On June 30, 2017 an advisory was issued by the federal Office of the Superintendent of Financial Institutions (OSFI) that, taking a strict interpretation of the Canadian Bank Act, forbids credit unions from using the words “bank”, “banking”, and “banker”.
Institutions are required to comply with these new restrictions and make adjustments within a three-year timeline. By December 31 of this year, the terms must be removed from information contained on websites or other electronic platforms, by June 30 2018 from print materials and by June 30, 2018 from all physical signage.
The most commonly-used word in response to this new edict is “ridiculous.”
Kootenay-Columbia Member of Parliament Wayne Stetski said in a press release, “Frankly this is ridiculous. It is outrageous. Our credit unions are highly regulated and respectable institutions that shouldn’t be blocked from using the everyday words that best describe their services.”
Stetski said that parliament’s original intent with the 80-year-old law, which has never before been enforced upon credit unions, was to “avoid obvious examples of entities deceiving the public. It wasn’t meant to police the common verbs used by accredited institutions.”
Jean-Ann Debreceni is chair of the board at East Kootenay Community Credit Union (EKC). She says that while they will of course be complying with the regulation, making all the required changes in the three-year period will cost credit unions across the country no less than $88 million.
“We’ll have to do it, but it’s almost so ridiculous you know …” says Debreceni. “… like if you didn’t laugh you’d sure enough cry.”
In the official press release from EKC, definitions of what credit unions are and what they do are provided. They have been a “safe alternative” to banks with a “long and respectable grass-roots history” that goes back to January 23, 1901 when the first Canadian credit union was established.
The release also breaks down what sets them apart from traditional banks:
“[Credit unions] offer the same financial products and services and offer 100 per cent deposit protection. Like banks, credit unions are heavily regulated. The difference is in the structure. Credit unions are a co-operative, run on principles, using profits for the good of the owners (members) by returning profits back to the members and their communities. Credit unions open in small communities, looking more at the social and community impact, unlike banks that close down unprofitable branches.”
The high costs and resources needed to comply with the regulation will prevent EKC and other credit unions across the country from being able to use their profits to better their communities, according to Debreceni.
“What we’re so frustrated with is this money and time,” she says. “The people that are going to have to do this will not be able to serve our members. The money that’s going to come out will be equivalent if not more than what we donated to the community to put a chairlift in the Cranbrook Community Theatre — so for three years we will not have that money to put in our community. It is just so frustrating.”
Indeed, a quick page search (command ‘F’) on the home page of EKC pulls up 10 separate results for the word “bank.” Removing those is just the tip of a much more colossal iceberg when you consider all the documents, files, other web pages and actual, physical signs that will need to be changed.
While OSFI has said on their website that their decision is based off of their observation of “increased use of the words “bank”, “banker” and “banking” by non-bank financial service providers,” and their desire to “provide clarity regarding its interpretation of the restrictions,” those affected disagree and feel that changing the words will not change their meanings.
“It doesn’t change what we do. It will still mean the same thing,” says Debreceni. “Internet banking or internet financial services for online it will still be doing the same thing.”
As frustrated as Debreceni is by the decision, she was able to find humour in the situation, adding with a laugh that, “we were talking about taking the ‘B’ off of the bank and just calling it ‘anking.”