Access Credit Union CEO Larry Davey and COO Myrna Wiebe meet with Portage-Lisgar MP Candice Bergen.
The Office of the Superintendent for Financial Institution’s (OSFI) ban on the use of terms like ‘bank,’ ‘banker,’ and ‘banking’ by Credit Unions is making a stir in the federal political sphere. Candice Bergen, Portage-Lisgar Member of Parliament, called out Bill Morneau, Federal Minister of Finance, in a press release August 2 to make changes to the OSFI’s advisory.
“I think it’s important that we right now put the brakes on this and that the government make some changes,” said Bergen
The OSFI advisory was issued June 30 and limits the use of terms like ‘bank,’ ‘banking,’ and ‘banker’ by non-bank financial institutions and service providers. Changes on websites, printed material, and signage will have to be made, costing Credit Unions upwards of $80 million, said Larry Davey, president and CEO of Access Credit Union in a previous article.
While the OSFI recognizes that these changes cannot be made immediately and has created a timeline detailing when these changes have to be made, they have not limited the legal effects associated with failing to comply with the new rules. Penalties include both fines and jail time for the offending Credit Unions and individuals who do not make the change.
Bergen says the OSFI decision is absurd and unwarranted. “The prohibition of Credit Unions from describing their services with popular and understandable terms defies common sense, and is regulation for the sake of regulating,” said Bergen in a press release.
Words like ‘bank,’ ‘banker,’ and ‘banking’ are everyday words used by regular people to describe the financial services both banks and Credit Unions provide, said Bergen. “Credit Unions offer banking services. It’s a term that people are familiar with,’ she said.
Bergen says that it is the rural areas and people that will suffer the most because of this ban. “Credit Unions have historically served rural areas . . . so when banks weren’t willing to come set up a branch in some tiny, small town in Manitoba, the Credit Unions were there,” she said.
“If we don’t recognize how important the credit unions are and as a government, protect them, it’s kind of a slap to rural Manitobans and Rural Canada because Credit Unions have been there. They’ve been there providing loans and banking services and all the things that the big banks wouldn’t do because they didn’t want to put a branch in some of these small towns.”
Credit Unions are central to the rural community, not only through financial services but also because of the community support provided. “Not only do they provide services to individuals, to farms, to businesses, but you look around our towns . . . and you see they are actually giving to community centers and to different not for profit areas of our community that need support,” said Bergen. “They are good corporate citizens and they would be a huge hole in our rural areas if we did not have them.”
Bergen says the OSFI decision is a result of Bay Street bankers strong-arming the Liberal government into doing what they want in order to turn a profit and make Credit Unions less competitive. “The Liberal government is made up of elites from Bay Street, and so the big banks on Bay Street are putting pressure on the Liberals,” said Bergen. “The Liberals say ‘Sure, we’ll do whatever you want because we don’t really have much concern for Rural Manitoba, or Rural Canada, or the Credit Unions who serve them.’”
After speaking with Davey about the OSFI decision, Bergen said she would try to increase awareness and push for change at the Federal level. “I’d like to see Mr. Bill Morneau who’s the Minister of Finance . . . change the regulation and say the Credit Unions can use the terms ‘bank,’ ‘banking,’ and ‘banker,’” said Bergen. “It’s very simple and he can do it.”
Morneau was unavailable for comment but the Press Secretary of the Office of the Minister of Finance, Chloé Luciani-Girouard, released this statement: “We know that many middle-class families and small and medium-sized business rely on credit unions for their financial needs. The Minister of Finance recently had a productive meeting with the Canadian Credit Union Association in order to better understand their concerns and the impacts of this interpretation on the ability of credit unions and other entities to conduct their businesses. We will continue to listen, and plan to look at the issue more closely in our upcoming financial sector review consultation.”