Credit unions decry ‘banking’ terms ban
TORONTO — The national group representing credit unions says its members are being treated unfairly by a federal regulator that is prohibiting them from using the terms “bank,” “banker” and “banking” to describe their services.
The Canadian Credit Union Association says the ban on the terminology makes it difficult for credit unions to compete fairly with banks.
The directive was contained in an advisory issued last Friday by the Office of the Superintendent of Financial Institutions (OSFI).
The association says it has interpreted the advisory to mean that any member who continues to use these terms can face criminal charges.
The group also notes that due to the changes, credit unions will have to remove any banking references from their advertising materials and their websites — a move it called an “unnecessary and expensive undertaking.”
OSFI says it issued the advisory to provide clarity after observing increased use of the words “bank,” “banker” and “banking” by financial service providers that aren’t banks.
The directive will take effect in stages, with companies required to remove banking references from websites by the end of this year and from printed materials by June 30 of next year.
The credit union association says it had 278 credit unions and caisses populaires in its membership in the first quarter. Canadians had $176 billion on deposit with its members, it said.