust companies and loan companies in Canada.

As of Aug. 11, however, in the face of concerns raised in a grassroots campaign mounted by credit unions, OSFI stated a Ministry of Finance consultation paper “seeks views on the Bank Act restrictions on the use of the words ‘bank’, ‘banker’ and ‘banking’. As a result, OSFI is suspending the compliance expectations set out in its June 30 advisory.”

“We're all winners today!” exclaimed Kate Neff, Your Neighbourhood Credit Union (YNCU) marketing services and corporate communications vice president, in an email to SooToday received Monday from YNCU offices in Kitchener.

“Speaking on behalf of YNCU, I can tell you we're thrilled that our grassroots efforts to make people aware of the situation hit home and contributed to this response. This decision indicates there was some sober second thought, and the conversation will be continuing. That's exactly what we hoped for,” Neff wrote.

“We have been providing banking services without incident for over a century, but life in the last five to 10 years has changed so drastically with the growth of fintech (financial technology),” Neff said in a telephone conversation later Monday.

“There are lots of brilliant young people who are inventing things in their basements and on their smart phones and they have it in their mind they’re going to reinvent financial technology, and some of them can go and sell their service to an existing financial institution or insurance company, or they are bought by the bank or insurance company, or they’re working with organizations like Google or Rogers who are looking to develop the potential for financial services.”   

“It’s easy for them (fintech developers) to say ‘bank’ so they’ve been playing fast and loose with the terminology, and some cheque cashers and payday loan places have been playing fast and loose with the word ‘bank’ so unfortunately, from our credit union perspective, the original advisory was overly broad,” Neff said.

“It was for the purpose to crack down on people who are not providing banking services who are trying to ride the coat tails of decent, recognizable businesses,  and unfortunately credit unions got caught up in that.”

The original ruling “absolutely” came as a shock to the Sault’s Community First Credit Union, said Kirstin Dias, Community First marketing manager, speaking to SooToday July 24. 

The Finance Ministry now states “feedback is welcomed on how to refine the limitations on the use of these terms (‘bank’, ‘banker’, and ‘banking’) and on how to avoid marketplace confusion and ensure appropriate protection of consumers.”

Interested individuals or organizations are invited to review the consultation document online

Submissions should be submitted by September 29, 2017.

All things concerning financial services in Canada will be examined in 2019 when the Bank Act is scheduled to be reviewed.

The original OSFI ruling stipulated credit unions had until December 31 to dump the words ‘bank’, ‘banker’, and ‘banking’ from their websites and other electronic mediums, until June 30, 2018 from printed materials, and until June 30, 2019 from physical signage. 

“We would have to change everything, and that would go for every other credit union across the country.  The Canadian Credit Union Association estimated it to be an $80 million change nationally, and that’s money that can further be invested back into our community, our staff and into our credit unions, so that would have hindered our ability to give back to our communities,” said Kirstin Dias of Community First.

Community First has two branches in Sault Ste. Marie (at 289 Bay Street, near Station Mall, and at 535 Trunk Road).

There is also one Community First branch in Timmins, and the financial institution is also associated with Your Neighbourhood Credit Union, which has several branches in southern Ontario. 

The Sault is also home to two Northern Credit Union locations, one at 280 McNabb Street, the other at 612 Second Line West.