Decision #54139-659Q404

File: 54139-659Q404

Compliance issue

Failure to cash a federal government cheque and subsequent failure to provide written notice of refusal
Bank Act, s 458.1(1)
Access to Basic Banking Services Regulations, s. 8, 10

A bank refused to cash a federal government cheque for a non-customer who presented valid identification^{Footnote 1}  and met the prescribed conditions set out by the Regulations. The bank subsequently failed to provide a written notice of refusal to the client.

Subsection 458.1(1) of the Bank Act requires banks which are members of the Canada Deposit Insurance Corporation and which open retail deposit accounts through a natural person to cash a federal government cheque for non-customers who meet the requirements set out in section 8 of the Regulations.

Section 8 of the Regulations stipulates that an individual requesting a bank to cash a federal government cheque shall present to the member bank two pieces of valid identification or one piece of valid identification containing the signature and photograph of the individual.

Section 10 of the Regulations requires that banks refusing to cash a federal government cheque provide consumers with a written notice of refusal containing a statement indicating how individuals may contact FCAC if they have a complaint.

Decision taken

A Letter of Reprimand^{Footnote 2}  noting one violation against the bank.

Compliance considerations

The refusal was the result of the actions of a branch manager who did not follow the bank’s standard procedures. As such, the case was considered as an isolated event, and not a systemic problem.

Measures taken by financial institution

As a result of FCAC’s intervention, the bank:

• discussed the appropriate measures that should have been taken with the employee responsible for the violation
• made enhancements to the training course for new employees, to place a greater emphasis on the Access to Basic Banking Service Regulations
• distributed a message to all branch managers and employees reinforcing the requirements of the Regulations

Outcomes

As of September 30, 2003 all banks in Canada are required by the Access to Basic Banking Regulations to cash a Government of Canada cheque (up to $1,500) for non-customers who present valid identification. Prior to the Regulations, there was an agreement in place between many banks and the federal government to cash federal government cheques (of $1,500 or less) for consumers who presented valid identification. FCAC monitored this earlier public commitment, and will continue to ensure compliance with the new regulations.

Individuals have a right to cash their federal government cheques at any member bank, regardless of their relationship with the bank. Ensuring that non-customers are able to cash federal government cheques is an important part of the access to basic banking services.