Move derided by local executives as contrary to common sense
BY VOICE STAFF
On June 30, the federal Office of the Superintendent of Financial Institutions (OSFI) issued an advisory that essentially banned credit unions from using the term “banking” to describe the services they offer Canadians. Their advisory takes a strict interpretation of the Bank Act, and based on this interpretation, the federal government could lay criminal charges against any credit union that uses the term “bank,” “banker,” or “banking.”
Credit Unions have used the verb “bank” and the term “banking” to describe what they do, without penalty, for years with the tacit support of federal officials.
“This is a disappointing decision that will have a severe impact on Credit Unions and their members across Canada as we’ll be forced to spend a significant amount of time and resources to accommodate these changes,” says Ken Janzen, Chief Executive Officer of PenFinancial Credit Union. “Credit Unions are member-owned cooperatives, who in addition to being highly regulated, are also held accountable by their members. All we are asking is for OSFI to take a common sense approach to this language issue in order to create a level playing field for Credit Unions. When you break down this decision locally, it will have a big impact on what we do here in Niagara. As we prepare to open our new branch in Fonthill serving the Pelham community, we are now forced to consider semantic changes to our signage and interior branding which takes time and resources away from much more important things, such as community support.”
John Wink, Manager of Fonthill’s Meridian Credit Union branch, is also disappointed.
“It is an unfortunate stance that OFSI has taken,” says Wink. “As a result, Meridian will no longer be able to use phrases like ‘mobile banking,’ ‘business banking,’ ‘on-line banking,’ or ‘bank with a credit union’ when conducting our business. It will also mean having to popularize new terms to describe our services to current and new members. All this will come at a significant cost to all credit unions. All electronic sites, print materials and signage will have to be updated.”
Wink adds that the irony behind all of this is that people will still refer to doing their transactions at the credit union as “doing their banking.”
“OSFI has taken a position that is inconsistent with its past practices and with common sense,” said Martha Durdin, president and CEO, Canadian Credit Union Association. “The Minister has the power to fix this so that Canadians continue to have a real competitive option to the big banks.”