Consultation on FCAC's proposed bulletin on indirect auto loans

From: Financial Consumer Agency of Canada


This consultation is closed. A summary of submissions will be posted following the release of the final version of the bulletin.

Invitation for comments

The Financial Consumer Agency of Canada (FCAC) invites all interested parties to submit their comments by email to

FCAC will also accept written comments by mail or fax at:

Financial Consumer Agency of Canada
Supervision and Promotion Branch
427 Laurier Avenue West, 6th floor
Ottawa, ON K1R 1B9

Fax: 1-866-814-2224 / 613-941-1436

All submissions must be received by September 5, 2017.

FCAC may wish to quote from or summarize your submission in its public documents and post all or part of it on Submissions may be revised to remove sensitive or identifying information. Please indicate clearly if you would prefer that FCAC withhold all or part of your comments from its public documents.

All comments received by FCAC will be subject to the Access to Information Act and the Privacy Act and may be disclosed in accordance with the law. 


FCAC undertook research on auto financing, which resulted in the release of a report entitled Auto Finance: Market Trends (PDF, 692 KB). Further to this research, FCAC is proposing the following bulletin.

Proposed bulletin

This proposed bulletin sets out FCAC’s expectations regarding compliance with federal consumer provisions for banks and bank affiliates engaged in selling, or furthering the sale of, indirect auto loans.

Section 459.5 of the Bank Act requires banks to comply with consumer provisions to sell, or further the sale of, products or services through an agent, representative, or other intermediary. This measure ensures that federal consumer provisions are applied consistently to the products and services of banks and bank affiliates, regardless of the channel through which the product or service reaches the consumer.

Presently, banks and bank affiliates are providing indirect auto loans through automotive dealers, where the automotive dealers act as intermediaries between consumers and the auto loan products of banks and bank affiliates. The consumer protection framework offers consumers the same level of protection irrespective of whether the auto loan is obtained in an automotive dealer or bank branch. In addition, indirect auto loans are subject to the same federal regulatory requirements whether they are offered by banks or bank affiliates. 

FCAC expects banks and bank affiliates to review their agreements with auto dealers to ensure compliance with the applicable consumer provisions under the Bank Act and applicable regulations, and to test the policies and procedures in place to respond to incidences of non-compliance. Specifically, FCAC expects banks and bank affiliates to:

  1. review disclosures to ensure compliance with the requirements of the Cost of Borrowing Regulations (COBR) and the Commissioner’s Guidance CG-3: Clear language and presentation principles and guidelines for the industry; and therefore ensure that:
    1. information box is present (COBR - Section 6)
    2. calculation of annual percentage rate includes administrative charges for services, transactions or any other activity in relation to the loan (Subsection 5(1) COBR)
  2. apply enhanced rigour in the processes and controls (e.g., proactive monitoring, training, and scripting) related to obtaining express consent for auto loan products (Subsection 3(4) Negative Option Billing Regulations)
  3. ensure consumers are provided with the bank’s complaint handling procedures and have access to external complaints bodies (Complaints Regulations)

Questions to consider

FCAC is asking for your comments on the implementation of the proposed bulletin, specifically:

  • any impact on your organization related to:
    • time required for implementation
    • required system changes
    • cost of implementation
  • any impact on financial consumers

Next steps

FCAC will consider all submissions received and modify the proposed bulletin, where appropriate. FCAC will post an anonymized summary of the submissions following the release of the final version of the bulletin. 

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