Credit unions can use coin counting machines to stay competitive amid new regulations
Coin counting machines are tools that credit unions can use to remain competitive, not only with one another but with traditional banks. Institutions that offer convenient services such as that one can gain an edge over businesses that do not, and credit unions in particular could utilize them to remain on par with their opposition in terms of retaining and gaining members.
And in light of recent regulatory news from the Office of the Superintendent of Financial Institutions, Canadian credit unions are now faced with a new challenge in their efforts to compete with traditional banks.
Credit unions facing restrictive regulation can continue to compete with coin counters
The office issued an advisory on June 30 detailing adjustments to their interpretations of certain restrictions within the Bank Act, specifically regarding how the words "bank," "banker" and "banking" are used.
According to the advisory, the OFSI has seen abundant usage of the words "bank", "banker" and "banking" by non-bank businesses that provide financial services, and the restrictions apply directly to them. Some of these barred establishments include federally regulated loan and trust companies, provincially regulated financial institutions and those service providers that are unregulated.
Although credit unions are provincially regulated, according to the CCUA, they too are subject to the word usage restrictions detailed the advisory.
The OFSI has given a list of deadlines by which non-bank entities must have their online, print and physical materials omitted of words featuring "bank."
The word must be removed from all online sites by December 31, 2017, all print material by June 30, 2018, and all physically posted signs by June 30, 2019.
According to the Canadian Credit Union Association, credit unions have operated in Canada since 1908 and have used the term "bank" for their promotions for years with federal support without facing any penalties.
On July 4, the CCUA issued an official statement detailing their frustration with the prohibitory rule.
"This rule will prevent credit unions from advertising their 'business banking' services or even having an 'on-line banking' button on a website," said Martha Durdin, the CCUA's president & CEO, in the statement. "Having to create and popularize new words is an unnecessary and expensive undertaking, and will make it difficult for credit unions to compete fairly with banks."
Competing with banks is something credit unions constantly have to face. The new regulation limits them from using a term the public is familiar with and it's unclear what effect the move may have on the future of credit union membership. But a tool like coin counting machines can help credit unions keep up with their competition and remain in favor in the eyes of their members.