PIAC Applauds New Financial Sector Legislation

Consumer Group Applauds New Financial Sector Legislation, But Warns that Further Measures are Needed to Protect Consumers

Last year, consumers organizations called on the government to implement a Consumer Charter for Financial Service Reform. “The new legislation is a good step foward in implementing the Consumer Charter,” said Angie Barrados, Researcher, Public Interest Advocacy Centre. “We are pleased to see that most of the elements of the Consumer Charter are included in the legislation.”
However, the legislation does not deal with emerging consumer problems, such as the proliferation of unregulated “white-label” ATMs. Also, the details of many important consumer measures are not clear because they are to be implemented through regulations and MOUs.
This is how the government’s new legislation compares to the Consumer Charter for Financial Service Reform:

Creation of a Consumer Protection Bureau A

“Setting up the Financial Consumer Agency of Canada (FCAC) is an important step forward. This is the first time that there will be real oversight of banks’ consumer protection commitments,” said Barrados. “As the new Agency is being set up, we will be watching carefully to ensure that it is given enough resources and a wide enough mandate to be an effective watchdog for consumer interests.”

Guaranteed Access to Financial Services for Vulnerable Consumers B+

“This legislation contains important steps toward universal access to basic financial services, such as the low cost account and the rules on opening bank accounts. These measures are to be implemented through regulations and MOUs, so we can not give the government an “A” until the details are negotiated. Also, we are disappointed that there has not been any action on cheque hold policies,” said Barrados.

Support for Independent Research, Oversight and Advocacy Incomplete

“The government gets an “incomplete” here because we have not seen a clear commitment to ensuring a public voice in on-going consumer protection in the banking sector. For instance, we would like to see a consumer advisory committee to the FCAC,” said Barrados.

Ensure Bank Branch Closures are Handled Responsibly in the Public Interest B-

“Since the whole reform process has started, the closure of branches in rural areas and poor urban areas has accelerated, with at least 400 actual or planned closures since 1998,” said Barrados. “Banks will now have to give notice of closures to communities and convene consulations in some cases, which is important, but there are no measures to ensure continued access to financial services for communities that lose their branch.”

Improved Disclosure and Transparency in Financial Services A

“We have high hopes of the FCA in ensuring that financial services agreements, contracts, service fee billings and marketing documents are available in understandable language and standardized formats,” said Barrados.
h3.Complaints and Dispute Resolution Process A
“We are pleased with the provision for a new Canadian Banking Ombusdman,” said Barrados.

Public Accountability Statements A-

“The Public Accountability Statements are a good step foward, but we will have to wait and see what information they will actually contain,” said Barrados
For more information:
Angie Barrados
Researcher
Public Interest Advocacy Centre
613-562-4002 ext. 25 or email: barrados@web.net
Also, see our website at www.piac.ca for more information.