Decision #47830-516Q404

File: 47830-516Q404

Compliance issue

Disclosure of charges – Failure to display and make available, at each branch, copies of a statement of applicable charges
Disclosure of conditions – Failure to display and make available, at each branch, copies of a statement of conditions to open a personal deposit account and to cash a federal government cheque
Bank Act, s 448.1(1), 459.4
Access to Basic Banking Services (Banks) Regulations, s. 13, 14
Disclosure of Charges (Banks) Regulations s. 3

As a result of its annual examination, the Financial Consumer Agency of Canada (FCAC) identified that a bank had failed to display and make available a written statement outlining the conditions to be met to open an account, and to cash a federal government cheque.

FCAC also noted that the bank had failed to display and to make available, at each of its branches, copies of a statement of the applicable charges for deposit accounts.

Sections 13 and 14 of the Access to Basic Banking Services Regulations state that a member bank of the Canadian Deposit Insurance Corporation shall display and make available to the public at all of its branches, copies of a written statement disclosing the conditions to be met to open a retail deposit account as well as to cash a Government of Canada cheque and how the individual may contact the Agency if they have a complaint.

Section 3 of the Disclosure of Charges (Banks) Regulations states that a member bank shall disclose to the public all of the charges that apply to personal deposit accounts by means of a written statement, copies of which are to be displayed and made available to customers and to the public at all branches of the bank.

Decision taken

A Letter of Reprimand^{Footnote 1}  noting three violations against the bank. The bank also entered into a Compliance Agreement^{Footnote 2}  with FCAC.

Compliance considerations

While the Access to Basic Banking Services (Banks) Regulations came into force just before the annual examination, the Agency went through an extensive consultation process with the financial industry before enforcement of the Regulations began. FCAC communicated to all banks, three months in advance, that requirements under the Regulations were to come into force effective September 30, 2003 and that FCAC compliance monitoring would commence effectively on that date. Subsequently, banks were made aware of the scope of the monitoring to take place and had time to prepare for it.

Measures taken by financial institution

The bank entered into a Compliance Agreement with FCAC and agreed to:

• review all of the relevant consumer provisions, as defined in the FCAC Act, for all of its branches;
• file a report with FCAC, specifying how it has met each of the consumer provisions, and discuss any compliance deficiencies that had been identified, as well as the corrective measures taken;
• subject themselves to an on-site examination by FCAC to ensure that the bank had met its consumer obligations.

Outcomes

As a result of FCAC’s annual examination, the bank reviewed its internal procedures to make sure that it was meeting the standards set out in the Regulations. By ensuring that banks display and make available statements of charges, rights and regulations, FCAC enables consumers to receive clear, concise information about their accounts. Informed consumers are in a better position to choose the financial institution and product or service that best suits their needs and banking habits.