Kootenay Savings Credit Union released a statement last week to describe that they are “pleased with the recent decision by the federal government to review Bank Act restrictions around the use of the terms “bank, banker and banking” by credit unions.”
The review follows a decision by the Office of the Superintendent of Financial Institutions (OSFI) to issue an advisory on June 30 outlining its interpretation of the Bank Act restrictions. These restrictions contemplate the possibility of criminal charges and millions of dollars in fines against credit unions and other non-banks that use the term “bank,” “banker,” or “banking”.
“We are pleased that Finance Minister Morneau’s office has decided to review a rule that if interpreted in the way outlined by OSFI in June, would have made it very hard for credit unions to compete fairly with banks,” shared Kootenay Savings’ President and Chief Executive Officer, Brent Tremblay.
“All along, we’ve been looking for a common-sense solution that would allow credit unions to speak in a language familiar to Canadians, without anyone confusing us with banks.”
Following the release of the consultation paper, the Office of the Superintendent of Financial Institutions (OSFI) said it was “suspending the compliance expectations set out” in the June 30 advisory pending the Department of Finance’s review of the Bank Act restrictions.
OSFI will revisit the issue once the Department of Finance has announced the completion of its review.