Decision #29157-387Q307

From: Financial Consumer Agency of Canada

File: 29157-387Q307

Compliance issue 

Branch closure – Request to vary the time and manner in which a notice of a branch closure must be given

Bank Act, s. 459.2(1)
Notice of Branch Closure (Banks) Regulations, subparagraph 4(1)(a)(i), paragraphs 8(1)(b), 8(2)(b), subsections 5(1), 5(2) 

A bank advised the Financial Consumer Agency of Canada (FCAC) that it would have to close one of its branches unexpectedly, since the landlord had informed the bank that its right to use the premises would terminate in three months. After receiving this news, the bank provided full notification to all of its customers, as well as to FCAC’s Commissioner. However, this occurred after the timeframe for notifying them, prescribed in the Regulations, had already passed. 

Subsection 459.2(1) of the Bank Act and the associated Notice of Branch Closure (Banks) Regulations require banks to provide a notice to their customers of any proposed branch closure, as well as to notify the FCAC Commissioner about the closure. Sections 4 and 5 of the Regulations outline, in detail, the timeframe for providing such notices to them (a minimum of four months before the proposed closure date if the branch is in an urban area), and the key information to include in both notices. 

Paragraph 8(1)(b) of the Notice of Branch Closure (Banks) Regulations also states that, in prescribed circumstances, which are listed under subsection 8(2) of the Regulations, the Commissioner may, at the request of a member bank, vary the manner and time in which the branch closure notice must be given, under the Regulations. 

As set out in paragraph 8(2)(b) of the Regulations, one of the circumstances under which subsection 8(1) applies is if the closure occurred because a person other than the member bank, or other than an affiliate of the member bank, terminated the member bank’s right to use the premises as a retail deposit-taking branch and did not give the member bank enough notice of the termination to allow it to comply with the notice requirements of the Regulations. 

Decision taken

The Commissioner granted the request to vary the manner and time in which a notice of branch closure must be given.

Compliance considerations 

Since the bank was only advised that it could no longer use the premises three months before the closure date, it was impossible for the institution to comply with the Regulations. 

The bank provided a notice to its customers less than a month after it was informed that it could no longer use the premises. 

Measures taken by financial institution

The bank sent a letter to all of the branch’s customers, informing them that the branch would close. This letter included phone numbers to call in case customers had any questions or concerns about the closure, as well as information on how they could request a branch closure meeting. The bank also posted a notice to customers in a public area of the branch. A full-service ABM was to remain on the site where the closing branch was located.

Outcome 

When the Commissioner is informed of all branch closures in a timely manner, FCAC is able to monitor the closures proactively, so that consumers receive adequate notice, as well as all the information about the closure the banks are required to give them. This, in turn, enables consumers to make informed choices and to find alternatives to their current banking services. 

By making certain that consumers are aware of their rights, FCAC and financial institutions can ensure that consumers have the opportunity to communicate openly with their bank, to explore ways of easing any negative impact a closure may have on them, or on the community as a whole. 

In this case, circumstances beyond the financial institution’s control made it impossible for the bank to comply with the Regulations within the prescribed timeframe. However, the bank took several proactive measures to inform its customers of the situation and to lessen the harm caused by the sudden branch closure. 

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