Credit unions in the Sault and across Canada may be allowed to say they offer ‘banking services’ after all.
On Friday, June 30, the federal Office of the Superintendent of Financial Institutions (OSFI) banned non-bank financial service providers such as credit unions from using the words ‘bank’, ‘banker’, and ‘banking’ when advertising the services they offer.
OSFI is an independent agency of the federal government which reports to the Minister of Finance and regulates banks, trust companies and loan companies in Canada.
The decision “absolutely” came as a shock to Community First Credit Union, said Kirstin Dias, Community First marketing manager, speaking to SooToday Monday.
Banning usage of those familiar terms by credit unions led to a protest, and now, Dias told us, credit unions are waiting for what is being called a positive review of that OSFI ruling.
“We did get an update on Friday (July 21) from the Canadian Credit Union Association (CCUA).”
Dias said the CCUA met with federal Finance Minister Bill Morneau, stating it was a productive and positive meeting for credit unions regarding their usage of the word ’bank’ and related words.
Dias, however, said Community First (and other credit unions) are not at liberty to disclose details of that positive development until an official announcement has been made by the Minister of Finance “within the next two weeks.”
“We’re waiting for that update,” Dias said.
“We don’t know what’s going to happen, but we hope it’s going to be positive.”
Banning of the word ‘bank’ or like terms would create a nightmare for credit unions when it comes to advertising and explanation of credit union financial services, Dias said.
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,” Dias said.
“We had a big, massive social media campaign going on across the country, a lot of higher ups at the credit union level were speaking with the media, so it was a big widespread effort which resulted in the Friday meeting with Minister Morneau,” Dias said.
“This news is unfortunate,” Community First stated in an earlier email to SooToday in response to the June 30 ruling.
“We continue to believe the government should work towards a common sense solution, one that aligns with commonly used language and more than 100 years of credit union practice and, until recently, reasonable interpretation by the federal government,” the email stated.
On its website June 30, OSFI wrote the agency “has observed increased use of the words ‘bank’, ‘banker’ and ‘banking’ by non-bank financial service providers,” stating “clarity” is needed as to who may use those terms.
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.