Stop calling me the “B” word
That’s what Canadian credit unions can’t say anymore beginning June 30, 2018. They can’t use the words bank, banking, banker. No more “banking made easy” or “check out our mobile banking.”
I reached out to my good friend, and Canadian, Tim McAlpine to find out what’s what.
Tim is the President and Creative Director of Currency Marketing and is best known in the U.S. for developing the Young & Free Marketing program as well as the CUES Next Top Credit Union Exec competition. But what many people don’t know, Tim is also the board chair of Mount Lehman Credit Union, a small, single-branch credit union in Canada. Here’s what Tim has to say about this ruling:
“The no “bank, banking, banker” rule has been part of the Canadian Bank Act for some time, it’s only recently that OSFI (The Office of the Superintendent of Financial Institutions) issued a letter to credit unions stating that it’s illegal to use these words and if a credit union continues to do so, the officers of the credit union can be criminally charged. OSFI is not messing around! Why now? With the advent of so many non-bank, unregulated fintech startups hitting the market, the banks have lobbied hard to OSFI to enforce the rules. Unfortunately, credit unions are lumped into the non-bank category even though they are regulated. The CCUA (Canadian Credit Union Association) has done a good job to activate the credit union industry across the country. From my point of view, credit unions in Canada have been moving away from their roots for some time now. In fact, 11 of the largest 20 Canadian credit unions have dropped “credit union” from their outward branding. This rule enforcement could be the catalyst needed to get back to the co-operative roots and really define their own place in the Canadian consumers’ minds. We’ll see how it all plays out.”
I think this presents an interesting challenge. I began my credit union (not banking) career in 1980. It was drilled into me early on that we had “members” not “customers” (the “c” word) and that they were owners. Their $5.00 membership “share” was proof. We just began offering share draft accounts – not checking accounts. Because we were different. We talked a lot about our governance back then. A volunteer board of directors elected by the membership at the annual meeting (that members actually attended). Each member in good standing could run for the board. We were essentially “owned and operated by our members.” And we had what Seth Godin would call a Tribe.
Then things started to change. Share drafts were dumped for checking accounts because that’s what people were used to (from the banks). Adult learning theory would say this makes sense. Adults learn when they can relate it to something they already know and understand. They have a bank account at Wells Fargo and it sucks. We don’t suck as much – we have “better banking.” Many members will say “I bank there!” and are talking about their credit union. They don’t know they belong.
We continue to struggle to differentiate ourselves from the “B” word so imagine if WE were no longer allowed to use bank/banker/banking?
I just pulled up my credit union website and in the first click saw “Online services” that includes mobile banking, text banking, and online banking. Nope.
I’ll admit it, I’ve never been fond of the words “credit union.” I wish we had swapped those out for “financial cooperative” decades ago. It would tell a better story. Then people could have said, “I belong to the co-op.” “My money is cooperating, not banking.” Or something like that….
People are already worried that the U.S. bankers are going to run with this and try to adopt the same ruling. The reason behind this ruling in Canada should save us:
The Canadian Bankers Association argues that the word “bank” conveys a mark of security, reliability, and oversight that consumers have come to trust.