Opening statement to the Standing Committee on Industry and Technology (INDU) by Dr. Supriya Syal, Deputy Commissioner, Research, Policy and Education 

October 10, 2024

Ottawa, Ontario

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Thank you, Mr. Chair, for the introduction, and to the Committee for inviting us to appear before you today.

I will deliver my remarks in English.

My name is Supriya Syal. I am the Deputy Commissioner of Research, Policy and Education at the Financial Consumer Agency of Canada, or FCAC.

I am joined today by Frank Lofranco, Deputy Commissioner of Supervision and Enforcement.

We welcome this opportunity to contribute to the Committee’s study of Credit Card Practices and Regulations in Canada.

FCAC is an independent federal agency that protects the rights and interests of consumers of financial products and services.   

The Agency carries out its mandate in two principal ways.

First, as a strong and effective regulator, we supervise the compliance of federally regulated financial entities, such as banks, with consumer protection measures set out in legislation, public commitments, and codes of conduct.

Second, FCAC is responsible for the National Financial Literacy Strategy and works with stakeholders across the country to strengthen the financial literacy of Canadians and build their financial resilience. This includes:

• collaborating with researchers and academics on behavioural science interventions that support positive financial outcomes, such as saving, budgeting, building financial confidence, and managing debt, including credit cards

• educating Canadians about their rights when dealing with financial institutions and providing consumers with unbiased and authoritative information about financial products and services, including credit cards

• providing free and easy-to-use online tools and calculators to help Canadians make informed decisions, such as our Credit Card Comparison Tool and Credit Card Payment Calculator, and

• conducting research on financial well-being, and monitoring trends and emerging issues that affect financial consumers.

  • For example, since Aug 2020, we have been conducting a Monthly Financial Well-being Survey to study how Canadians manage their finances, allowing us to track changes in financial behaviours over time
  • From this work, we know that in 2019, 27% of Canadians had to borrow money to pay for their day-to-day expenses. This increased to 37% in May 2024
  • We make this information available on an online dashboard on Canada.ca

FCAC’s policy research and evidence-based analysis on financial consumer protection supports the Department of Finance’s role in developing financial sector policy and legislation.

Supervisory role

Regarding some of the questions on credit card regulations in the Committee’s study, FCAC oversees the compliance of federally regulated financial entities with regulations and codes of conduct for issuing and processing credit cards.

It is important to note that companies regulated by provinces and territories also offer credit cards and these are subject to requirements in those jurisdictions.

By law, federally regulated financial institutions, such as banks, must provide consumers with information in a manner, and using language that is clear, simple, and not misleading.

This applies to disclosure documents such as application forms and agreements for credit cards. These regulations also stipulate that certain information must be included in monthly credit card statements.

In 2022, the federal government introduced the Financial Consumer Protection Framework. This was a milestone for consumer protection in Canada.

The Financial Consumer Protection Framework holds banks to a higher standard and requires them to take greater responsibility for consumer outcomes.

The Framework introduced more than 60 new and enhanced consumer protection measures.

Under the Framework, banks must provide more information to their customers so they can make informed and timely decisions about their finances.

And, banks must assess consumers’ financial circumstances and offer products and services that are appropriate to their needs.

For credit cards, financial institutions must:

• send electronic alerts automatically when the credit available falls below $100, or an amount set by the consumer
• obtain consumers’ express consent for credit limit increases and
• assess whether a credit card is appropriate for the consumer's circumstances, including their financial needs. For example, many premium credit cards include a variety of benefits for a higher annual fee which may or may not be appropriate for specific consumers

The PCNO Code

The Committee should also be aware that a revised Code of Conduct for the Payment Card Industry was announced last week and will take effect on October 30th.

As part of its consumer protection mandate, FCAC will supervise the implementation of this Code by major payment card network operators, including VISA Canada, Mastercard Canada and Interac.

Financial Literacy Month

Finally, I would like to mention that November is Financial Literacy Month in Canada. FCAC leads this important initiative.

Throughout November, as part of a national campaign, we will be sharing information and resources with Canadians, and working with organizations from the private, public and non-profit sectors to advance financial literacy in Canada,

Mr. Chair, that concludes my opening remarks. I look forward to the Committee’s questions.