Standing Senate Committee on National Finance (NFFN) (May 28, 2024)
ISSUE: FCAC’s low-cost/no-cost bank account commitment (Budget 2024)

Key points

• In fall 2023, the Minister of Finance directed FCAC to work with banks to update the original Low-cost and No-cost Commitment from 2014.
• FCAC was tasked with expanding the features of low-cost accounts to reflect modern banking, expanding the accessibility of no-cost accounts to more Canadians, and expanding the list of financial institutions that sign on to the updated commitment.
• As part of this work, FCAC met with financial institutions, experts in the field of financial consumers, and other stakeholders. We also invited public views and conducted research into consumer awareness and needs.
• Our research shows that vulnerable consumers in particular would benefit from having access to no-cost accounts.
• Key insights from FCAC’s engagements and research, including a public opinion survey, include the following:
  • Accounts with no or low monthly fees and a greater number of transactions per month are important features for most Canadians.
  • Few Canadians are aware of the existing public commitment to provide low-cost or no-cost account options. 84% of participants in FCAC’s public opinion research were unaware of the public commitment.
  • For consumers facing financial vulnerability, some do not have a chequing account at all and for those that do, many don’t have access to no-cost accounts at the banks signed on to the Commitment (though they would have access to no-cost accounts at other banks that offer no-cost banking to all Canadians).
• We are committed to moving forward and optimistic that, with industry collaboration, an improved commitment can be implemented.

Q&As

1. What is the latest on negotiations with banks on an updated low-cost/no-cost commitment?

• Discussions with banks continue.
• We are committed to moving forward and optimistic that an improved commitment can be implemented with industry collaboration.

2. When do you expect to have a final updated commitment in place?

• We are optimistic that an updated agreement with banks can be reached this year.
• Low-cost and no-cost accounts are available now under the current commitment, established in 2014.
• In 2014, 10 federally regulated financial institutions signed on to a public commitment to provide banking services at a nominal cost to Canadians. These institutions also agreed to provide no-cost banking services to youth, students, Guaranteed Income Supplement (GIS) recipients and Registered Disability Savings Plan (RDSP) beneficiaries.
• In addition to the low-cost and no-cost accounts available under the current commitment, many financial institutions in Canada offer low-cost and/or free monthly banking, with unlimited transactions.
• Canadians should shop around to find banking products and services appropriate for their needs.
• To help consumers make informed financial decisions, such as choosing a bank account, FCAC provides factual and unbiased information and resources, including information about low-cost and no-cost accounts and the Bank Account Comparison Tool.