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.
By way of a news release on August 11, 2017, OSFI has suspended the compliance expectations for Advisory 2017-01, pending the review of submissions to a second consultation paper.
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.
Note: This article is of a general nature only and is not exhaustive of all possible legal rights or remedies. In addition, laws may change over time and should be interpreted only in the context of particular circumstances such that these materials are not intended to be relied upon or taken as legal advice or opinion. Readers should consult a legal professional for specific advice in any particular situation.