CG-3 Clear language and presentation principles and guidelines for the industry


The new Financial Consumer Protection Framework (FCPF) in the Bank Act and the Financial Consumer Protection Framework Regulations (collectively: “FCPF Requirements”) come into force on June 30, 2022. The FCPF Requirements apply to banks, authorized foreign banks and federal credit unions. This guideline will be reviewed, including for purposes of reflecting the FCPF Requirements, and will be reissued in due course as is appropriate. Starting June 30, 2022, this guideline is to be read by banks, authorized foreign banks and federal credit unions in conjunction with, and subject to, the FCPF Requirements.  If there is any inconsistency between the FCPF Requirements and this guideline relating to banks, authorized foreign banks and federal credit unions and their conduct post June 30, 2022, the FCPF Requirements prevail.

Clear language project: background and objective

Although the Financial Consumer Agency of Canada (FCAC) provided plain language information to consumers in the past, we recently established more formal clear language and presentation principles that can be used in our consumer education and financial literacy initiatives. FCAC is currently reviewing and adapting its consumer material to better serve the needs of Canadians in understanding their personal finances and the banking system in general by using these principles as guidelines.

These principles and guidelines are based on research of current and past initiatives in the area of plain language at the provincial, federal and international levels.

Following the announcement of the proposed amendments to the plain language provision of the Cost of Borrowing Regulations, the Commissioner requested that the Supervision and Promotion Branch of FCAC provides guidelines to the industry in using these principles. The guidelines will ensure that there is no confusion about the intent and scope of the Clear Language policy.

The following guideline is based on the Supervision and Promotion Branch’s perspective on how a federally regulated financial institution (FRFI) might ensure clear language and presentation in its communications with their consumers. Can they provide FCAC with policies and procedures that describe their efforts in making product applications, forms and agreements easier to understand and use?

FCAC’s Supervision and Promotion Branch established the following guidelines to assist the industry in developing communications for consumers. Guidelines are not rules; they require judgment and they suggest rather than prescribe.

Clear language and presentation

What is it?

Clear and simple writing starts by focusing on the needs of the reader and presents information in a logical order using familiar, everyday words and expressions. It avoids jargon and uses a minimum of technical language in a manner that is not misleading, but that an audience can understand quickly and easily.

Why clear?

The benefits
Consumers FRFIs
will understand the message easily will save time and money
will make sound and informed financial decisions will improve communication between employees and customers
will be satisfied will reduce employee errors
will save time will be able to train employees in clear communications correctly and quickly

Old vs. new

The proposed amendments to the Regulations were published May 23, 2009 in the Canada Gazette.

The current wording states:

“6(4) A disclosure statement, or a consent in relation to a disclosure statement, must be in plain language that is clear and concise. It must be presented in a manner that is logical and likely to bring to the borrower’s attention the information required by these Regulations to be disclosed.”

The proposed wording states:

“6(4) Any disclosure that is required to be made by a bank under these regulations must be made in language, and presented in a manner, that is clear, simple and not misleading.”

FCAC expectations

A FRFI must effectively demonstrate that it has applied the five principles of clear language outlined below.

Its policies and procedures must incorporate the operational guidelines in order to measure and ensure that the principles are met and respected.

FCAC principles

The proposed amendments to the Regulations were published May 23, 2009 in the Canada Gazette.

FCAC Clear language and presentation principles and guidelines
Principle Guidance Operational guidelines

Know your audience

In all communications directed at consumers, the FRFI needs to:

  • be able to explain why the reader needs the information in the document.
  • ensure the document is easy to understand, inviting and useful.
  • find the right balance between its marketing, compliance and legal objectives and requirements in order to describe its products accurately but also in a clearly understandable way.
  • Determine the needs of the reader the document is written for.
  • Think from your reader’s point of view.
  • Put yourself in that reader’s shoes: what questions would he or she ask?
  • Keep in mind that reader’s average level of knowledge about the document’s subject.
  • Do not underestimate the reader’s intelligence, but do not assume the reader understands the subject of the document.
  • Consider the reader’s familiarity with procedures and terms.

Make your material understandable by planning your text

Let consumers know what they’re looking at and provide them the information they need.

Avoid ambiguities: be direct, concise and to the point. Use a logical pattern and make the links between your ideas obvious.

Remove any information that is not essential to your purpose. Will the consumers understand the document the first time they read it?

  • Replace technical terms with equivalent everyday words wherever possible.
  • Use concrete rather than abstract words as much as possible.
  • Be precise when describing ideas and products.
  • Be consistent by using the same terminology.
  • Minimize your use of acronyms; define them the first time you use them, and be consistent.
  • Use examples and tables to present comparisons or to explain a calculation.
  • Keep most sentences short.
  • Use the active voice (“The customer invests in certificates,” not “Certificates are invested in by customers.”)

Write clearly

Organize your ideas and structure your writing.

  • Weigh the importance of every idea. Which is the most important? What content is necessary?
  • Put the main message—the most important idea—first.
  • Group related ideas together.
  • Present the information in a logical order.
  • Use lots of headings and subheadings. Descriptive headers will help your reader scan and absorb the information more easily and quickly
  • Use short and simple sentences and paragraphs. Avoid the “wall of words.”
  • Use footnotes for explanatory information or examples.
  • In larger documents, include a table of contents for easier reference.

Use the visual presentation to enhance your text

Create a reader-friendly format. The way the information is presented on the page is almost as important as the words used to describe it.

Your document needs to be visually inviting.

  • Use a readable and appropriate typeface and font size. The most common are Times New Roman or Arial at 10 to 12 point size.
  • Use layout and spacing that separate sections.
  • Leave plenty of white space between lines of text and paragraphs.
  • Avoid a dense, block-like appearance.
  • Leave the right margin ragged.
  • Make key information easier to find.
  • Use a text box or other graphical treatment to emphasize a particularly important idea.
  • Highlight important information in boxes or bulleted lists.
  • Use bold type and/or underlining to emphasize important information—for example: 19.9%

Test your material

A FRFI needs to test its documents in order to determine whether they are user-friendly.

It is especially important to test application forms and agreements that will be used by the average reader.

If the average consumer can read the entire document without feeling confused and without having to go back and read it again, you’ve passed the test.

  • Test your documents on a variety of readers.
  • Monitor how customers complete application forms and identify areas that cause confusion or misunderstanding.
  • Seek feedback through focus groups and surveys.
  • Add a statement to each document inviting readers to comment on its clarity and to suggest how to make it easier to understand.
  • Use a checklist to ensure that clear language and presentation principles were followed.
  • Ask yourself:
    • does the document speak clearly to the intended reader?
    • is the information organized and presented in a logical sequence?
    • is the most important information summarized in a box at the beginning of the document?
    • is the document written in the active voice?
    • Is the document organized in short sections?
    • are there more short sentences than long sentences?
    • does the document contain useful headings, sub-headings, tables and bulleted lists?
    • does it use short, familiar words instead of jargon?
    • is the text arranged neatly on the page with readable typefaces, appropriate use of boldface and italics and good use of white space?

Other considerations

Writing in clear and simple language does not mean deleting complex information to make the document easier to understand.

Do not oversimplify. If details are important, write them clearly. Readers must have a clear understanding of your product, and they don’t want surprises.

Get help with clear language and presentation by seeking services from an expert or consultant who combines skills in writing and information design.

Offer clear language and presentation training to your employees.

These guidelines are not standards, but they will help in evaluating the degree to which you have applied the principles of clear language.

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