Bill C-37 (Historical)

An Act to amend the law governing financial institutions and to provide for related and consequential matters

This enactment amends a number of Acts governing financial institutions. It also amends legislation related to the regulation of financial institutions. Notable among the amendments are the following:
(a) amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, and the Trust and Loan Companies Act aimed at achieving three key objectives:
(i) enhancing the interests of consumers,
(ii) increasing legislative and regulatory efficiency, and
(iii) adapting those Acts to new developments;
(b) amendments to the Bills of Exchange Act to provide for the introduction of electronic cheque imaging; and
(c) technical amendments to the Bank Act, the Cooperative Credit Associations Act, the Insurance Companies Act, the Trust and Loan Companies Act, the Bank of Canada Act, the Bills of Exchange Act, the Canada Business Corporations Act, the Canada Deposit Insurance Corporation Act, the Canadian Payments Act, the Financial Consumer Agency of Canada Act, the Green Shield Canada Act, the Investment Canada Act, the National Housing Act, the Payment Clearing and Settlement Act and the Winding-up and Restructuring Act.

Bank Act

[Thierry St-Cyr, Bloc, Jeanne-Le Ber, QC]

Mr. Speaker, I thank my colleague for his question. It allows me to continue to talk about the bill that the Bloc Québécois put forward to use the surpluses from the Canada Mortgage and Housing Corporation.

We have to understand that this money did not fall from the sky. Of course, this money is paid by people who receive mortgage loans to buy their house. These are people who have bought a house and whose situation—we hope— is favourable.

In the Bloc Québécois, we really saw this as a solidarity measure, that is taking the surpluses in the Canada Mortgage and Housing Corporation and continuing to invest them in housing to improve the quality of the rental housing stock, to build new housing units, that is low rental units, cooperatives, affordable housing and to have all kinds of housing programs. We wanted this money not to be left there indefinitely. Once again, there are no real reasons of caution that require that all these funds be left with the Canada Mortgage and Housing Corporation.

Of course, the provisions to respect the areas of jurisdiction of Quebec and the provinces provided that this money would be transferred to the Quebec government, which could use it for this purpose.

It is a little sad to see that Liberal and Conservative members opposed this measure. I believe that housing is still a huge concern for citizens everywhere in Quebec and in Canada.

In my riding, I know that there are many housing needs. I go door to door a lot. I meet people and they tell me often about this. I am surprised and I have a hard time believing that, in ridings represented by Liberal and Conservative members, people are not facing the same kind of problems. I was a little surprised not to receive their support concerning this important bill that we introduced in the House.

[Penny Priddy, NDP, Surrey North, BC]

Mr. Speaker, I am pleased to speak to what is an important issue for many people but not one that is part of their dinner table conversation every evening. Nevertheless, certainly in the constituency I represent, Surrey North, it is one that affects the lives of people daily.

Most people who are members of a family, be it a lone parent family or an extended family, are trying to make enough money simply to feed the children, maybe to get them new sneakers for school, maybe to pay for field trips, and to have a safe roof over their heads. Those people do not have the time or the opportunity, or perhaps the knowledge to read in any great depth the Bank Act, the regulations within it and how they might affect their family. Constituents count on their MPs to represent them and to be their voices in this Parliament. Some people have the time to sit down and work this through, but for those who may not have that opportunity, there are some questions that they would be asking us.

I represent Surrey North, which is one of five constituencies in Surrey. The city of Surrey has 400,000 people. The average three bedroom house is worth about $350,000. That is an average starter home, which for many people would be wonderful, but there are many young people who will not get into the housing market.

One of the recommendations made by the Consumers' Association of Canada had to do with the limitation on first mortgage funding. I realize there are some disadvantages to raising first mortgage funding from 75% to 95%, but I am not sure that the risks outweigh the benefits. There are many people, some of whom perhaps are our children or grandchildren, who, if they stay in urban areas like the B.C. lower mainland, Toronto, Montreal, Calgary or Edmonton, will never get into the housing market because they do not have $50,000 to $60,000 or more for a down payment. That recommendation made by the CAC should have been looked at very carefully. I recognize there are challenges with it, but I think that the benefits outweigh the challenges.

One of the things that my constituents will notice on a fairly regular basis has been talked about at some length lately, and that is the use of automated teller machines, ATMs, and not just the use of ATMs but the cost of using ATMs.

Some of my family have been living in Great Britain for the last three years. When I was visiting there, I discovered there was no charge for using a debit card. I was quite surprised, because I know what the charge is for using one here. People may not talk about the Bank Act at the dining room table, maybe because they are too busy trying to make sure there is enough food on it, but people do notice the charges when they use the ATMs.

Some people only take out very small amounts, maybe because that is all they have in the bank. They may be paying 25% on what they are taking out, and that is just to get the money out. They cannot get into the bank during what are called regular working hours, or their bank branch has closed and they cannot get to a bank of any kind. The ATM fees are ones that people notice with great regularity.

When folks pick up either a newspaper to which they have a subscription or pick up one of the free dailies out there and see a huge headline in big bold print that says, “Bank Profits $19 Billion”, they look at their bank statements.

I do not know whether everybody in the House looks rigorously at their bank statement every month, but people who do not have very much money look at their bank statements regularly. They are just cutting the line. The speaker from the Bloc, who would have much more money than some of the people I have talked about, said earlier that he ran into a difficulty with having money in the bank but not being able to access it. However, these folks pay attention to that part.

When they see bank profits of $19 billion, they do not know why they have to pay money to take their money out of the bank. Nobody wants the banks to suffer losses. People would expect the banks to make a profit. They invest their money. That is why people put money in banks. However, charging twice for the money they invest for us seems to my constituents to be a little beyond the realm of reason.

I do not happen to currently live in a rural area, but I have lived in a rural area in a small town of 1,600 people and the bank closed. The next bank was about 42 miles away. What is the responsibility of the banks when they close? Is it simply to pack up the boxes, lay off the staff and move out town?

I know motions were put forward to the committee on public accountability for bank closures or proposed bank closures. I know the motion was defeated. I do not know what we expect people to do. Perhaps people who have cars or trucks and can drive in every kind of weather et cetera, can get to that town 42 miles away. Otherwise, what does one do?

If people cannot get the cash from the bank, they might do the rest of their banking online, which is a presumption that everybody owns a computer and has Internet service. There are parts of provinces where Internet services are not available to them. Also some people do not have computers or if they have, they not have Internet service.

The fact is there is no accountability for those people who have supported and counted on that bank. In a small town a different relationship is built with a bank than in a big city. It becomes part of the family, something that they count on, or some buddy to count on, the bank manager or others in the bank, and that is gone. Where does one go for advice? Where does one even go to take money out? An amendment to suggest that there be some accountability for that was defeated.

As I said, I live in an urban area. I do not consider that to be an issue for me, but it would be for many of the MPs who represent their constituents in the House.

One success is the member for Winnipeg North has put forward a motion to review ATM fees. I congratulate her for that. I hope, as I think others do, that the standing committee will look at banks and subsidiaries, other financial agents and networks that provide financial services to people. I hope everybody will come forward to testify so the results of the study will be comprehensive.

This is one of the things that constituents count on us to do. They cannot do this for themselves. They do not have the time nor the expertise. They expect us to do it. We have that responsibility.

We have heard a lot about accountability and transparency. I do not know if those words still mean anything, but we hear a lot of talk about transparency. I spent too many years teaching college, I guess, because for me transparency is a slide on top of an overhead. Nevertheless, the concept is important.

The motion to publicize the names of banks that violated the consumer provisions of the act was disallowed. The names of businesses that violate their business licence are published by the Better Business Bureau. The names of physicians or teachers who have been disciplined or have had their licences removed are published. The public has the right to know. The motion that we publish the names of banks that violated consumer provisions of the act was defeated.

Why should violations by institutions that make a $19 billion profit be disallowed when we hear a great outcry from the public, and often a very legitimate outcry? Constituents in my riding want to know if teaches, or physicians, or accountants or anybody for that matter have violated their professional code of ethics or their business licences. They want to know who these individuals are. Why should banks be somehow exempt from this? I am very puzzled and somewhat disappointed that the motion was defeated.

If we buy something at a store and we ask the price, we are told, for example, that it costs $7.99, just like it says on the tag. The store discloses the price. However, when we asked about the mandatory disclosure of ATM fees, which was another motion put forward, we were denied.

My bank provides a service to me. I do not provide a service to it. Yet I am not allowed to know what ATM fees are so I can make some comparisons, as anybody would if they were good consumers. Good consumers want to know how much something costs, no matter what they buy. Somehow the committee felt there could not be mandatory disclosure of ATM fees. Perhaps there is some extremely complex reason that I fail to understand as to why these fees cannot be disclosed.

Constituents in my riding do not think there is any reason why these fees cannot be disclosed. That is one thing they understand. They understand credit card interest and they understand their ATM machines and what they pay to use them. They do not have time for the rest. My constituents are raising families and trying to get their kids to soccer, read report cards, take part in school curricula. They do not have the time to look at this kind of information on a regular basis. The publication of this information would be a real service to people. It certainly would be a real service to people in my riding of Surrey North.

Earlier the member for the Bloc spoke about holding cheques. If people live below the poverty line and get a cheque, they do not have the luxury of waiting a week for somebody to clear it. They need that cheque for food. Maybe their child has a chance to participate in sports and they need to buy soccer boots to participate. They need to cash the cheque, not have it held for 24 hours.

I put a Government of Canada cheque in the bank the other day. From what I hear, its reputation is superb, but the cheque was held by the bank for 72 hours. For me it did not matter, but for those people who truly are living from dollar to dollar, to hold a cheque like that is not fair, it is not right and it is not just. It may prevent them from buying a prescription for penicillin, for which they did not budget, for a child who has a rip-roaring ear infection or for somebody else in the family who needs something that requires a medical fee. They need it then, not in a week when the medication will not work on that child who has laid in pain for the week. I am using a very simple example in that case, but in the lives of most people they are simple examples.

We have people who do not have an address. They live on the streets. None of us wish for this, and people are working at ways to correct that situation, but thousands and thousands of people still live on the streets. How do they bank because they do not have an address? There are all kinds of banks that discriminate against people because they do not have a home address. This is one of the issues that should have and could have been addressed, but it was not.

I have talked about the credit card fees and interest rates. We can say people should not run up their credit cards because they have such a high interest rates and the cards will never be paid off. How many of us have been in a position of having to make the decision to feed the kids, or fill a prescription?

We hear a lot in the news about pharming of identity information on the Internet and the fact that there is no public disclosure when there has been a breach of security. No one has a duty to notify me or any of us. Yet this has happened recently to stores and companies and people have been up in arms that they have not been notified. It is terrible that these companies have not notified these individuals, but what about the duty of banks to notify any of us. Maybe some of us if that happened would not have our rent cheque bounce. Companies do not have a duty to call and say their security systems have been breached, that there has been identity fraud and that individuals have been affected by this. The motion to include that was defeated as well.

There are many missed opportunities in this bill. The comments of the CAC have been very relevant about what could have been accomplished and was not.

With that I will close and say that while I know we have a duty to review the Bank Act every five years, I hope we will take it more seriously than a housekeeping measure.

[The Acting Speaker, Royal Galipeau]

Normally at this time I would announce to the House the subjects for the late show. The only announcement I have today is that there will be no late show.

Questions and comments, the hon. member for Winnipeg Centre.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, while I thank the hon. member from Surrey for her comments, I think I can glean from those comments that she shares some of my frustration, in that the population I represent does not feel well served by the banking system and, by extension, by the Bank Act that governs it.

I would like her to elaborate on one or two of the aspects of her speech. When the banks introduced ATMs, my recollection, and I have this on good authority from credible sources, is that there were no fees at all associated with ATM cards when they were first introduced. Banks were seeking to close branches, lay off tellers and save money by electronic e-commerce banking. It was to their great advantage that they weaned us from personal service from a bank teller at our local neighbourhood community bank to that machine, an impersonal cold machine that the banks do not pay wages or give pensions to.

However, I do not think that at the time the thought ever occurred to the banks that they could actually get away with charging us a fee for this privilege as well. That seemed to come later. Is it the member's recollection that there were no fees when banks first introduced these bank cards?

The other thing I would ask her to comment on is this idea of what may be a failed opportunity with the Bank Act. I crashed the shareholders meeting of two major banks a few years ago, the Royal Bank and the Bank of Montreal. I went there with some proxy shares with a member from the Bloc, a man named Yves Michaud, a great activist on banking rights.

We moved motions at that meeting. One was to make sure that the boards of directors of those banks had gender parity: 50% men and 50% women. The vote was 49.4% in favour and 50.6% opposed, which is the exact same ratio as the last Quebec referendum. Yves Michaud's vote on gender parity for the banking institutions was exactly the same, 49.4% to 50.6%, but we almost did it. They almost fell off their chairs because this one lone activist from Quebec, Monsieur Michaud, with me there to second his motions, almost toppled that shareholders meeting.

The other motion, which sadly did not succeed, was a motion to limit the salaries of the CEO to 20 times that of the average worker of the bank. Currently that is at about 150 times; it is at $7 million, $8 million, $9 million or $10 million. That motion would have limited it to $50,000 times 20.

Does the member concur that these shareholders rights activists' initiatives are necessary and worthwhile? Does she remember, in her recollection of ATM charges, that there were no bank fee charges for using an ATM in the old days? Some young turk got a promotion because he came up with this idea and said, “Hey, I bet we can charge for this and they'd still use the ATMs”. He probably built a career around that one.

[Penny Priddy, NDP, Surrey North, BC]

Mr. Speaker, I am sure it was a young turk, not a young turkess.

I do not remember that there were fees when ATMs started. What I remember next was that there was a fee for one's own ATM but there was not a fee for using one's card at another bank's ATM. That was sort of stage two, if I recall correctly, and I certainly stand to be corrected.

[Norman Doyle, Conservative, St. John's East, NL]

It's the other way around. There wasn't any fee for your own bank.

[Penny Priddy, NDP, Surrey North, BC]

It is the other way around, my Conservative colleague tells me. There was a fee for another bank and now there is for both, so we have not only one but two fees that people manage to get from this.

One of the things that I think is important about this is something my colleague has alluded to. I would say this anyway, but International Women's Day is next week, March 8, and we will not be here, so I cannot say it then. I will say it now. Most of the staff who were laid off were women. They were tellers and support staff. They did not always have an opportunity to move with the bank and did not have other opportunities in their own towns. Therefore, women were disadvantaged disproportionately when those banks closed.

As for what I think about activism, of course I think any activism is always necessary. We are all shareholders, whether or not we hold shares in banks. A lot of people hold shares in something. They watch their shares and they check them and they may read the paper in the morning, but they never go to a shareholders meeting to actually ask questions and try to make a difference. That kind of activism is always important, as is any kind of activism.

What I saw was an irony in the fact that the major banks at that time were working very hard to increase the number of women in management positions, because they were doing this, by the way, and they actually had programs to do it. They actually were quite successful at it, but at the same time they were closing banks and disadvantaging primarily women. There seemed to me to be a certain irony in that.

[Garth Turner, Conservative, Halton, ON]

Mr. Speaker, I have a question for the member. I listened closely to her comments about mortgages. She seemed to indicate that her preference would be to have a higher mortgage amount or, in other words, 95% financing extended to purchasers.

I am wondering if I could ask the member to comment, because it strikes me that allowing 95% financing across the board, presumably as we do it today and even getting into what is called the sub-prime market where borrowers can actually borrow an amount greater than the value of the house, just increases indebtedness. Is that not an indenture on those very lower income people the member is speaking in favour of? In other words, increasing the amount of interest that is paid back to the financial institution over the life of the mortgage actually puts the homeowner more at risk, particularly in markets where the real estate housing market may have exceeded its true value.

Again, I am thinking of the lower mainland, where the 2010 Olympics are going to take place and we see housing prices that have risen to a new high. As for people buying into that market with 95% financing, I am a little curious as to how the member justifies the transfer of wealth from the individual homeowner to the financial institution based on that. It does not seem to make any sense from her philosophical point of view. Perhaps she might be able to enlighten us.

[Penny Priddy, NDP, Surrey North, BC]

Mr. Speaker, I did say at the time, and actually this was also a recommendation from the Consumers' Association of Canada about mortgages, that generally CMHC serves people fairly well in terms of second mortgages. There are downsides. I agree. I know that we have seen people get into the market, then the interest rates go up and, the member is right, they end up paying the bank a larger amount.

What we are not doing, and I am talking about this as it pertains to the Bank Act, in any place that I live in or see is building homes that are in any way affordable or off market. It is one of the ways to do this. Maybe we do not do it across the board. Maybe we have to do very careful assessments, as we would with any mortgage. I am not saying that I think this is full of advantages and that there are no disadvantages. I take my colleague's point. There are downsides and there are risks in this as well, but at 75%, we are really the first generation in history whose children or grandchildren, depending on our age, will be less well off than we are. So for--

[An hon. member]

How does she know?

[Penny Priddy, NDP, Surrey North, BC]

I am sorry. I did not hear the question the member asked.

[An hon. member]

He said, “How does she know?”

[Penny Priddy, NDP, Surrey North, BC]

Perhaps he should read more.

For young people to get into the housing market, this is one way that I would hope people at least would look at and assess. I take the member's point. There are both advantages and disadvantages to this. I do not argue that at all.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I am pleased to speak to Bill C-37, An Act to amend the law governing financial institutions and to provide for related and consequential matters or, in other words, the bill that represents a statutory five year review of the Bank Act.

I would like to state that during the finance committee's deliberations or hearings on Bill C-37, I had the pleasure of chairing the committee because of the problem with the chairman having to excuse himself. I would like to take two minutes to thank all the members who were quite understanding that this important piece of legislation with over 450 clauses had to be passed in a relatively short period of time.

I would like to thank the witnesses who appeared before the finance committee on short notice and gave us pretty detailed presentations. I would also like to thank those people who participated in the deliberations.

I would like to talk about the current session of Parliament where the Standing Committee on Finance, of which I am the vice-chair, has seen its share of contentious issues and serious studies.

First, committee members undertook the long, cross-country prebudget consultation with Canadians that spanned over months, eight provinces and one territory.

Thanks in part to the diligence of the Liberal members, the finance committee also reviewed the finance minister's astounding decision to tax income trusts. This unbelievable policy reversal has taken $25 billion from the pockets of hard-working Canadians and billions of dollars in income taxes that would have been collected on the capital gains to pay for some of the requirements that will be needed by the government in its next budget.

The committee has not tabled its report, just in case anybody in the House is unaware. We will table that tomorrow. This controversy is probably the most contentious piece of legislation related to tax legislation that I have seen since I have been here in the House.

The committee is also not adverse to controversy and is now studying the tax implications on the oil sands sector, an initiative that was also supported by the Liberals. The committee, with the support of the Liberals, is also once again studying how ATM fees are charged by the banks, their subsidiaries, other financial agents, and other networks that provide these financial service organizations, and any other things related to these communications services outlets.

To this I am hoping to add as well that the whole issue of the timeliness and charges that relate to electronic payments also get addressed during the study in finance committee.

With all these issues before us during the last few months, it is understandable that the finance committee members breathe a small sigh of relief when a straightforward bill like Bill C-37 comes before us.

Bill C-37 represents legislation that is likely to receive support from all parties. Recently, I heard the Prime Minister complain about the difficulties of receiving the will of Parliament to pass legislation, but with Bill C-37, it seems that the Conservative Party has finally discovered the secret to obtaining unanimous support for one of its bills, and that secret is easy. All the Conservatives have to do is introduce Liberal bills.

The Conservative government has presented a bill that mostly follows Liberal policy. Just to give a little bit of history, in 2005 the Liberal government commissioned a white paper to make recommendations for the review of the Bank Act, which is what we are discussing today. I am pleased that the Conservatives have seen the wisdom in these recommendations and have adopted most of them. They have ended up in what we are seeing today, Bill C-37.

The purpose of the bill is to ensure that Canada continues to be a world leader in financial services and I believe that the current bill takes important steps toward that end. As technologies related to financial institutions evolve, it is important that Parliament keeps our country's laws in step. We, as parliamentarians or legislators, must continue to keep our laws up to date as we did during the past 13 years of Liberal government in an ever changing global economy where Canada will quickly fall behind other more proactive nations if the Conservative government does not follow Liberal policy.

Bill C-37 amends a number of acts governing financial institutions as well as legislation related to the regulation of financial institutions. These amendments are essentially designed with three objectives in mind.

The first one is to improve service to consumers. For example, and I will speak a little bit more on it later, it is to harmonize online and in-branch disclosure requirements. We are looking at decreasing the hold periods for cheques from ten days to seven days and we hope it will get down to four days.

The second objective is to increase legislative and regulatory efficiency in the Canadian banking system. This basically means to allow foreign entities and allow more competition to come into the markets, and have what we call these near banks or entities that provide banking type services to be regulated on a national level as well.

The third objective of this bill is to give our financial institutions the ability and flexibility to adapt to changing trends and technologies in the industry, which also means allowing for cheque imaging and providing the financial institutions with the ability to process cheques at a quicker pace so that there is less of a hold period on these cheques.

One of the innovative items in this bill is the writing of electronic cheque imaging into law. We finally got it in this bill. It will require the banks to use new technologies to better serve the needs of Canadians. As it stands right now, the maximum hold period on a deposit cheque is 10 business days.

That can be an excessively long time for some Canadians, especially as we have heard from low income Canadians who need access to these funds much quicker in order to pay their bills, buy food, and whatever else they deem a necessity. Bill C-37 will immediately lower this hold period to seven days, allowing Canadians faster access to their own money.

This can be done even faster. I am speaking specifically to electronic cheque imaging which Canada's banks have already begun to implement. By adopting electronic cheque imaging, banks will no longer need to physically exchange copies of cashed cheques with other institutions. Instead, a captured electronic image of the cheque can be sent instantaneously to other financial institutions.

While we were discussing imaging we heard that banks easily clear about 20 million to 30 million transactions a day. We heard of the logistics involved of having to transport a cheque from one part of the country to another part of the country and having to criss-cross and decide which cheques go to which institution. Now with this ability to electronically image a copy of the cheque, we should be able to speed up the process. Hopefully, we will cut down the holding period to a matter of one or two days, instead of the seven days that is in the legislation, and the four days which the finance minister has promised us will be the norm of financial institutions.

A second aspect of Bill C-37 that I approve of is the provision for an increased disclosure regime which will provide Canadian consumers and businesses alike with the information that they need in order to make the most informed investment decision possible.

Bill C-37 will ensure that the savings product disclosure regime is just as effective for the millions of online bankers as it is for in-branch customers. We have spoken about this before. I think it makes sense to have that in the bill.

Strong competition and information disclosure are two of the best tools available to ensure that the needs of Canadian customers are being served well by our financial institutions.

On the disclosure front, however, I am disappointed that the Conservatives have ignored one strong suggestion from the white paper regarding the complaints process that financial institutions use.

I imagine that many Canadians are not very familiar with the complaints process that they have at their local bank or anywhere actually. It should be legislated. By legislating the complaints process, it would have been readily available and a good idea. I can guarantee that there are not too many Canadians who even know that there is an ombudsman for banking services and that they can use those avenues when the opportunity arises.

The Canadian banking ombudsman and his office do fine work from what I understand. It is a question of knowing that it actually exists. I would have liked to have seen a requirement for information about its services being made readily available and more money being spent so that its services are actually put on websites so that people know about its services.

Canada's mortgage loan insurance threshold will also be changed by this bill. Currently, any homebuyer who provides less than a 25% deposit is required by law to ensure a mortgage through the Canada Mortgage and Housing Corporation or similar private sector providers.

Bill C-37 will reduce this minimum required from 25% to 20%, allowing more Canadians to secure a home mortgage without having to pay for the additional cost of mortgage insurance. Obviously, it is sensible to have some sort of legal threshold under which Canadians must purchase their mortgage insurance.

During the Mulroney years of uncontrolled inflation, it was far more than sensible. It was both prudent and necessary. After a decade of strong Liberal leadership, however, this country is enjoying both low inflation and record low unemployment. As a result, I think it is more than reasonable to reduce the minimum deposit that Canadians must have in order to secure a mortgage without insurance.

In conclusion, I am pleased to support Bill C-37 at this stage. I am glad to see that the Conservatives are continuing to implement the Liberal agenda on so many fronts. It is, after all, the same Liberal agenda that saw Canada make a complete economic U-turn after years of Conservative fiscal mismanagement. It was not that long ago when The Wall Street Journal referred to Canada as a third world economic basket case because of the damage done by the previous Conservative government.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, I listened to my colleague's remarks regarding the Bank Act and I share some of the frustration and concern that I heard him express. In the inner city riding that I represent, the banks abandoned, systematically over the last decade, 15 bank branches. My colleague from Winnipeg North experienced something similar. I believe she counted 13 bank branches that folded up their tents and took off from that inner city community.

The point I am trying to make is that the banks were given the exclusive monopoly on some very lucrative financial services in exchange for the duty and the obligation to provide basic financial services to all Canadians whether it is small town rural Manitoba or the inner city core areas of Surrey, Vancouver or Toronto.

They broke that compact. They tore that agreement up and threw it out the window, yet we still call them charter banks. They still enjoy the exclusive monopoly on these very lucrative financial transactions, yet they broke their end of the deal.

The point I am making is that when they fled the inner city, they left a financial services void, a vacuum that was filled very rapidly with what I call fringe bankers, the payday lenders that sprouted up like mushrooms, like a scourge on the inner city.

They offend the sensibility of every Canadian when they charge 10,000% interest on a basic loan. People think I am making that figure up. A study done by the University of Winnipeg studied fringe banking. It ranged from 1,000% at the low end to 10,000% interest. A person cannot make that kind of money selling cocaine.

It is organized crime that is behind a lot of these payday lenders. I say that with no hesitation and no fear of being sued. We know that for a fact. There is nothing else that can be done in this country to make the kind of financial return as payday lenders receive with their loan-sharking practices.

My concern and what I wanted to raise with my colleague, whom I know probably faces similar issues in the Montreal riding that he represents, is that the banks are not serving us well. We have one opportunity every five years or so to have a statutory review of the Bank Act and we fail to address some of these fundamental issues.

Why do we not force the banks to live up to their obligation to provide basic services? Why do we let them close bank branches that are still profitable, they are just not profitable enough, or they are not as profitable as their branch out in the suburbs?

Why do we let them put up ATMs that mystify and baffle people like my mother who has banked at the same street corner of Grosvenor and Stafford since 1948 until that bank branch closed? Now there is this nameless, faceless, cold ATM that she is supposed to try to figure out how to use, and then to add insult to injury, they start charging these exorbitant banking fees just to access her bank account.

Really, when we add up all these things, the banks have been raking it in making record profits. Every quarter they set new records. There are not many industries, not many sectors, that have set record profits every single quarter, year after year after year. Why can we not rein these guys in?

Why did this committee not have the guts to take the banks on and tell them they are not living up to their end of the deal with their charters, and to start doing it or we are going to tear up their charters?