The Canadian Office of the Superintendent of Financial Institutions on August 11 suspended its compliance expectations regarding the use of the terms "bank", "banker", and "banking" set forth in a June 30, 2017 advisory.
The Bank Act limits the use of these terms to only banks.
The decision to suspend compliance expectations arose from the issuance of a second consultation paper by the Department of Finance, which seeks views on the Bank Act restrictions on the use of the words "bank", "banker", and "banking".
Canadian credit unions have stated that they would be at a competitive disadvantage, if the could not use banking-related terms to describe their business activities.
Read the press release.
Read the second consultation paper.
Showing posts with label Canada. Show all posts
Showing posts with label Canada. Show all posts
Tuesday, August 22, 2017
Tuesday, July 4, 2017
Canadian CUs Can't Use the Words Bank, Banker, and Banking
Canada's Office of the Superintendent of Financial Institutions (OSFI) on June 30th issued an advisory that restricts the use of the words “bank”, “banker” and “banking”.
OSFI has observed increased use of the words “bank”, “banker” and “banking” by non-bank financial service providers.
The restrictions apply to all non-bank financial service providers, including both federally regulated trust and loan companies and provincially regulated institutions. They also apply to unregulated financial service providers.
While the Advisory went into effect immediately, OFSI will give non-banks time to comply with the Advisory and established timelines for websites, print materials, and physical signage to come into compliance.
The Advisory also provides an exception to these restrictions, where the use of the words is not in relation to a financial services business.
The Canadian Credit Union Association criticized the Advisory and called on the federal government to reverse the OFSI's advisory.
Read the press release.
OSFI has observed increased use of the words “bank”, “banker” and “banking” by non-bank financial service providers.
The restrictions apply to all non-bank financial service providers, including both federally regulated trust and loan companies and provincially regulated institutions. They also apply to unregulated financial service providers.
While the Advisory went into effect immediately, OFSI will give non-banks time to comply with the Advisory and established timelines for websites, print materials, and physical signage to come into compliance.
The Advisory also provides an exception to these restrictions, where the use of the words is not in relation to a financial services business.
The Canadian Credit Union Association criticized the Advisory and called on the federal government to reverse the OFSI's advisory.
Read the press release.
Thursday, July 12, 2012
Canadian Proposal on Charter Choice
The Canadian Parliament passed legislation in 2010 creating an optional federal charter for credit unions. Currently, credit unions are regulated exclusively by the provinces.
The Canadian Department of Finance on July 6 released proposed regulations that would implement the federal credit union legislative framework.
The proposed federal charter will make it easier for Canadian credit unions to expand nationwide. But Canadian credit unions that opt for a federal charter would be supervised by the Office of the Superintendent of Financial Institutions -- the regulator of the Canadian banks. They would also be under the same insurance fund as Canadian banks.
Furthermore, the legislation provided a pathway for a federal credit union to convert to a bank with common shares.
The proposed regulation dealing with charter choice specifies the process and disclosure required for a federal credit union to change its legal form from a company owned by members to one owned by shareholders. The proposal contains a series of requirements that must be followed to ensure the process is fair and restricts management from benefiting unduly from the conversion transaction.
It is unclear how many credit unions will opt for the federal charter or will seek to change their legal form to one owned by shareholders.
Read the conversion proposal.
The Canadian Department of Finance on July 6 released proposed regulations that would implement the federal credit union legislative framework.
The proposed federal charter will make it easier for Canadian credit unions to expand nationwide. But Canadian credit unions that opt for a federal charter would be supervised by the Office of the Superintendent of Financial Institutions -- the regulator of the Canadian banks. They would also be under the same insurance fund as Canadian banks.
Furthermore, the legislation provided a pathway for a federal credit union to convert to a bank with common shares.
The proposed regulation dealing with charter choice specifies the process and disclosure required for a federal credit union to change its legal form from a company owned by members to one owned by shareholders. The proposal contains a series of requirements that must be followed to ensure the process is fair and restricts management from benefiting unduly from the conversion transaction.
It is unclear how many credit unions will opt for the federal charter or will seek to change their legal form to one owned by shareholders.
Read the conversion proposal.
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