Ottawa, September 30, 2009
2009-089
Building on the Government's earlier pledge and following public consultations, the Honourable Jim Flaherty, Minister of Finance, today announced that new credit card regulations have been approved and will be published in Part II of the Canada Gazette on September 30, 2009. The majority of the regulations will come into force on January 1, 2010. A few provisions, such as the 21-day grace period, will take effect on September 1, 2010.
"Our Government understands the pressures Canadians face in these tough economic times," said Minister Flaherty. "The last thing they need is a surprise on their credit card statement. By increasing transparency, our Government is taking real action to protect consumers."
The new, landmark credit card regulations will:
- Provide a summary box on credit contracts and application forms that sets out key features, such as interest rates and fees.
- Inform consumers how long it would take to fully repay their balance if they only make a minimum payment every month.
- Mandate an effective minimum 21-day, interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full.
- Lower interest costs by mandating allocations of payments in favour of the consumer.
- Require express consent for credit limit increases.
- Limit debt collection practices used by financial institutions.
- Prohibit over-the-limit fees solely arising from holds placed by merchants.
- Mandate advance disclosure of interest rate increases prior to their taking effect, even if this information had been included in the credit contract.
The regulations apply to credit cards issued by federally regulated institutions. Some provisions in the regulations have broader application to other financial products, such as fixed- and variable-rate loans and lines of credit.
For further information, media may contact:
Chisholm Pothier
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
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