September 13, 2017 Dear members and friends of CUA:  As you know, CUA has been an active part of national advocacy efforts in support of common sense and fairness, enabling credit unions to continue the common practice of speaking to consumers about what we do – banking.

I am pleased that our collective voices have been heard. On August 11, the Federal Government released a Consultation Paper as part of the Bank Act review that is currently underway. By doing so, the Minister of Finance signaled an intent to review the restrictions on the use of banking terminology by credit unions and other regulated deposit-taking institutions. The Government is conducting a Public Consultation process on this matter until September 29, 2017. Public consultations are a critical feature of policy development in Canada as they provide a forum to gather perspectives from individuals and organizations that are affected by a particular issue.

The Federal Department of Finance is seeking submissions that provide comments and views on two key questions pertaining to the issue of credit unions’ usage of the terms “bank” and “banking”:

1. Should credit unions be allowed to use the terms “bank” and “banking” in a verb form to describe their activities? and, 2. What limitations, if any, should be established on the use of these terms by credit unions to “avoid marketplace confusion and ensure appropriate protection of consumers”?

Although this is a positive development, it is critical that the Federal Government hears from individual credit unions and their employees, members, stakeholders and community partners. Each submission will help to inform Finance Canada as they work to modernize the Bank Act in a way that we hope is fair, focused on the consumer and on the overall health of our sector.

What is CUA’s position on this issue?

Our position continues to be clear and unequivocal on the first question. Yes, credit unions should be allowed to use common words and phrases such as “bank”, “banking” and “to bank” as they describe our business activities in a way consumers understand. As provincially regulated financial institutions, credit unions should continue to be given full usage of these words and phrases when used in verb form, as we have been doing for decades without issue. CUA does not call itself a bank. We use the phrase “to bank” in similar fashion to a person saying, “I’m going to eat my lunch”. Eating and banking are activities. Banking is what we do.

On the second question of whether limitations or restrictions should be placed on the use of these words or phrases, our answer is one of extreme caution. In the Consultation Paper, the Federal Government describes a possible limitation being a “prominent and closely proximate declaration that the institution is not a bank” on external marketing items such as a brochure. We are not in favour of this type of limitation regarding marketing and/or external communications materials as it sends a clear and inaccurate message to consumers: you can’t do your banking at a credit union.

• Placing limitations and restrictions related to marketing material is not required. CUA operates with full transparency and in the interests of our membership.  Our processes make clear to consumers that they are dealing with a credit union at every milestone ranging from opening an account to accessing funds and products. The organization’s legal name (Credit Union Atlantic) is clearly presented on all banking documents reviewed and signed by the consumer. The account opening process also requires that a consumer purchases a $5.00 share to become an owner; this is not something that takes place at a bank. Consumers are given both verbal and written communication that makes clear they are dealing with a credit union. We believe our current practices are suitable and effective in disclosing our status as a credit union.
• Placing limitations and restrictions related to marketing material will cause undue harm to credit unions and consumers. Requiring credit unions to place what can only be described as a disclaimer on their marketing and communications materials will result in reputational damage and unwarranted speculation, suggesting that credit unions are less secure, less credible and offer lesser quality services and products to Canadian consumers. Over 5.6 million Canadians do their banking with a credit union, representing 15% of the population. For 13 consecutive years, credit unions have received top honours in various service excellence awards and rankings. We are a relevant and important part of the banking sector in this Country. Further, part of supporting a competitive and innovative sector is ensuring that consumers have fair access to information. Credit unions deliver the same types of products and services through the same types of channels (in branches and through online banking, mobile banking apps and automatic banking machines) and our marketing efforts are simply presenting those facts. We stand firm in the belief that our current approach to marketing and external communications is fair and focused on introducing consumers to helpful information. Everyone has the right to know their options.

CUA recommends that disclosure (defined as having the words “CREDIT UNION” placed prominently) be required on all official banking documents that require the signature of the consumer in order to access banking products and/or services from a credit union (e.g. account opening, loan applications and other such documents).

What should I include in my submission?

As a member-owner, your voice is an important input to this Public Consultation. CUA would be pleased to assist you in completing your submission. We have prepared a draft letter that you can download and modify as you wish. In addition to sharing your opinion and experiences with CUA, we encourage you to include the following points as they are critical to our position:

• Credit unions play a vital role in the Canadian financial sector (i.e. how have we provided you with products, services and/or advice that has made a positive impact on the financial health of you and/or your family).
• Credit unions make a difference in the communities and economies in which they operate.
• You absolutely understand that you are doing business with a credit union.
• You describe the activities you conduct with CUA as banking. 

Where can my submission be directed?

It is very important that supporters and stakeholders of credit unions be heard. Once complete, you can share your submission by email to fin.legislativereview-examenlegislatif.fin@canada.ca or by mailing your letter to the address below. You are also welcome to drop your submission off to any location of CUA on or before September 25, 2017; we would be pleased to submit it to the Department of Finance.

Director, Financial Institutions Division Financial Sector Policy Branch Department of Finance Canada James Michael Flaherty Building 90 Elgin Street Ottawa, ON K1A 0G5

With sincere and continued appreciation for your ongoing support, 


Marie T. Mullally, FCPA, FCA
President & CEO