Feds throw wrench for credit unions
Most Albertans would have heard of Servus Credit Union — we have a number of branches right here in Sherwood Park-Fort Saskatchewan. Many of you have accounts with one of our local credit unions, or benefit in some way from their activity in the community. Credit unions are an important part of the economy in communities across our province and across the country.
Unfortunately, the Office of the Superintendent of Financial Institutions (OSFI) has taken a step which will throw a wrench in the work of credit unions, increase their operating costs and damage the economy by prohibiting the use of normal English words.
What the OSFI has done, essentially, is to give federal banks a monopoly over the usage of certain banking related words — terms like “bank”, “banker” and “banking.” This would prevent other institutions, such as our provincial credit unions, from using these words, even though they have been using them for decades.
These new regulations will complicate the ability of credit unions to explain the nature of their services using basic language. Credit unions will now have to change their paperwork, websites, advertising, and so on. For instance, Servus will not be allowed to write things like: “Come do your banking with us,” even though it provides financial services that are precisely equivalent to what traditional banks do.
To perhaps put this in perspective, how would Albertans react if the Strathmore Stampede or the Wainwright Stampede couldn’t use the word “stampede” anymore, because the Calgary Stampede is the bigger event, known across Canada? Such a move would rightly be seen as inappropriate and ridiculous.
This situation is similar. Credit unions should have the freedom to choose the vocabulary they find convenient and relevant for their customers, as long as what they are saying is accurate. Financial service consumers have a right to hear clear language that accurately describes what it is they are receiving. Banks and credits unions should both be able to describe their services in clear plain language.
This is not the first time since I have been elected that the federal government has taken decisions which negatively impact credit unions. In November of last year, I spoke in the House of Commons about how regulatory changes were going to negatively impact credit unions. I said the following: “I will mention one specific thing in this fiscal update, and that is the implementation of certain regulations with respect to credit unions… The application of one-size-fits-all regulations, perhaps designed for the big banks, to every small credit union is a huge red-tape burden.”
The government needs to listen to small and non-traditional businesses like credit unions, not just big businesses like the banks. The government should not impede the freedom of credit unions to use clear language. Our caucus and I are calling on Finance Minister Bill Morneau to change this advisory and permit credit unions to use plain simple “bank words” freely.
Published: Thursday, August 10, 2017