Ottawa, April 10, 2013
2013-054
Related Document:
Final Regulations and Regulatory Impact Analysis Statement - [1.76 MB]
The Honourable Jim Flaherty, Minister of Finance, today announced the final publication of new, pro-consumer regulations that will help Canadians resolve disputes with their banks in a more timely, impartial and transparent manner.
“Our Government is committed to protecting consumers,” said Minister Flaherty. ”These new rules create a stronger, more independent consumer complaint system, by setting high, pro-consumer standards that all banks and authorized foreign banks must meet.”
These regulations build on recent action by the Harper Government to require banks to belong to a federally approved external complaints body, while extending monitoring and enforcement powers to the Financial Consumer Agency of Canada (FCAC).
Prior to the Harper Government’s action, although financial institutions were required to be a member of an external complaints body, there were no regulatory standards for external complaints bodies and no monitoring by FCAC. Banks were allowed to select their external complaints body—with no minimum requirements that had to be met and no guarantees for consumers. This led to uncertainty for consumers and uneven expectations of outcomes.
“This new oversight, in tandem with additional compliance monitoring of the complaint system by FCAC, brings needed transparency and rigour to the complaint-handling process, so Canadians can expect faster, more effective recourse when issues arise—for example, an issue with a mortgage—and at no cost to them,” said Minister Flaherty.
The regulations published today set out explicit requirements that external complaints bodies must meet for the first time ever, including high standards for independence, timeliness and transparency. For example, the regulations formalize existing expectations that banks and authorized foreign banks notify customers of the name and contact information of their external complaints body. External complaints bodies will also be expected to assist Canadians who are a party to a complaint by helping them navigate the complaint-handling process.
“External complaints bodies will be fully expected to help consumers throughout the independent complaints process,” added Minister Flaherty.
The regulations also require that external complaints bodies, as well as banks and authorized foreign banks, publicly report information about the complaints they receive and investigate on an annual basis. This will provide consumers with a fuller understanding of the number and nature of complaints and of the effectiveness of the consumer complaints framework for banking services as a whole.
A company or not-for-profit corporation that wishes to serve as an external complaints body will be required to submit an application to the Commissioner of FCAC demonstrating that it meets the high standards in the regulations. Once it is independently assessed, the Commissioner will refer the application to the Minister, along with a recommendation.
FCAC will be issuing an application guide to assist potential applicants.
“Banks should work to resolve customer complaints internally, whenever possible,” said Ursula Menke, FCAC Commissioner. “When a customer is able to resolve an issue with their bank, it promotes confidence in the financial system, while giving the institution itself better insight into its own compliance with applicable Acts, voluntary codes and public commitments.”
Companies and not-for-profit corporations can submit their application to FCAC starting September 2, 2013, the date on which these regulations come into force. This timeframe affords potential candidates sufficient lead time to prepare and review their applications against the criteria being published today, and the application guide to be made available by FCAC.
The regulations are available online in the Canada Gazette, Part II.
Kathleen Perchaluk
Press Secretary
Office of the Minister of Finance
613-996-7861
Jack Aubry
Media Relations
Department of Finance
613-996-8080
