You'd lose your $5. BMO's online banking system is an outgrowth of their telephone banking system, which used 4-6 digit PINs. (Thankfully not the same PINs as used with their bank cards though! Or rather, each card had two PINs, one for use as a card and one for use with telephone/internet banking.)

I'm sure they're all stored in plaintext in an ancient mainframe system, but that's not the reason for the odd requirement.