OSFI just issued an advisory threatening to bring criminal sanctions against non-banks that use the words “bank”, “banker”, or “banking”. Their cover note gives specific dates by which use must stop. This derives from section 983 of the Bank Act, which says in part that a non-bank can’t use: “… the word “bank”, “banker” or “banking” to indicate or describe a business in Canada or any part of a business in Canada…”. Examples given of improper use include: “Come do your banking with us”, “Automated Banking Machine”, “Bank Accounts”, “Better Banking”, and “Mobile Banking”. It also says they can’t advertise under a “banks” heading of a directory.
The Canadian Credit Union Association was quick to respond with a (now deleted) press release saying: “Ottawa is telling credit unions to stop using the words Canadians use to describe the work we do … This rule will prevent credit unions from advertising their ‘business banking’ services or even having an ‘on-line banking’ button on a website.” And that: “OSFI has taken a position that is inconsistent with its past practices and with common sense.”
What do readers think?
Is this crackdown needed to stop confusion in the marketplace and to preserve the rights of banks?
Have terms like “banking” become a generic and acceptable way for credit unions and other non banks to describe their services?