Watch out if you use the word ‘bank’. On June 30th the Office of the Superintendent of Financial Institutions (“OSFI”) issued an advisory that re-asserted that the use of the words bank, banker, and banking are restricted under The Bank Act. OSFI expressed displeasure at the expanded use of the words by non-banks and they provided offenders deadlines by which to strike the words from all advertising, websites, etc.
Credit union representatives have, informally, tried to stop this action before it became public. They argued that credit unions should be exempt, consumers were not confused about who they were dealing with, and that the terms are in general usage. They were unsuccessful. This was primarily because many credit unions have obscured their identities by dropping the words ‘credit union’ and using more generic business names (e.g. Blueshore Financial, G&F Financial Group, Envision Financial). The restrictions will also apply to loan and trust companies that are not ‘banks’.
The challenge is to adopt new language; to give up terms like ‘online banking’, ‘business banking’. This may actually be turned around into something positive that can differentiate credit unions. This is already the case where we use ‘member card’, not ‘bank card’. We shall see how credit unions choose to respond.
On the flip side, there is an irony insofar as federal credit unions will be able to use these terms, since they are chartered under The Bank Act.