Appearance before the Standing Committee on Finance (July 7, 2020): Opening remarks

Opening statement of Judith Robertson Commissioner of the Financial Consumer Agency of Canada to the House of Commons Standing Committee on Finance for its study on the “Government’s Response to the COVID-19 Pandemic”

Ottawa, Ontario July 7, 2020 (3-5 p.m.)

Thank you, Mr. Chair, I am very happy to be here today and thank you for the invitation to update the committee on how FCAC is responding to the COVID-19 pandemic.

Merci, Monsieur le Président. Je suis très heureuse d’être ici aujourd’hui et je vous remercie de m’avoir invitée à comparaître devant le Comité afin de faire le point sur la façon dont l’ACFC répond à la pandémie de COVID-19.

As requested, I will be speaking only in English to avoid any technical difficulties.

I am joined by 3 colleagues: Frank Lofranco, Deputy Commissioner of Supervision and Enforcement, Teresa Frick, Director of Supervision, and Ruth Stephen, Director of Strategic Policy, Research and Experimentation. They are here to provide additional detail on specific program areas, if desired by the Committee.

I will first give a short background on the Agency and then focus my comments on our response to the pandemic.

FCAC is a federal agency that operates independently and is primarily funded by the financial institutions we regulate. Our mandate is to protect Canadian financial consumers.

We do that in two principal ways: first, we supervise federally regulated financial entities, primarily banks, for compliance with consumer protection measures as set out in legislation, public commitments, and codes of conduct.

Second, we promote financial literacy through education and raise awareness of consumer issues and rights, as knowledgeable consumers are better-protected consumers.

I was appointed Commissioner last August and since that time we have been focused on preparing the Agency for the next stage of our evolution. Even prior to the unique challenges of COVID-19, we had a lot on our plate.

Our role was recently strengthened by legislative changes to the FCAC Act and the Bank Act that received Royal Assent in December 2018. They provide new powers to the Commissioner, embed financial literacy as core to our mandate and modernize Canada’s Financial Consumer Protection Framework.

Some of these provisions came into force on April 30, 2020. The other elements will come into force over time as they require the regulations that are currently being drafted and time for both industry and FCAC to prepare for implementation.

We have made remarkable progress over the past year. We have refreshed our vision and mission statements, introduced a new organization structure, recruited a new senior management team, published our strategic priorities, and improved the transparency of our adjudicative process.

Of course, there is still much to do. FCAC has a team of about 160 people who have been working remotely since the middle of March. Like many organizations, this is a difficult new reality for our employees and has required us all to adjust and adapt. But I am happy to report that, thanks to the efforts of our dedicated team, we have adapted and maintained our progress even during these unprecedented times.

Turning to our COVID related actions – in our supervisory work, we have maintained close contact with the financial institutions we regulate and have pro-actively communicated our expectations, including that they prioritize providing safe access to financial services, particularly for vulnerable consumers.

We adjusted our priorities so that financial institutions could re-assign internal resources to adapt their operations and accommodate the demand for financial relief. For example, we paused our industry consultations on the new Framework for the past few months. That work is now back on track; however, we recognize that we need to remain flexible and may need to adjust again as the situation evolves.

Despite considerable disruption and pressure on their operations and employees, banks have demonstrated a commitment to ensuring that financial services remain available and they have shown a willingness to work with impacted consumers who request financial relief.

We consider the relief measures to be public commitments and are therefore monitoring that they are implemented in a fair and appropriate manner. To that end, we have been receiving weekly reports on payment deferrals for mortgages and other credit products since April. Based on our data, while the implementation has not been perfect, most consumer requests have been approved, and in a timely manner.

On the consumer education side, FCAC is supporting consumers with unbiased, fact-based information through our call centre and on-line resources. Our call centre volume has increased by 28% compared to the same period last year. Our online resources have also seen increased traffic as we quickly created and promoted new pandemic-specific information that is responsive to the current situation. We are committed to providing updates as the situation evolves.

Finally, through our ongoing research programs, FCAC monitors financial consumer trends and behaviours. For example, we are building on the baseline established by the Canadian Financial Capability Survey, which we published last fall. Starting this month, we will be launching two new monthly surveys to update that information and assess the changes resulting from the impact of the pandemic. These survey findings will help inform our supervision efforts and enable us to refine and update our educational information. 

From the outset of the pandemic, we have worked closely with our stakeholders to gain insights into the issues consumers are facing. This includes the 18 Financial Literacy Networks which represent over 600 community organizations across the country. We have also initiated communication with provincial regulators and have been coordinating closely with the other members of the Financial Institutions Supervisory Committee, or FISC, which as you know, includes the Department of Finance, the Bank of Canada, CDIC, OSFI and ourselves.

In addition, FCAC actively participates internationally in organizations, such as the OECD, where we share information and ideas and learn about best practices elsewhere.

Through all these efforts and initiatives, we aim to live up to our vision which is to be a leader and innovator in financial consumer protection. Consumers must have confidence in the financial system, especially in times of crisis. The actions we and our FISC partners have been taking in response to the pandemic are designed to contribute to that confidence and FCAC is committed to working together to uphold the protection measures that consumers have come to rely on.

This completes my opening statement. We are happy to answer questions that you may have.