The federal Department of Finance announced a temporary halt to a June 30 advisory from the Office of the Superintendent of Financial Institutions (OSFI) that restricted credit unions and other nonbank service providers from using the words “bank, banker and banking” to describe their business activities.
Throughout July, representatives of credit unions across Canada met with various Members of Parliament to voice their concerns and ask the federal government for a common-sense reassessment of the matter. On August 11, the Department of Finance released a consultation paper that included plans to examine the Bank Act restrictions as part of its ongoing review of the national financial services framework. The Department is seeking input on whether provincially regulated, non-bank deposit-taking institutions should be provided flexibility in using the terms “bank” or “banking.” The Department is also looking for feedback on refining the terms’ limitations and suggestions on how to ensure consumer protection and avoid confusion in the marketplace.
Upon release of the consultation paper by the Department of Finance, OSFI suspended the credit union compliance expectations and said it will revisit the issue after completion of the Department’s review.