Evidence of meeting #10 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was consumers.
4:25 p.m.
Conservative
Garth Turner Conservative Halton, ON
All right.
Finally, Monsieur St-Cyr touched on payday loans, a provincial area. Do you have any influence on that?
4:25 p.m.
Commissioner, Financial Consumer Agency of Canada
Payday loans are in the payday loans provincial area. Other than speaking out and reporting out on concerns around them, the power is not there.
4:25 p.m.
Conservative
Garth Turner Conservative Halton, ON
All right. So you influence three key issues.
Going back to the first, the outstanding interest rate on credit card balances, many years ago I chaired a committee that had a look into this, and nothing has really changed.
That doesn't really warm a parliamentarian's heart, does it, Joe.
We have the same situation today. Actually, we have a spread between the prime rate and outstanding interest rates...or credit card balances' outstanding amounts that actually exceed what we've seen in the past.
Is there any hope for consumers that anyone can do anything about narrowing that spread? Can you?
4:25 p.m.
Commissioner, Financial Consumer Agency of Canada
I don't know, Mr. Chairman. I hate to tell the honourable member, but actually, when I sat on this committee 30 years ago, we did a very similar thing.
There are more choices out there. There is a shift to respond sometimes to drive down a lower rate of interest. There are competitive choices; check out the site we've created on what people can check out.
Can we do something about that spread? There's hardly a market economy that's been able to come to terms with that, frankly; I'm just answering your question.
4:25 p.m.
Conservative
Garth Turner Conservative Halton, ON
We need another parliamentary inquiry is what you're telling me.
4:25 p.m.
Commissioner, Financial Consumer Agency of Canada
I think that's really in your hands in terms of the policy and what rate of return is made on cards.
4:25 p.m.
Conservative
Garth Turner Conservative Halton, ON
Okay. Enough of that.
Bank service charges, same thing; we've had a look at that before as parliamentarians, ad nauseam. We have more disclosure now, but I'm not sure consumers are completely happy with the level of bank service charges. We need to take a look at the banks' annual reports. Certainly service charges are significant areas of revenue generation for the banks, and they've been growing, not diminishing.
Who has any influence over that? Do you have any influence?
4:30 p.m.
Commissioner, Financial Consumer Agency of Canada
The mandate does not prevent there from being a fee. The mandate from Parliament is to get the full disclosure. What is influencing it--ever the optimist, here I go--is that in the last round we said we would open the doors to new entrants. We'd make it easier, for example, like credit unions--
4:30 p.m.
Conservative
4:30 p.m.
Commissioner, Financial Consumer Agency of Canada
Oh, sorry. I'll come back to that.
4:30 p.m.
Conservative
Garth Turner Conservative Halton, ON
As interesting as that is, he doesn't care.
I just want to know what we as parliamentarians can do if our constituents are concerned about service charges. What can we do, through you?
4:30 p.m.
Commissioner, Financial Consumer Agency of Canada
Two things. Number one is that we are driving an agenda to get consumers to shop around. We can come back to this--and I'd be happy to come back to committee again--because if people shop around, there are now entrants and players who are cutting their fees. They're out there. It may well be that parliamentarians may want to hear why they can do it and still make money.
4:30 p.m.
Conservative
The Chair Conservative Brian Pallister
Sorry, Mr. Turner, that's it.
Mr. Fontana, five minutes, sir.
4:30 p.m.
Liberal
Joe Fontana Liberal London North Centre, ON
Thank you, Mr. Chair.
Maybe I'll just pick up on where Garth left off, because back in 1988 and thereafter, we were asking exactly the same question.
First of all, a great organization to protect and educate consumers--I would agree totally--but I'm having a little problem understanding....
I take it you had 39,000 complaints last year.
4:30 p.m.
Liberal
Joe Fontana Liberal London North Centre, ON
Inquiries, but geez, an awful lot of consumers out there contact my offices and contact, I'm sure, every MP's office about interest rates, about service charges, about this, that, and so on. So I'm just wondering....
You say here, “Violations found: 120”, and “Administrative Monetary Penalties total: $117,000”. You also mention public warnings and so on and so forth. As I understand it, Bill, you're saying that your job...and I think it's a very important job, but we're trying to get to where the consumers actually want some sort of....
You can't do redress. When a complaint comes in from a consumer and they call your office and say, “Listen, I think somebody at this bank”--or this credit union or this insurance company--“has done something wrong on a calculation”, and you open up a file and find the evidence that points to that, you can't do the redress. Do you then send that out to the ombudsperson? You say that you work together closely.
First of all, I would think that there are probably hundreds of thousands of complaints. Who's getting all those complaints? I'm trying to find the division between what your organization does and what the ombudsperson does and to get to the very issues that I think Garth and others would talk about, the ones that are really....
If the problem is not so much regulatory, or the non-compliance by financial institutions, but that parliamentarians have to really get down to whether or not it's payday stuff or whether or not it's interest rates and services charges and banks and so on, which may be more legislative, then we ought to know that, and not give people a false sense of hope if they complain to you that you're going to remedy the interest rate charges. I think we assume that everybody out there knows what's going on in the marketplace, and I'm not sure they do.
I'm just trying to connect the dots here as to how we get to Garth's sort of problem and your job, and how it is that's legislative regulatory, and perhaps the other levels of ombudspersons who actually get to talk to the consumer and do the redress stuff.
4:30 p.m.
Commissioner, Financial Consumer Agency of Canada
Very quickly, if it's a redress issue we send it to the ombudsman. If it has no regulatory impact, I have no power over it--
4:30 p.m.
Liberal
Joe Fontana Liberal London North Centre, ON
But why would they call you in the first place, then? Why wouldn't they call the ombudsperson of the bank?
4:30 p.m.
Commissioner, Financial Consumer Agency of Canada
I think a lot of times they come through the Government of Canada--through the “maple leaf”, as I call it, in the system. They're looking for somebody to assist them. Sometimes we have to get them to where they need to be.
Just to add to that, quite often it's the Quebec authority or a provincial regulator.
4:30 p.m.
Liberal
Joe Fontana Liberal London North Centre, ON
It might be useful for the committee to know, of the 39,000, do you quantify them? Do you categorize them? How many interest rate complaints did you have? How many service charges did you have? I think it would be helpful to know exactly where this is coming from. Perhaps one could then do a comparison with the ombudspeople to find out exactly what's happening. There's such a thing as duplication in educating the public as to where they need to go to get redress for some of their issues.
4:35 p.m.
Conservative
The Chair Conservative Brian Pallister
Actually Joe, we can get you a copy of the annual report. It has a detailed breakdown of complaints and so on right in it.
If you want to elaborate, Mr. Knight, go ahead, but Mr. Fontana has only a minute left. If he wants to raise any other issues, we'll let him do that.
4:35 p.m.
Liberal
Joe Fontana Liberal London North Centre, ON
I think Garth asked this question, and it's important to know the answer. Do you ever give advice to the finance minister, based on the complaints and non-compliance and so on and so forth, that you need to fix regulations or you need to fix legislation in order to bring either clarity or some sort of fairness on behalf of the consumers on what needs to be done in terms of the legislation, the regulations, the codes, or even the education piece you do?