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Seventeenth Report of the Committe of Banking, Trade and Commerce: Use of the Word "Banking"

The Senate proceeded to consideration of the seventeenth report (interim) of the Standing Senate Committee on Banking, Trade and Commerce, entitled Credit unions and the use of the word banking, tabled in the Senate on October 31, 2017.

Hon. David Tkachuk moved the adoption of the report.

He said: I just have a few remarks, honourable senators. This past summer, the Office of the Superintendent of Financial Institutions issued an advisory warning that it would strictly enforce section 983 of the Bank Act. That section governs the use of the terms “bank,” “banker” and “banking” by institutions, limiting it to federally regulated financial institutions.

This caused tremendous concern among the credit unions in Canada, which are mostly provincially regulated and which have used the term not as a formal description of their business or in any official description of who they are, but colloquially, like the rest of us: “We’re going to go and do our banking,” for instance, or maybe using the term “banking” in an advertisement on television.

They estimated that it would cost them some $80 million to comply with the advisory.

At that time, I wrote a letter to the federal Minister of Finance and provincial ministers in the summer in my personal capacity as a senator from Saskatchewan, where credit unions play a vital role in our economy. I probably wasn’t the only one expressing concern, because the advisory was put on hold for further consultation.

When the Senate returned from the summer break, the members of the Banking Committee agreed to conduct a couple of hearings on the issue with stakeholders and officials to get a sense of what was at stake and to see if some sort of compromise could be reached. Every senator on the committee agreed that the advisory went too far, and it seems to us from our discussion with them that the government agreed as well.

As a result of our hearings, officials agreed to further consultations with the affected institutions to reach some sort of compromise. In fact, we outlined one such compromise in this report, which would allow deposit-taking institutions regulated at the federal or provincial level to use the term in verb form.

We eagerly await the outcome of the consultations.