Decision #58529-630Q403

From: Financial Consumer Agency of Canada

File: 58529-630Q403

Commissioner’s Decision 

Compliance issue

Branch Closure — Request to vary the time and manner in which notice is required to be given when the closure of a branch is in response to a risk to the safety of the personnel of the branch or public
Bank Act, s 459.2(1)
Notice of Branch Closure (Banks) Regulations, ss. 4(1)(b), 6(2), 8(1)(b), 8(2)(a)

A bank branch was destroyed due to an electrical fire. Given the significant costs of demolishing the existing structure and rebuilding, the low volume of business and the location of the receiving branch, the bank decided to close the location permanently. Due to circumstances, the branch was unable to provide six months’ advance notice to the customers, the public, the mayor and the Commissioner, as required by the Regulations. The bank requested that the Commissioner vary the time by which the notice is required to be given in accordance with sections 4(1)(b) and 6(2) of the Regulations.

Section 8(1)(b) of the Regulations states that the Commissioner may, at the request of a member bank, vary the manner and time in which notice is otherwise required to be given. Section 8(2)(a) of the same regulations specifies that this request to vary may be granted in circumstances where the closure or cessation is in response to a risk to the safety of the personnel of the branch or to the public.

Compliance measure(s) taken

The request to vary the time in which notice is to be given was granted. 

Compliance considerations

The circumstances surrounding the sudden temporary closure, which ultimately led to the decision to close the branch permanently, were beyond the bank’s control. Furthermore, prior to the fire, services and hours at the closing branch had been restricted. Customers requiring more complex transactions than basic teller services or the opening of accounts were already being referred to the receiving branch on a regular basis. Information provided by the bank also suggests that customers already frequented the area of the receiving branch for shopping and educational needs. As a result, it did not appear the closure would have a significant impact on consumers. 

Measures taken by financial institution

Upon approval of the request to vary, the bank committed to:

  • providing all customers with a personalized closure notice to be sent no later than three weeks after approval of the request to vary by FCAC. Contents of the notice would comply with the requirements of the Regulations.
  • placing an advertisement in the local paper to advise customers and the public of the closure. Contents of the notice would comply with the Regulations. 

Outcomes

In this case, after evaluating the potential impact on consumers, the Commissioner used his discretion to grant the request to vary with the understanding the bank would still provide notice to its customers and the public. By making sure that consumers receive this information, FCAC and the bank are ensuring that consumers are aware of their rights and of the opportunity to communicate openly with their bank to explore ways of easing any negative impact the closure may have on their lives and on the community as a whole. 

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