Finance Committee on March 13th, 2012

[Tyler Sommers]

What we're recommending and suggesting is for oversight primarily through the pamphlet method, which has been recommended by the MacKay task force, and Senate and House committees. Essentially this would just involve the creation of a watchdog group to watch over the financial institutions and the federal government.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Vinet, do you have any specific suggestions concerning credit cards and loans?

[Jean-François Vinet]

As concerns banking fees, Canadian financial institutions made a commitment to the Department of Finance to offer accounts with moderate fees.

As you know, Canadians generally have access to accounts that allow for between 7 and 10 transactions at a monthly fee of $3. However, we know very well that Canadian consumers perform much more than 7 to 10 transactions per month. In fact, they use their debit card to perform an array of banking transactions.

Therefore, we should perhaps ask financial institutions to increase the number of transactions that are allowed in low-cost accounts. That is an idea for example that could be studied by the government and on which an agreement could be reached.

In fact, it is not a law. It is an agreement that was reached with some financial institutions, that is respected and that has a domino effect on other financial institutions. Given that some of them have the obligation—and I am referring especially to the largest Canadian financial institutions—to offer low-cost accounts, the other institutions are encouraged to offer the same thing, given the competition.

Think of the credit cooperatives. In Quebec, we have a major one, Desjardins, which must also offer accounts at competitive prices. So this type of approach has a beneficial effect on the market. It could be an idea.

As concerns credit card fees, we first have to tackle criminal interest rates, and reduce them by at least half if not more.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Do you receive a lot of complaints from consumers on this topic?

[Jean-François Vinet]

Yes, but I would say that consumers have lost hope that governments will take real action to reduce the fees that financial institutions levy. Perhaps that is why we receive fewer complaints from consumers on this topic.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Mr. Sommers, did you get comments regarding the latest increase in fees? Were there any complaints or what was the reaction?

[Tyler Sommers]

Whenever we see increases in fees, typically, people are not happy. That's a continuing trend.

[Hoang Mai, NDP, Brossard—La Prairie, QC]

Again, your suggestion is that it's really important that there be a bit of oversight on the issue right now, especially right now.

Mr. Phillips, can you clarify in terms of you not being concerned, because we had some comments from

the credit union movement

regarding the fact that the approach the government is using regarding cooperatives is a concern for the movement. It's not for their credit union?

[David Phillips]

I'm not sure I understand the issue. We don't have a particular concern in this bill other than, as I say, I think it misses an opportunity to deal with this issue of the Bank Act security.

[The Chair, Conservative, James Rajotte]

Thank you.

We'll go to Ms. Glover, please.

[Shelly Glover, Conservative, Saint Boniface, MB]

Thank you, Mr. Chair.

Once again, I want to make sure that Mr. Phillips knows that I didn't mean to say he wasn't interested in the measures.

But I do find your statement interesting about our not going far enough, which, of course, I'm going to take under consideration and I intend to look at following this meeting.

I want to complete what the chair was trying to get from the witnesses.

I'll ask Mr. Sommers, and if I ask it in a systematic way, perhaps that might help. It seems Mr. Vinet does not want to answer the questions. But if you would allow me, I'm going to ask you if you think the measures we're taking with regard to new credit cards, where we now have in place a requirement for banks to get consent for credit limit increases, are good.

[Tyler Sommers]

As I mentioned in response to the question, there have been several small steps forward.

[Shelly Glover, Conservative, Saint Boniface, MB]

No, on that measure itself, is it good or not?

[Tyler Sommers]

It is a small step forward.

[Shelly Glover, Conservative, Saint Boniface, MB]

Is it a good measure?

[Tyler Sommers]

As I mentioned, they are small steps forward.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay.

On the 21-day grace period on new purchases, then, is that a good measure or a bad measure?

[Tyler Sommers]

I can go through and say these are all small steps forward.

[Shelly Glover, Conservative, Saint Boniface, MB]

No, no. If you'd allow me to do my job as a parliamentarian, I would like you to tell me specifically whether it's a good measure or a bad measure. If you think it's bad, the government ought to know.

[Tyler Sommers]

It will protect a few customers and it will protect them from a few charges.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay. The fact is there's now full disclosure for consumers and a limit on other anti-consumer business practices. Is that a good measure taken by the finance minister or not?

[Tyler Sommers]

It's a small step forward, yes.

[Shelly Glover, Conservative, Saint Boniface, MB]

Okay.

Bringing in the code of conduct for the credit and debit card industry to help small businesses, is that a good measure or not?

[Tyler Sommers]

A small step forward.

[Shelly Glover, Conservative, Saint Boniface, MB]

Banning negative option billing for financial products, is that a good measure or not?