FCAC examination of compliance with 2010 amendments to regulations
In 2010, the Financial Consumer Agency of Canada (FCAC) undertook a major initiative with financial institutions to assess their overall compliance with the new requirements set out in the Regulations to Amend the Cost of Borrowing Regulations and the newly introduced Credit Business Practices Regulations, which came into force on January 1, 2010.
This examination process stems from FCAC’s new approach to compliance supervision under the revised Compliance Framework, and highlights our transition to a supervisory approach that is more proactive, effective and responsive to Canada’s federal financial services marketplace.
Following the January 1, 2010 coming-into-force date, FCAC’s Compliance and Enforcement Branch (CEB) sent a questionnaire to all federally regulated financial institutions (FRFIs) affected by the new provisions, asking them to report the extent to which they complied with the new regulatory requirements. The questionnaire asked FRFIs to proactively identify whether they had successfully implemented all the new regulatory requirements, or if there were any outstanding compliance issues. FCAC required FRFIs that self-identified outstanding compliance issues to provide qualitative information (an action plan and timelines) on their compliance.
- Given the importance of the new requirements for FRFIs to provide consumers with information boxes, as a follow-up to the examination questionnaire, FCAC also reviewed those FRFIs that reported full compliance with the relevant requirements. CEB asked these FRFIs for copies of their information boxes.
- It is FCAC’s view that this examination process has enabled the Agency to proactively address systemic procedural and material compliance deficiencies and thus help minimize potential negative impacts on consumers.
Our examination of FRFIs’ compliance with the provisions of the Credit Business Practices Regulations and the Regulations to Amend the Cost of Borrowing Regulations has given rise to a variety of compliance actions, including several Commissioner’s Decisions. Because these Decisions all stem from the same initiative, for the purposes of Web publication, these Decisions have been summarized and posted in the Commissioner’s Decisions section of our website.