Bank, Banking & To Bank: Have YOUR Say

Sydney Credit Union has been actively advocating for the Department of Finance to allow credit unions to use familiar terms about what we provide to our members, namely banking services.

On August 11, the Federal Government released a consultation paper as part of the Bank Act review that is currently underway. In the release the Minister of Finance signaled an intent to review the restrictions on the use of banking terminology by credit unions and other regulated deposit-taking institutions. The Government is conducting a Public Consultation process on this matter until September 29, 2017 to gather perspectives from individuals and organizations that are affected by the issue.

The two key questions the Federal Department of Finance is seeking submissions on relate to the issue of credit unions’ using the terms “bank” and “banking”:

1.       Should credit unions be allowed to use the terms “bank” and “banking” in a verb form to describe their activities, and

2.       What limitations, if any, should be established on the use of these terms by credit unions to “avoid marketplace confusion and ensure appropriate protection of consumers”

Clearly this is a positive development, however it is critical that the Federal Government hears from individual credit unions, their employees, members, stakeholders and community partners. Each submission will help to inform Finance Canada as they work to update the Bank Act in a fair way, focused on the consumer and on the overall health of our industry.

Sydney Credit Union's position on this issue:

Our position continues to be clear and unequivocal on the first question. Yes, credit unions should be allowed to use common words and phrases such as “bank”, “banking” and “to bank” as they describe our business activities in a way consumers understand. As provincially regulated financial institutions, credit unions should continue to be given full usage of these words and phrases when used in verb form, as we have been doing for decades without issue. Sydney Credit Union does not call itself a bank. We use the phrase “to bank” in similar fashion to a person saying, “I’m going to walk to work”. Walking and banking are activities. Banking is what we do.

On the second question of whether limitations or restrictions should be placed on the use of these words or phrases, we strongly urge caution. We are not in favor of limitations regarding marketing and/or external communication materials, as it sends a clear and inaccurate message to consumers: you can’t do your banking at a credit union. We do not think limitations are required as our processes make clear to consumers that they are dealing with a credit union at every milestone, ranging from opening an account to accessing funds and products, and our Credit Union’s legal name is clearly presented on all documents that members sign. Furthermore, requiring credit unions to place what can only be described as a disclaimer on their marketing and communication materials will likely result in reputational damage, suggesting that credit unions are less secure, less credible and offer lesser quality services and products to Canadian consumers. SCU recommends that disclosure (defined as having the words “CREDIT UNION” placed prominently) be required on all official banking documents that require the signature of the consumer in order to access banking products and/or services from a credit union (e.g. account opening, loan applications and other such documents).

As a member, your voice is an important contribution to this Public Consultation. We have prepared a draft letter that you can download, save and modify as you wish. In addition to sharing your opinion and experiences with Sydney Credit Union, we encourage you to include the following points, as they are critical to our position:

• Credit unions play a vital role in the Canadian financial industry (i.e. how have we provided you with products, services and/or advice that has made a positive impact on the financial health of you and/or your family).
• Credit unions make a difference in the communities and economies in which they operate.
• You absolutely understand that you are doing business with a credit union.
• You describe the activities you conduct with SCU as banking. 

Where do you send your submission?

Download our template letter here.

It is very important that supporters and stakeholders of credit unions be heard. Once complete, you can share your submission by email to fin.legislativereview-examenlegislatif.fin@canada.ca or by mailing your letter to the address below.

Thanks for your continued support around this issue!