Thank you, Mr. Thibeault.
Mr. Jean.
Evidence of meeting #48 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
Evidence of meeting #48 for Finance in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was banks.
A recording is available from Parliament.
March 13th, 2012 / 5 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Thank you, Mr. Chair, and my thanks to the witness for attending today. I apologize for the lateness because of the vote.
We heard a bit about the dispute resolution services. Some new consumer protection is being brought into this act. For instance, the maximum fine of $200,000 is being brought up to $500,000. I know some people say this is not enough, but it is increasing the fine by two and a half times. There is the government cheque-cashing policy, which is important for the unemployed, aboriginals, and seniors. There are improved confidentiality information services. There are new operational efficiencies, which we hope will bring in some customer service. We also have some new credit card rules, including consent for limit increases, which I know is a common complaint, with full disclosure to consumers who hold those cards. And there is a code of conduct for the credit and debit card industry, which hits on fairness, service, and competition.
If I'm not wrong, these changes were brought about because some of your groups brought forward complaints from consumers. Would that be fair to say?
5 p.m.
Ombudsman, Chief Executive Officer, Ombudsman for Banking Services and Investments
It would.
5 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
So it appears that the government is moving in the right direction for improving consumer confidence and consumer protection.
5 p.m.
Ombudsman, Chief Executive Officer, Ombudsman for Banking Services and Investments
I think that's a fair characterization. The difference, though, between regulations and fair dispute resolution is significant. The regulations provide the rules by which everyone must play. An independent body, though, applies those rules in a way that finds fairness in individual complaint situations. They're different roles.
5 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I don't disagree with you at all on that, and I understand what you're saying.
I also understand what you're saying in relation to the unprotected security for banks. I don't know who brought that up. As a lawyer who used to do financing deals, that's one more box to check off and one more day looking at deals. That's going to create quite a few advisory rules for a number of professions, including lawyers and accountants.
I understand that they had to make a decision one way or the other. Reversing the Supreme Court of Canada decision and putting it into legislation is something important. Do you see any fallout from this as long as the practitioner guides go out and everybody keeps everything in order? I know that there could be a suggestion of a registration, a PPP or some personal property registry, that would be complementary to this.
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
Personal property security registration is working very well right now. We were informed that this was a technical bill. We respect that, and we understand that this is a technical fix. What I'm trying to draw attention to is that the Bank Act security provisions, which go back to 1890, are the worst form of red tape.
If we're really talking about red tape reduction, we're talking about something that had a purpose in 1890. It doesn't have a purpose in 2012. The PPSA systems in the provinces are very effective.
5:05 p.m.
Conservative
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
What's happening is that—
5:05 p.m.
Conservative
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
—this produces uncertainty. It produces costs. It's duplicative, because there's a second registration system. It's also unfair, because it gives banks a form of security that other lenders can't have.
5:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I agree, and I don't want that either, but what would you suggest in the circumstances? Would you suggest a fix by having them required to register a PPSA—
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
Which they do already.
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
Sure; I mean, they're using the PPSA systems as the main source of registration.
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
The 427 is just used as a backup if they have a problem with their PPSA. They don't, normally, but if they did, they could fall back on it.
Again, it's duplicative and costly. The lenders, the credit unions, have to search the Bank Act registry, and it's $50 at least. Their fees are over $1 million a year. That's just the registration fees, and—
5:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Banks charge so much money.
Oh, that wasn't banks; that was governments.
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
No, that's the lawyers, I think.
5:05 p.m.
Voices
Oh, oh!
5:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
I do agree that banks charge too much—speaking as a guy who uses banks a lot—and so do lawyers. Of course, I'm not a lawyer anymore, so I can say that.
How specifically does this act help credit unions? You mentioned a couple of ways, but do you see it on a day-to-day basis helping credit unions, relating beyond just consumer protection?
5:05 p.m.
President and Chief Executive Officer, Credit Union Central of Canada
Well, it's a technical bill, right? So there's not a whole lot in there that....
I mean, we have the sorting out of the classes of the CPA. We have some additional powers under the act. We have the extension of our charter, which is important to us. But it's a technical bill, so I can't point to a lot of things in there that help. There are tweaks here and there.
As I say, the one piece that we don't like is reversing the Supreme Court of Canada decisions that breathe some life back into 427 that we would prefer not be there, but we sort of understand why they're doing that.
5:05 p.m.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Do you think some of the tweaking for foreign bank disclosure requirements and foreign banks generally was helpful at all to the credit unions across the country?