Decision # 133

From: Financial Consumer Agency of Canada

Commissioner’s Reasons for Decision

On August 24, 2018, the Commissioner of the Financial Consumer Agency of Canada (FCAC) decided to make public the following information in accordance with section 31 of the Financial Consumer Agency of Canada Act (Act).

Bank of Montreal (BMO) has committed three violations when entering into an agreement for BMO's home equity line of credit products, by failing:

  1. to disclose certain information to borrowers required to be disclosed in an information box under subsection 6(2.1) of the Cost of Borrowing (Banks) Regulations (COBRs) ; and
  2. to meet the prescribed format requirements of subsection 6(2.4) of the COBRs for information boxes to be presented with text in an easily readable font style and a font size of at least 12 points with bold font for titles and numbers, and 10 points for any other text.

The bank has been non-compliant since January 1, 2010. The number of customers that have been impacted for the period of January 2010 to December 2016 is estimated at 136,075. The violations have not resulted in financial harm to impacted customers. The amount of the penalty paid is $200,000.

Section 31 of the Act provides as follows:

31 The Commissioner may make public the nature of a violation, the name of the person who committed it, and the amount of the penalty imposed.

The discretion in s.31 of the Act is available to buttress the FCAC in the delivery of its compliance and enforcement mandate so that public confidence can be maintained in the effectiveness of the violation proceedings and FCAC as a regulator. It can apply to incentivize banks to maintain high standards of compliance by establishing, maintaining and promoting a system and an overall culture of compliance that allows for early detection and quick remediation of breaches of consumer provisions.

Ottawa, August 24, 2018

Lucie M.A. Tedesco


Financial Consumer Agency of Canada

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