Did you see the news recently where Credit Unions were told they are not allowed to use the word “bank”, “banker” and “banking”?
That’s right – the heavy hand of the federal government came down on our much beloved and community orientated Credit Unions. And for all Credit Union members out there who thought they were “banking”, I guess you were doing something else all these years while depositing cheques and paying off your mortgages.
While others in Ottawa are spending their time on other matters, like ending up on the front cover of Rolling Stone and doing podcasts on their favourite American television show, I was meeting with our local Credit Unions and working diligently to return a little common sense to the world.
You see the federal agency responsible for regulating banks and other financial institutions quietly issued new regulations that will damage the thousands of credit unions that operate across our country.
The regulations issue a blanket prohibition on the use of terms like “bank”, “banker”, and “banking” by basically any entity other than major banks. Credit unions, who have traditionally been allowed to use common terms like “bank with us” or “online banking”, will no longer be allowed to do so.
The terms “bank”, “banker”, and “banking” have been part of the common vernacular for more than a century. In particular, “banking” is a generic verb used to describe a financial transaction.
This decision, which came into effect immediately, has given non-bank financial service providers timelines within which they must remove these terms from electronic mediums, print materials, and physical signage. As you can imagine, this will result in significant and unnecessary costs for those institutions utilizing what is, in essence, common language in the financial sector.
In fact, the administrative costs to Credit Unions to change and popularize other unknown terms and order new signs are estimated to be over $80 million.
And why the sudden change?
No explanation has been forthcoming. This has left credit unions and their customers confused as to why they would want to change a decades-old practice. The result of these changes will be increased costs for credit unions, which will have to pay for changes to signage and other marketing. Moreover, it will put them at a further competitive disadvantage when compared to the big banks.
Over the past several months, credit unions and Parliamentarians alike have reached out to the regulator and to the Finance Minister to strongly oppose these changes. In fact, at an All-Party Credit Union Caucus meeting on Parliament Hill, MPs and Senators from all parties agreed that these changes were unnecessary and harmful.
Unfortunately their views seem to have fallen on deaf Liberal ears.
There are over 300 credit unions nationwide that serve over 5.5 million members. Credit Unions provide a community-focused approach to finances and are regularly recognized as leaders in customer service. Instead of making business harder for these important institutions, we should be looking for ways to help ensure that credit unions can thrive and prosper in our communities.
It is not too late for the Liberal government to step in and change these regulations. I am calling on the Liberals to work with our Conservative caucus and Credit Unions to fix this calamity and update the regulations.