Access to basic banking services: opening a retail deposit account

Effective Date:  February 22, 2023

 I. Issue

The purpose of this bulletin is to clarify the proper application of the obligation to open a retail deposit account under s. 627.17(1) of the Bank Act, when Banks (including federal credit unions) and Authorized Foreign Banks (Banks) are presented with identification documentation (ID) that is different from standard ID^{Footnote 1}  (non-standard ID).

FCAC is aware that some Banks have made a narrow interpretation of this provision. This bulletin clarifies FCAC’s expectations regarding the proper applications of this obligation.

FCAC expects Banks to actively support consumers^{Footnote 2}  gain access to banking services by exercising the flexibility that s. 627.17 of the Bank Act affords to consumers who do not present standard ID when seeking such access.

II. Context

The Bank Act provides that Banks have an obligation to open retail deposit accounts for consumers who present certain ID documents. Banks have the authority to verify the documents presented to ensure the requirements under s. 627.17(1) of the Bank Act are met.

More specifically, a Bank must open a retail deposit account when a consumer presents:

1. any 2 documents from a reliable source, 1 of which indicates the person’s name and address and the other which indicates the person’s name and date of birth, or
2. 1 document from a reliable source that indicates their name and date of birth, if the consumer’s identity is also confirmed by a customer in good standing with the Bank or by an individual who is of good standing in the community where the point of service or branch of the Bank is located.

This bulletin is informed by FCAC’s collaboration with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the federal regulator responsible for overseeing the identity verification obligations of financial institutions under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR). The PCMLTFR requires Banks to verify that the ID a consumer presents to open a retail deposit account meets certain requirements. As a result, a Bank can only open a retail deposit account after it verifies the consumer’s ID in accordance with the requirements in the PCMLTFR.^{Footnote 3}  These requirements are also met when a consumer presents non-standard ID in compliance with s. 627.17(1) of the Bank Act.

The obligation to consider non-standard ID can help consumers facing barriers when seeking access to banking services. These situations are more likely to affect consumers facing vulnerable circumstances, such as victims of domestic abuse and victims of human trafficking, or those from communities with a higher likelihood of vulnerability, such as Indigenous communities and new immigrants.

III. Policies and procedures

FCAC expects Banks to establish and implement policies and procedures to effectively accommodate requests to open a retail deposit account when non-standard ID is presented. These policies and procedures are expected to address how the Bank will operationalize the terms: “document(s) from a reliable source,” “customer in good standing with the Bank,” and “natural person of good standing in the community,” and apply them in a manner that actively supports consumers in exercising their right to access banking services. Effective policies and procedures would be informed by an assessment of related risks, and account for the use of controls and measures to mitigate those risks.

Document(s) from a reliable source where non-standard ID is presented

A Bank’s policies and procedures must set out the criteria and process for establishing whether a source is reliable for the documents presented under s. 627.17(1) of the Bank Act. 

For a document to be from a reliable source, the Bank should be able to verify its contents with the source that issued the document. A Bank may require additional information to assist in this verification such as the following:

• the identity of a representative of the reliable source, including the representative’s position and contact details
• whether, or how the representative of the reliable source might know the consumer

Customer in good standing with the bank OR a natural person of good standing in the community

A Bank’s policies and procedures must set out the criteria and processes for how the Bank establishes whether a customer is in good standing with the Bank, be they a natural person or entity, and how a natural person is of good standing in the community, per s. 627.17(1)(a)(ii) of the Bank Act.

For a Bank to consider a customer to be in good standing, or a natural person to be of good standing, the Bank should be able to verify their identity and credentials.

IV. Conclusion

The obligation to consider non-standard ID can help consumers facing barriers that make it difficult for them to present standard ID. FCAC expects Banks to actively support those consumers gain access to banking services.

V. Legislative references

627.17 (1) Subject to subsection (2), a member bank shall, at any point of service or any branch in Canada at which it opens retail deposit accounts through natural persons, open a retail deposit account on the request, made there in person, of a natural person who

1. (a) presents to the member bank
   1. (i) two documents from a reliable source — one of which indicates the person’s name and address and the other the person’s name and date of birth — including
      1. (A) identification issued by the Government of Canada or the government of a province,
      2. (B) recent notices of tax assessments issued by the Government of Canada or the government of a province or municipality,
      3. (C) recent statements of benefits from the Government of Canada or the government of a province,
      4. (D) recent Canadian public utility bills,
      5. (E) recent bank account or credit card statements,
      6. (F) foreign passports, and
      7. (G) any prescribed document, or
   2. (ii) any document from a reliable source that indicates the person’s name and date of birth, if the person’s identity is also confirmed by a customer in good standing with the member bank or by a natural person of good standing in the community where the point of service or branch is located.

VI. Concordance

There are no equivalent provisions in the Trust and Loan Companies Act or the Insurance Companies Act.

VII. Miscellaneous

Questions relating to this bulletin should be sent

1. by email addressed to compliance@fcac-acfc.gc.ca or
2. by mail addressed to:
   Financial Consumer Agency of Canada
   Attention: Deputy Commissioner, Supervision and Enforcement Branch
   427 Laurier Ave West, 6th Floor
   Ottawa, ON  K1R 5C7