The Financial Consumer Agency of Canada (FCAC) is the outcome of an extensive period of study and public consultation on financial sector reform that began in December 1996.
The 5-year process got underway with the formation of the Task Force on the Future of the Canadian Financial Services Sector. In September 1998, this task force presented the federal government with its report, Change, Challenge, Opportunity (known as the MacKay Report). The report stated that “the current framework for consumer protection is not as effective as it should be in reducing the information and power imbalance between institutions and consumers.” Two parliamentary committees subsequently held public consultations across the country on this and other findings, and presented their recommendations.
What emerged through this process was a broad consensus on ways to improve the financial services sector. In June 1999, the government released a policy paper, Reforming Canada’s Financial Services Sector: A Framework for the Future, outlining 57 reform measures. Among them was a proposal for a financial consumer agency that would oversee consumer interests and improve consumer protection.
On October 24, 2001, the Financial Consumer Agency of Canada Act came into force. With that, oversight of consumer protection measures that had previously been dispersed across the federal government was consolidated under a single federal agency: FCAC. The Agency was mandated to strengthen oversight of federally regulated financial entities, and to increase financial consumer education.
On July 11, 2010, the Bank Act was amended to provide a framework for federal credit unions. Prior to this, credit unions were restricted to operating in a single province; the amendment permits them to expand nationally, subject to FCAC supervision on consumer protection issues.
On that same date, amendments to the Financial Consumer Agency of Canada Act also came into effect, further broadening FCAC’s role:
- FCAC increased its efforts in research, field testing and stakeholder engagement to provide information to the government on financial consumer trends and emerging issues
- FCAC expanded its consumer information role to cover all matters related to protecting consumers of financial products and services
- FCAC became responsible for ensuring payment card network operators’ compliance with the Payment Card Networks Act (PCNA) and any related regulations, and for monitoring the operators’ adherence to the Code of Conduct for the Credit and Debit Card Industry in Canada (the Code)
- FCAC became responsible for promoting public awareness of the PCNA and the Code.
In 2013, the Act was amended again to create a new leadership position within the Agency. In 2014, the Governor in Council appointed Canada’s first Financial Literacy Leader. Jane Rooney served in this role from 2014 until 2019.
Since FCAC’s creation, the federal government has introduced regulations under the Bank Act and other legislation related to the Agency’s mandate. In 2012, for example, Negative Option Billing (Banks and Authorized Foreign Banks) Regulations came into force, followed the next year by new Complaints (Banks) Regulations. In 2014, Prepaid Payment Card Regulations were issued to address emerging payment products for consumers.
In addition to legislation and regulations, federally regulated financial entities must also operate according to various public commitments. Responsible for monitoring this, FCAC’s oversight of consumer protection expands and adapts with every new public commitment. Examples of two such commitments, both introduced in 2014, are the Canadian Bankers Association's commitment on powers of attorney and joint deposit accounts, and its commitment to provide information on mortgage security.
In fall 2018, the Government of Canada introduced, through the Budget Implementation Act, 2018, No. 2, legislation to modernize Canada’s Financial Consumer Protection Framework (FCPF) and to strengthen FCAC’s mandate and grant it additional powers.
Among a number of key changes, the legislation strengthens FCAC’s mandate to promote, monitor and enforce the compliance of federally regulated financial entities.
The new legislation also strengthens FCAC’s financial literacy role by better integrating it into the Agency’s mandated purpose.
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