Finance Committee on June 7th, 2006

[John McKay, Liberal, Scarborough—Guildwood, ON]

Neither have I, and I agree with you.

[Bill Knight]

I have just an awful time; I've been at this for about 25 years, and I cannot quite fathom why there has to be any gap in the electronic systems as they're now functioning and particularly when we move to electronic.

Interestingly enough, the proposal on the electronic bill going forward might actually help.

[John McKay, Liberal, Scarborough—Guildwood, ON]

So you might appreciate a legislative prod along such lines so that when an electronic payment is made at a recognized institution it is instantaneously credited to the outstanding account?

[Bill Knight]

In an interesting way, the proposal on the electronic bill--or whatever it's called--that they're pushing for actually will enhance the settlement, so it should make for fewer excuses. There may be room for a quid pro quo when you get into the discussions that'll evolve out of the white paper, etc.

[The Chair, Conservative, Brian Pallister]

You have a minute and a half, Mr. McKay.

[John McKay, Liberal, Scarborough—Guildwood, ON]

You have a number of branch closures. From the chart in your annual report, it seems to be falling off a bit. My impression is that there's actually a bottoming out and that there are more openings than closures. Do you keep track of the openings as well?

[Bill Knight]

No, we're not mandated to keep track of the openings. I think, going forward, that would be a good question to the institutions, because then you can map where there are some severe impacts in central areas of Winnipeg and cross-compare that to where there may be new outlets.

I think it has levelled off in the last year or two. I don't want to jump to wild conclusions, but if you're a market watcher in terms of retail, there are a couple of things.

I'm not sure they have found--and again, I'm just giving you questions that you may want to ask them when they're before you, Mr. Chairman--that the big-box solutions they've been putting into the major cities are working out in the way they thought they would. In other words, do people actually use them?

Secondly, are they discovering that a kind of home-grown, local entry point is good for business? Some community banks in America are moving back into neighbourhoods they abandoned. It'd be interesting to ask them why.

[The Chair, Conservative, Brian Pallister]

Monsieur St-Cyr, five minutes. Please proceed.

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

Many residents and consumer protection agencies in my riding have talked to me about interest rates charged on loans, particularly payday loans, and the 60% rate provided for in the Criminal Code, if my recollection is correct. Many people have told me that lending institutions disregard this limit and that the costs associated with many loans easily exceed the 60% ceiling. Is this really a problem? Are you taking any steps to ensure compliance with the legislation? What is the penalty for failing to comply with the Criminal Code? Surely non-compliance results in sanctions of some kind.

[Bill Knight]

From day one in the annual reports, I've pointed out real concerns about the payday loan crowd. This is a growing and insidious bunch, as far as I'm concerned--just in case you think I don't have an opinion on anything.

I believe there's a real requirement for standards and enforcement of those standards, if at all possible. The complexity is that they fall within provincial jurisdiction. The Province of Quebec has very strong consumer laws as it relates to the dos and don'ts of this particular area. A number of the provinces are looking to step in to set certain rules and standards.

Just in the last week, a paper came out from a professor at York University. I commend it to the committee for a good read. It's insightful on what would happen if you started getting standards set. It's going to take coming back to the Criminal Code. The Criminal Code is enforced under the criminal law and not under an administrative tribunal regulator--so, don't have jurisdiction.

The solution to this has been under way under ministers of justice. My understanding, from comments to this committee from Minister Flaherty, is that there is emerging work to collaborate between the federal government and the provinces, where the federal will adjust the law to give the provinces running room, if they so wish, to take on the payday loan crowd.

I kind of take them on in the ways I can, in terms of information and material, and try to inform consumers in a manner to help them move away from their use. It's not easy.

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

Do you feel that charging interest of more than 60% on a loan is already illegal?

[Bill Knight]

Mr. Chairman, we could have another committee meeting on how the 60% came about. It was, I think, written on a napkin in a committee like this--again showing my age--all cooked up among members, a very long time ago, for a quick fix to get the amendment through. It might have been the justice committee. This was a long time ago.

So it became, for reasons that are not clear to me, very difficult to enforce in terms of use by police forces.

I have to be a little careful, because there is a case right now in the city of Winnipeg.

[The Chair, Conservative, Brian Pallister]

I'm sorry, Mr. St-Cyr, but your time is up.

Mr. Turner, five minutes, sir.

[Garth Turner, Conservative, Halton, ON]

Thank you.

Welcome to the committee. I have four questions, and I'd like really brief responses, if you don't mind--just informational only.

[Bill Knight]

Yes.

[Garth Turner, Conservative, Halton, ON]

You're mandated with consumer protection and consumer education. I'd like to know if you have any influence over the following four areas, and if you don't, perhaps you could tell us who does.

The first is outstanding interest rates on credit card balances.

[Bill Knight]

That's us.

[Garth Turner, Conservative, Halton, ON]

And what are you doing about it?

[Bill Knight]

We have oversight. For anything where there's a lack of clarity, we open cases against the institutions. I can certainly follow up with you on that.

[Garth Turner, Conservative, Halton, ON]

Fine. We'll come back to that in a second.

The next is bank service charges.

[Bill Knight]

Yes, we have oversight on full disclosure of all those fees. We do follow up. We have cases, and we've called them to account.

[Garth Turner, Conservative, Halton, ON]

All right.

There are two other issues, and we've touched on them already. One is the closure of bank branches. Do you monitor that?

[Bill Knight]

Yes.

[Garth Turner, Conservative, Halton, ON]

Do you have any authority to influence the banks on how they do that?

[Bill Knight]

Yes. They have to, at a minimum, pay attention if I get any complaints requesting meetings in the community. This is cause for meetings to be held in the communities. I don't have the power to say, “No, you can't close the branch.”