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This week, I'm at a loss for words – a truly rare occurrence. When the rumblings started that Office of the Superintendent of Financial Institutions (OSFI) was going to ban the use of the words ‘bank’ and ‘banking’ by credit unions, my first reaction was "You've got to be kidding, that would NEVER happen. Why would they do that?"
I was wrong. Fortunately, I'm comfortable admitting I'm wrong. So now what? How do you describe banking without using the word? Having been a partner with MNP for a number of years, I'm used to thinking outside the box and looking for creative ways to work around issues or challenges. This one isn't easy.
We are a country built on innovation and entrepreneurship and as we just celebrated our 150-year mark, I'm trying to determine if this could be one of those times where we were just a little bit hungover and maybe didn't consider the actual impact to our economy of this change. I understand Canada needs a strong and stable financial economy. We don't want any Tom, Dick or Harry telling us they have a great place for Canadians money and to come ‘bank’ with them.
There are a lot of un-regulated institutions out there that could take advantage of the safety and security that aligns with the word ‘bank’. However, let's look at credit unions.
While they aren't regulated by OSFI and aren't governed by the Bank Act, they are regulated provincially; the Credit Union Acts were formed as an act of the provincial governments, dating back many years. Credit unions are strong, they are stable and deposits are guaranteed. In some cases, the guarantee is unlimited. Sounds risky, I know - much riskier than a bank. Interestingly enough, it wasn't long ago the federal government removed tax treatment for credit unions that originally was designed to help keep credit unions strong in communities across the country. It also wasn't long ago the largest banks in Canada came under the public microscope over certain sales practices.
Credit unions do amazing things in their communities and for their members. They do this, despite all of the regulatory pressures and challenges, which come with additional costs. While strong and stable, they are small in comparison to the big banks. Removing this language from their website, marketing materials and other areas of their business will cost the Canadian economy millions of dollars of money for these member-owned businesses. Each dollar that is taken from a credit union to make this change is a dollar directly taken from its member-owners and their communities. I wonder what the motivation is of the government in taking this position. Why credit unions? Why now?
Maybe the minister will re-evaluate the facts and change his mind. But, if nothing changes, what words will you use to describe the exceptional services that credit unions provide to their members? Let's get our creative juices flowing and stay tuned....
Contact Annette Bester, National Leader Credit Unions, at 306.664.8327 or [email protected].
Related Topics:Government; Financial Institutions
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