Request for exemption
Branch closure — Request to vary the time and manner in which a notice is required when a branch closes or ceases operations in response to a risk to the safety of the branch’s staff or the public, and because the travelling distance from the new to the former location is not great enough to substantially affect the bank’s customers
Bank Act, subsection 459.2(1)
Notice of Branch Closure (Banks) Regulations, subparagraph 4(1)a)(i), paragraph 2c), subsections 4(2), 5(1), 5(2), paragraphs 8(1)b), 8(2)a) and c)
A bank did not provide due notice to its clients or to the Commissioner of the Financial Consumer Agency of Canada (FCAC) regarding the closure of one of its branches.
In accordance with subparagraph 4(1)a)(i) of the Notice of Branch Closure (Banks) Regulations, a bank must notify the Commissioner, in writing, no later than four months before the proposed date of the branch closure.
Before it closed the branch, the bank sent the FCAC Commissioner a request to vary the time and manner in which a notice is required for a branch closure. However, this occurred after the four-month timeframe, prescribed in the Regulations, had already passed.
The bank submitted a request for exemption, saying that the branch closure was due to circumstances beyond the branch's control; namely, major construction work by the owner of the building where the branch was located. According to the bank, this construction work presented a significant risk to the safety of the branch’s staff and the public.
The bank’s request was also based on the fact that consumers would not be substantially affected by the closure, because the two receiving branches were located less than two kilometres from the branch that was closing.
Paragraph 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 a notice is required to be given. As set out in paragraphs 8(2)a) et c), two of the circumstances under which subsection (1) applies are when the closure or cessation of business occurs in response to a risk to the safety of the branch’s staff or the public, or when the closure or cessation results from a branch being relocated, and the travelling distance from the new to the former location is more than 500 metres but not great enough to substantially affect the customers served by the branch.
In keeping with paragraph 8(1)b) of the Regulations, the Acting Commissioner agreed to the bank’s request to vary the manner and time in which the notice of branch closure is otherwise required to be given, and agreed that the closure was clearly required because of a risk to the safety of the branch’s staff and the public, as per paragraph 8(2)a) of the Regulations.
The owner of the building where the branch that was closing was located was undertaking major construction work, which may have presented a risk to the safety of the branch’s employees and clients. Also, the distance between the branch that was closing and the receiving branches was estimated to be between 600 metres and one kilometre, rather than the 500 metres set out in the Regulations. Furthermore, not only were the receiving branches within walking distance; they were also situated in an area that was well served by public transit.
The bank filed the request for exemption with FCAC before it closed the branch. At the time of filing, it had already given full notice of the closure both to the branch’s clients and to the Acting Commissioner of the Agency. However, the bank filed this request after the four-month timeframe set out in the Regulations.
The bank sent a letter to all of the branch’s clients, informing them of the closure and providing them with information about the receiving branches. The letter contained information on how they could request a public meeting with bank representatives, the community and FCAC, to discuss the branch closure.
The bank also posted a notice in the branch, informing customers about the branch closure.
When a bank decides to close a branch, it must inform consumers within the timeframe specified in the Regulations. It is important to give consumers the opportunity to find solutions, to reduce any negative impact that the closure might have on their being able to do banking.
In the present case, even though the bank had notified its clients after the prescribed four-month timeframe, it did attempt to give full notice of the closure to its clients and to the FCAC Commissioner as quickly as possible — well before the planned closure date and before submitting its request for exemption. The bank was also proactive in informing its clients about the branch closure, by sending each of them a personal letter and by posting information about the closure in the branch.
In addition, the bank clearly demonstrated that it had closed the branch to protect its clients and employees, without this having a significant impact on its customers, because of the proximity of the two receiving branches.
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