This Advisory communicated OSFI’s interpretation of Section 983 of the Bank Act and restricted the use of bank terms (such as “bank,” “banker” or “banking”) by non-bank financial institutions. As a result of that Advisory, it appeared that credit unions would no longer be able to use such bank terms to describe their services. Read our earlier blog post.
Issued by the Department of Finance on the same date, the consultation paper relates to the federal financial sector legislative and regulatory framework. The Department of Finance is seeking consultation on a number of issues, including whether prudentially regulated non-bank deposit-taking institutions, like credit unions, should be given flexibility to use the bank terms to describe their activities and services.
The Department of Finance has set a closing date for submissions of September 29, 2017.
In its August 11 news release, OSFI advises that it will communicate its revised expectations for compliance with Advisory 2017-01 “as appropriate and necessary.” Thus, the restrictions on the use of bank terms by credit unions as set out in Advisory 2017-01 have been suspended for the time being.