Consultation summary: Branch closure guidance – pre-closure consultation process

In August 2015, the Financial Consumer Agency of Canada (FCAC) called for public comment on its proposed Commissioner’s Branch Closure Guidance – pre-closure consultation process. The Agency received several comments from stakeholders. FCAC considered all of the comments and modified the Guidance, where appropriate.

The summary below recaps the submissions received from stakeholders and provides responses to those comments. 

Overview of stakeholder comments

The proposed Guidance appeared to be well received by stakeholders. There was a general consensus regarding the benefits of providing consumers with adequate and timely notice of branch closures and with an opportunity to discuss the changes resulting from such closures. 

Stakeholders expressed concern with some of the Commissioner’s proposed guidelines (defined in the summary of submissions) and requested clarity regarding timelines. 

The recommendations made by stakeholders resulted in several amendments to the Guidance. For example, the community consultation process is expected to begin only after the public announcement of a branch closure by a financial institution. Financial institutions will be expected to take reasonable measures (instead of significant) to address consumers’ concerns.

The final version of FCAC’s Branch Closure Guidance – pre-closure consultation process​​ is available online and financial institutions have been notified of its effective and coming-into-force dates. 

The Agency would like to thank the stakeholders who submitted comments during the course of this consultation. Stakeholder feedback is key to helping improve our ability to deliver on the Agency’s mandate. 

​Summary of submissions

Analysis

• Comment: FCAC should consider changing the expectation of the timing of the consultation so that the consultation process is after the financial institution’s public (formal) notice. Some stakeholders expressed concern over holding a meeting or consulting prior to an official notice being given. Closures can have a significant impact on staff.  Financial institutions must be sensitive not only to the needs of affected consumers and community members but must also be sensitive to employees who may be impacted.​
  • ​​Response: The wording was amended to reflect the stakeholder’s concern.​

​​Guidelines

• Comment: For clarity purposes, FCAC should consider rewording some of the titles in the Guidelines section.​
  • ​​Reponse: The recommendation was taken into consideration and changes were made to reflect the stakeholder’s comments. ​
• Comment: Purpose of a Community Consultation section: a stakeholder believes the word “community” is too broad and recommends that FCAC consider changing its reference to: “community members, represented primarily by the bank’s clients…” The stakeholder is of the view that by amending the wording, the focus is on the client’s best interest.​
  • ​​Response: The wording was amended to reflect the stakeholder’s concern.​
• Comment: Purpose of a Community Consultation section: a stakeholder recommends adding a bullet: “ensure effective communication to impacted clients of the branch”​
  • ​​Response: The wording was amended to reflect the stakeholder’s concern.​
• Comment: Consulting the Community and the Financial Institution’s Clients title: a stakeholder recommends rewording the title: The Benefits of Consulting the Community Members, Represented Primarily by the Bank’s Clients.​
  • ​​Response: The wording was amended to reflect the stakeholder’s recommendation.​
• Comment: Consulting the Community and the Financial Institution’s Clients section: for confidentiality reasons, a stakeholder recommends that it shares “key factors” which influenced the decision to close the branch instead of providing an “analysis” as recommended by the Guidance.​
  • ​​Response: The wording was amended to reflect the stakeholder’s recommendation.​
• Comment: For a consultation process to be effective, it should be section: for consistency purposes, a stakeholder recommends adding in-branch sessions as an example of a familiar meeting location. The stakeholder commented that the in-branch session was stated as an example of an acceptable consultation measure and therefore recommended that both sections be aligned for consistency purposes.​
  • ​​Response: The wording was amended to reflect the stakeholder’s recommendation.​​

​​Guidance

• Comment: The current wording expects financial institutions to take “significant measures” to address the concerns of the consumers. FCAC should consider changing the wording in the Guidance to better reflect the regulatory requirements (required consultation and disclosure of information – not taking other significant measures to address concerns).The stakeholder supports the Guidance’s consultation process but recommends changing the wording to “reasonable” instead of “significant.”​
  • ​​Response: The wording was amended to reflect the stakeholder’s recommendation.​​​

​​Next steps

• Comment: Implementation timeline: Stakeholders commented that the coming-into-force date may be too difficult to meet given that some financial institutions may already be in the process of closing branches and would not be able to comply in time. Therefore, stakeholders recommend a coming-into-force deadline that would match the longest possible branch closure notice (6 months).​
  • ​​Response: Stakeholders’ recommended timeline has been taken into consideration. However, the Guidance’s coming-into-force date remains 90 days from the date of its publication. Stakeholders have been notified of the publication and its effective date. ​
• Comment: Effective date: Stakeholders wished to obtain clarification of the effective date of the proposed Guidance.​
  • ​​Response: The Proposed Guidance had an effective date of July 2, 2015. That date was for consultation purposes only. The effective date has been changed to reflect the publication date.​