Banking: ¿Que pasa?

A Canadian-Cuban credit-card crisis.

Some Canadian credit card holders have been unwittingly drawn into the half-century-old dispute between Cuba and the United States. And it’s all because Regina-based CUETS Financial Ltd., the largest provider of MasterCards to Canadian credit unions, was sold to the Bank of America last October. The North Carolina–based bank processes client purchases south of the 49th parallel, so it is governed by U.S. law prohibiting transactions from Cuba and other sanctioned countries, such as Iran, North Korea and Sudan. That means a CUETS-issued credit card in Cuba is worthless.

Glenn Friesen, CEO of Steinbach Credit Union in Manitoba, says news that its members’ MasterCards wouldn’t work in Cuba, the second-most popular sun destination for Canadians after Mexico, took him by surprise. “We weren’t expecting this,” says Friesen, who adds that Steinbach staff is advising its members to take multiple payment methods to Cuba, including cash and travellers’ cheques. “I wouldn’t like to tell my members to go across the street and get a Visa card [from a bank], but if you want to use a credit card in Cuba, that’s the only other option,” he says.

Betty Riess, a spokesperson for the Bank of America, won’t speculate on how Fidel Castro’s mid-February resignation might impact the use of CUETS-issued MasterCards in Cuba in the future. And she says that CUETS doesn’t release how many credit card holders it has in Canada. (In fact, more than five million Canadians belong to a credit union. In Manitoba, for example, there are 560,000 credit union members and more than 50,000 of them have a CUETS credit card.)

Not all Canadian MasterCards have been drawn into the dispute, however. Ron Monet, a regional director of corporate communications for BMO Financial Group, says its clients have no reason to worry. “It’s our card, we’re the issuer and we process the transactions in Canada,” he says. ¡Viva BMO!