Commissioner's Reasons for Decision
(Bank Act, subsection 459.2(2) and Notice of Branch Closure (Banks) Regulations, section 9)
In August 2012, I required the bank, pursuant to subsection 459.2(2) of the Bank Act ("Act") and in accordance with section 9 of the Notice of Branch Closure (Banks) Regulations ("Regulations"), to convene and hold a meeting between representatives of the bank, representatives of the Agency and interested parties in the vicinity of the branch in order to exchange views about the closing of the branch.
Subsection 459.2(2) of the Act states:
After notice is given but before the branch is closed or ceases to carry on the activities, the Commissioner shall, in prescribed situations, require the bank to convene and hold a meeting between representatives of the bank, representatives of the Agency and interested parties in the vicinity of the branch in order to exchange views about the closing or cessation of activities, including, but not limited to, alternative service delivery by the bank and measures to help the branch's customers adjust to the closing or cessation of activities.
The relevant sections of the Regulations state:
4. (1) The notice must be given to the Commissioner in writing no later than
(a) four months before the date proposed for the closure of the branch or the cessation of the activity, if the branch is in
(i) an urban area
9. For the purpose of subsection 459.2(2) of the Act, the following circumstances are prescribed as circumstances in which the Commissioner shall require a member bank to convene and hold a meeting referred to in that subsection:
(a) the member bank has not consulted the community in the area affected by the closure of the branch or the cessation of the activity well enough to ascertain the views of interested persons in the community with regard to the closure of the branch, the cessation of the activity, alternate service delivery by the bank or measures to help the branch's customers adjust to closing or cessation;
(b) an individual or a community representative from the area affected by the closure of the branch or the cessation of the activity submits to the Commissioner a written request for the meeting; and
(c) the request is not frivolous or vexatious.
The bank has decided to close its branch located in an urban centre effective October 2012. The nearest branch (the "receiving branch") is located approximately 2 km from the closing location.
The Financial Consumer Agency of Canada (FCAC) received four written requests from members of the community requesting that the Commissioner require the bank to hold a public meeting to discuss the proposed branch closure. The main concerns raised by the complainants were:
- Inadequate consultation with the community about the branch closure;
- Long established community service for a large number of seniors; and
- Traffic and limited parking at the receiving location.
One such request included a petition from customers and members of the community who did not believe the branch closure would have a positive impact on customers or the community.
There is no evidence to suggest that these requests are frivolous or vexatious.
Position of the bank
In a letter to the FCAC dated July 2012, the bank stated that the decision to close the branch was based on:
"an interim review of declining traffic patterns, age of the branch and requirements for future investment in the property. No additional consultation was undertaken with the community as in our view this move would have a positive impact on existing customers."
The bank stated that it has taken the following measures in order to help consumers adjust to the branch closure:
- Consumers are not required to transfer accounts or take any action with regards to the transfer of products or services held at the closing branch;
- Account numbers will remain the same and consumers will have full servicing capabilities at any of the bank's branches;
- Customers may continue to use existing cheques supplies. However, if a request is made to order new cheques to reflect the correct branch address, the bank will cover the costs; and
- Safety deposit boxes will be securely moved to the new branch location unopened.
The bank believes the branch closure and relocation will have a positive impact on existing customers. Therefore, they have not undertaken any consultation with the community to ascertain the views of interested persons in the community with regard to the branch closure.
In order for me to require the bank to convene and hold a meeting, the three criteria set out Section 9 of the Regulations (above) must be met.
With respect to the first criteria, the bank has informed FCAC that they have not taken steps to consult with the community to ascertain the views of interested persons in the community with respect to the issues set out in subsection 9(a) of the Regulations.
In regard to the second criteria, an individual or community representative affected by the closure submitted a written request to the Commissioner to convene and hold a meeting.
Lastly, the meeting request was not frivolous or vexatious.
Therefore, it is my view that the bank did not consult the community affected by the closure well enough to ascertain the views of interested persons with regard to the closure.
Accordingly, I have required the bank to convene and hold a meeting in the community for the proposed branch closure.
The request to call a public meeting, pursuant to subsection 459.2(2) of the Bank Act, has been granted.
Ottawa, August 24, 2012
Financial Consumer Agency of Canada
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