Libro Credit Union: Boss cheers as federal officials suspend crackdown on the word ‘bank’

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Federal officials have backtracked on a crackdown on use of the term “banking”, much to the relief of London-based Libro Credit Union.

On June 30 the Office of the Superintendent of Financial Institutions (OFSI) warned it would start strict enforcement of a Bank Act regulation that allows only a select group of regulated financial institutions to use terms like “bank,” “banker” and “banking” in their marketing and promotion.

Credit unions have commonly used those terms in a generic sense and Libro president Stephen Bolton said it would cost the member-based company half a million dollars to comply by removing the terms from all its printed and online content as well as signage by June 30, 2019.

Violating the Bank Act is a criminal offence and officers of a financial institution can be jailed.

But last week OFSI issued a notice saying it was suspending a crackdown on the use of “bank” and similar terms pending an upcoming review of the federal Bank Act.

Bolton, who is also a chairperson of the Canadian Credit Union Association, said credit unions across the country came together to lobby MPs and government officials to drop the crackdown.

“We are hoping that common sense prevails. Nobody who does business with us thinks they are dealing with a bank,” said Bolton.

Bolton said the retreat by OFSI came quickly enough that Libro did not have to spend any money to change marketing material to comply.

Although the crackdown has only been suspended, Bolton says he is hopeful it will be permanently dropped when the Bank Act review is completed.

With 31 branches, Libro is the dominant credit union in Southwestern Ontario and the third largest in Ontario

hdaniszewski@postmedia.com

twitter.com/HankatLFPress


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