Canada's credit unions have caught a break -- at least temporarily.

In July, credit unions were told they would no longer be allowed to use the term 'bank' or banking' to describe their services.

But late last week, the Office of the Superintendent of Financial Institutions (OFSI) said it was suspending its crackdown on terminology while the government further studies the issue.

The news has been welcomed by Libro Credit Union, the dominant player in southwestern Ontario. 

Libro Credit Union headquarters

Libro Credit Union sign outside its headquarters in London. (Bernard Graham/CBC)

"It's a common sense approach and we really appreciate (the regulator) taking the time to consider it within the review of the full bank act, " said Tania Goodine, the credit union's executive vice-president of engagement. 

Goodine declined to speculate on what the regulator's final decision will be. 

Tania Goodine

Tania Goodine, executive vice president of engagement for Libro Credit Union welcomes the regulator's decision to back away from a ban on the use of the word 'bank'.

"I think listening to credit union members and the public at large in Canada is very important, and we're very proud of the members across Canada who spoke up and advocated to their MPs for the government to take that common sense approach on the word."

Libro president Stephen Bolton said earlier that it would cost the company at least half a million dollars to comply with the original decision of the OFSI by removing the words 'bank' and 'banking' from signs, legal contracts and documents.

Final decision pending

A spokesperson for the Office of the Superintendent of Financial Institution said the decision to suspend enforcement followed the release of a second consultation paper from the Department of Finance.

"Once the Department of Finance has announced the outcome of its consultation on these restrictions, OSFI will communicate its revised expectations for compliance with the Advisory, as appropriate and necessary," wrote Annik Faucher in a statement to CBC News.  

"While the enforcement of the OSFI Advisory is suspended, the Bank Act as it stands still limits the use of the words Bank, Banker and Banking to banks only,"

A final decision from the regulator regarding the use of the word 'bank' isn't expected for at least 18 months.