Supervision and promotion branch (transition binder 2019)

Supervision and promotion branch at a glance

Financial consumer protection is an integral part of the Government of Canada’s oversight of the financial sector.

Through its supervisory activities, FCAC monitors the compliance of federally regulated financial entities (FRFEs) with federal consumer provisions, voluntary codes of conduct and public commitments that protect Canadian consumers and merchants.

Supervision and promotion branch: Structure and responsibilities

• Teresa Frick, A/Managing Director (REX-08) and Director, Supervision (REX-07)
  • Kevin Thomas, Manager, Promotion and Policy (RE-06)
  • Nadia Brault, Manager, Enforcement (RE-06)
  • Philippe Pellerin, Manager, Supervision (RE-06)

Promotion and Policy Division key responsibilities

• Promotes compliance to minimize risks to consumers
• Conducts research initiatives (including industry reviews), provides policy advice to the Commissioner, and promotes the work of the Branch

Supervision Division key responsibilities

• Supervises federally regulated financial entities to ensure they comply with their market conduct obligations
• Responsible for day-to-day interactions with FRFEs

Enforcement Division key responsibilities

• Investigates potential breaches of market conduct obligations
• Makes recommendations on enforcement action that is proportionate to the severity and circumstances of a breach

Role of Supervision and Promotion Branch

• Ensures the market conduct of federally regulated financial entities complies with federal legislation and regulations
• Promotes adoption of policies and procedures designed to implement legislation, regulation, voluntary codes of conduct and public commitments by federally regulated financial entities
• Monitors entities’ compliance with voluntary codes of conduct and their own public commitments
• Informs consumers about their rights and responsibilities when dealing with financial entities and about the obligations of payment card network operators to consumers and merchants

Who we regulate

• Banks: 58
• External complaints bodies: 2
• Property and casualty insurance companies: 144
• Payment card network processors: 7
• Trust and loan companies: 55 
• Retail associations: 1

What we do

• We promote compliance
  • Research + stakeholder engagement to catch problems in the  industry putting consumers at risk, and promoting “best practices” that promote consumer protection
  We supervise compliance
  • By monitoring entities closely and regularly, we avert/catch/minimize/address risks to consumers
  We enforce compliance
  • We investigate potential breaches of consumer rights and ensure entities fix problems
• We supervise compliance
  • By monitoring entities closely and regularly, we avert/catch/minimize/address risks to consumers
• We enforce compliance
  • We investigate potential breaches of consumer rights and ensure entities fix problems

How we do it

• Research:
  • Gathering “intel” via in-depth reviews of industry practices, consumer complaints and stakeholder engagement
  • Ongoing monitoring of national/global issues/trends
• Promotion:
  • Sharing intel, policy developments with regulated entities
  • Informing them of FCAC expectations as to how they manage risk to consumers
• Policy:
  • Sharing intel with Department of Finance
  • Supporting legislative and regulatory policy development 
• Supervision (monitoring):
  • Regular, close engagement with regulated entities
  • Monitoring tools include annual update of file re: each Big Six entity’s business model/risk profile vis-à-vis consumer protection
  • Addressing lower-grade risks directly with entities
• Enforcement:
  • Investigating breaches
  • Drafting compliance reports recommending enforcement actions such as notices of violation

Priorities for 2019-2020

• Ministerial “asks” :
  • “Industry review” of bank complaint-handling processes and external complaints bodies (ombudsmen)
  • Development of banking code of conduct to protect seniors
• Staggered implementation of new Financial Consumer Protection Framework (Received Royal Assent in December 2018), including:
  • Commissioner must publically identify entities found to have committed a violation of a consumer provision
  • Penalty amounts increase from max. $500K to max. $10M/violation
  • Whistleblower protection
• Create efficiencies in collection of information for supervision and enforcement processes
• Mystery shopping:
  • 700 “undercover” visits to replicate consumer experience in terms of banks’ adherence to consumer-protection provisions      
• FCAC’s Supervision Framework:
  • Risk-based approach requires significant adaptation by FCAC and industry, much of it already accomplished
  • New ”Market Conduct Profiles” provide a regularly updated portrait of each regulated entity and an important means of monitoring industry compliance and identifying emerging risks
• Debit and credit card industry:
  • Report on consumer protection among industry participants not directly supervised by FCAC
• Enforcement:
  • Ongoing work on investigations and compliance reports
• General:
  • Follow-up on multiple compliance issues that emerged out of 2018 review of bank retail sales practices—all divisions