The owner of a successful brokerage known for fighting the Big Five will now change the firm’s name rather than face the possibility of a hefty fine or jail time over what the law suggests is a misappropriation of the word “bank.”
The owner of a successful brokerage known for fighting the Big Five will now change the firm’s name rather than face the possibility of a hefty fine or jail time over what the law suggests is a misappropriation of the word “bank.”
“It became obvious to us and our legal counsel that the federal government was digging in its heels on this despite the fact that it was the government four years ago that granted us a federal trademark on the name 'Bankfighter' issued under the category of mortgage broker,” said Darick Battaglia, broker/owner of Barrie-based “Dominion Lending Centres Bankfighter.” Effective July 31, it officially changes its name to “Dominion Lending Centres YBM Group.”
“My lawyers felt that I had a good chance of retaining the name, but it may take a long time and the legal costs would be high,” said Battaglia, one of the industry’s top performers. “It was a very hard decision, but rather than fight the federal government I decided to change the name.”
The move comes almost a year after the Financial Services Commission of Ontario notified Battaglia that it had received an official complaint, arguing his use of the name “Bankfighter” contravened the federal Bank Act and its restrictions on any and all use of the word bank by unregulated entities.
More specifically, according to Subsection 983(3), “Every entity that acquires, adopts or retains the name of a bank holding company and every person who uses the name or any identifying mark of a bank holding company to indicate or describe a business in Canada or any part of a business in Canada, without being authorized to do so by this Act or any other Act of Parliament, is guilty of an offence.”
Subsection 983(2.1), applies the same warning to “individuals” deemed to have misappropriated the word.
FSCO referred Battaglia, as well as the complaint, to the feds, specifically the Office of the Superintendent of Financial Institutions (OSFI). It would ultimately direct Battaglia to cease and desist use of “Bankfighter,” threatening him with a maximum fine of $5 million or 10 years in prison for continuing to use a name inspired by the tagline from an old broker network ad. The brokerage head would quickly make that name his own, building up one of the biggest teams and funded volumes in his market.
“I'm not aware of where the complaint originated and FSCO's reply was that the information was protected by the Privacy Act,” Battaglia told MortgageBrokerNews.ca.
His hope is goodwill garnered under the old name will transfer to “YBM,” an acronym for “Yellow Brick Mortgages.” Over the past four years, the company has made a name for itself with some of the most competitive rates in the region. Its aggressive model has also been credited with helping to elevate public awareness about the broker channel and loosening the banks’ grip on mortgage originations in Central Ontario.
Battaglia has no plans to alter that business plan, although the costs associated adjusting marketing materials, car wraps, billboards, storefront signs, stationery, four company websites and those of his 65 agents and brokers have cut into operating budgets. The brokerage head is asking other mortgage brokers to learn from what has been an expensive, but also very time-consuming lesson.
“This government move is a warning shot to Canadian brokers that if you have the word ‘bank’ in your name you may be open to the same attention if someone launches a complaint or OSFI decides to move on its own,” he said.
