Kindred welcomes federal government review of common banking terminology

August 24, 2017 – Kindred Credit Union is 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 as part of its ongoing review of the federal financial services framework.

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,” said Brent Zorgdrager, chief executive officer. “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 a consultation paper on August 11, 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.

For additional information on this news, please click on the links below and stay tuned for updates on this issue as they become available.

OSFI Notice of Suspension

OSFI Advisory

 

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