The
Bank Act was originally passed in 1871. The terms of the
Act provide for a statutory review of the
Act on a regular basis to ensure that legislators update the
Act in order that it keep pace with developments in the financial system. Historically, this was done on a decennial basis. In 1992, this requirement was changed to every five years. The
Act contains a "sunset" clause providing that it and the bank charters provided by it will expire unless the statutory review is conducted every five years. In 2016 the Federal Government proposed a two-year extension to the review deadline. The most recent statutory review of the
Act took place in 2019 with the next review scheduled for 2023.
Credit unions In 2010, the
Parliament of Canada passed amendments to the
Act to allow
federal credit unions to exist as a new class of financial institution. Credit unions differ from banks in that they are member-owned, democratically controlled and governed by co-operative principles. The
Bank Act allows that federal credit unions may either be created by five persons (of which three must be individuals), or through the continuance of one or more credit unions existing within provincial jurisdiction. The provisions came into force at the end of 2012. The first federal credit union in Canada was
UNI Financial Cooperation (formerly Mouvement des caisses populaires acadiennes), based in
New Brunswick, which converted to a federal charter in 2016. On June 30, 2017, the
Office of the Superintendent of Financial Institutions issued an advisory, stating that it planned to enforce the
Bank Act's prohibitions on using the word or verbiage "bank" in connection to any financial service that is not a bank. The terms were required to be removed from websites by the end of 2017, from print materials by the end of June 2018, and from physical signage by the end of June 2019. The announcement was criticised by credit unions, who believed that it would make it difficult to market their services in a comparable manner to banks, as well as the costs of updating marketing materials to comply with the mandate. The OSFI suspended the advisory in August 2017, after the federal government stated that it would review the rules. In February 2018, the
Bank Act was amended as a riser to the federal budget, allowing credit unions to use banking vernacular to market their services. == Structure ==