When is a bank not a bank? When Ottawa tells it it isn’t.
That’s the jist of a changes to the Banking Act and Northern Saving Credit Union is caught up in it. The Office of the Superintendent of Financial Institutions has suggested an updated bank act should include more restrictions on what financial institutions can actually call themselves a “bank”.
At the end of last June credit unions got the word from the superintendent’s office they had until December 31st to remove the words “bank” “banker” and “banking” from their websites and from all printed material and all physical signage by next June 30th.
The Superintendent’s Office claims the changes are being made so that there is no marketplace confusion. But according to Fay Booker the interim president of the Northern Saving Credit Union, it’s kind of foolish seeing as most members simply refer to the facility as “the bank” in their day to day conversation because they are doing “banking”.
Banks are under federal control while credit unions are under that of the province, but according to a federal document released last month while credit unions are using the term “banking” they, are in effect, not banks according to the strict interpretation of the regulations. Although most people haven’t a clue what the difference is between CIBC and the credit union. The document also notes while the term “banking” is used in reference to online “banking’ it should actually be termed “on line transaction accounts”.
The changes will have a big impact on Eastern Canadian Credit Union, where they use the tag line “the better way to bank”.
Booker says the Northern Saving Credit Union is taking steps to conform to the new rules and don’t have personal banking officers anymore. Now they are “financial service reps” and they dropped the word “bank” from their title.
The semantics being bantered back and forth seems to come down to the difference between a custodian and a janitor.
Canadian credit unions, and there are a lot of them, are pushing officials to revers the policy and allow financial institutions to continue to use the generic terms “bank”, “banker” and “banking”.