Finance Committee on Feb. 20th, 2007

[The Vice-Chair, Liberal, Massimo Pacetti]

Mr. Dupont.

[Serge Dupont]

In response to the member's question, I just want to indicate that I'm not questioning at all the legitimacy or the soundness of the proposal. I'm simply saying that I've not been apprised of it. I'm not aware that my colleagues at this table have been apprised of it, so I don't really know what's in there. I would certainly be pleased to undertake to look into it and to have those discussions with the Consumers' Association, but it's difficult for me to comment further at this time.

[The Vice-Chair, Liberal, Massimo Pacetti]

Okay, I will call the question.

(Amendment negatived)

(Clauses 32 and 33 agreed to)

(On clause 34)

[The Vice-Chair, Liberal, Massimo Pacetti]

Does the NDP want to speak to their amendment to clause 34, reference number 2708438?

Ms. Wasylycia-Leis.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Mr. Chairperson, this issue was raised by a number of witnesses. It's a major issue in many of our communities when families try to cash a cheque. They need the money for day-to-day living and they are encumbered with the fact that there's a hold on that cheque for currently up to ten days. Somewhere I heard over the course of these hearings that this is being changed to four to seven days, although I couldn't find the reference in the bill. If I could get that, it would be helpful.

I'm suggesting we need to do better than that. What we heard yesterday from folks was that it could even be as soon as processing happens--the hold lifted. I'm saying let's at least say 24 hours, which I think would take into account the cheque-imaging issues, and give people some quick way to access their own money without having to turn to payday lenders because they run out of money and then get into a vicious cycle of indebtedness.

[The Vice-Chair, Liberal, Massimo Pacetti]

Ms. Ablonczy, and then Mr. Del Mastro.

[Diane Ablonczy, Conservative, Calgary Nose Hill, AB]

Mr. Chairman, I certainly appreciate my colleague's concern for the consumer, and I think it's something we all need to be aware of. But 24 hours just isn't prudent. We don't even have automatic electronic cheque-imaging yet. That's just being put into place in this act. We don't have it yet. So requiring the banks to have a 24-hour turnaround hardwired into this act would simply be extremely imprudent. I think it's just not a reasonable request.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Ms. Ablonczy.

Mr. Del Mastro.

[Dean Del Mastro, Conservative, Peterborough, ON]

Thank you, Mr. Chair.

I'd also like to comment that I think the intention of the amendment is good; however, at the present time it's not prudent. The banks do have to take a measure of security, a caution, when they're clearing cheques. They have indicated they will immediately move to seven days for cheque clearance, and then down to four.

I would suggest to the member, and to everyone, that if their constituents are in need of an immediate clearance of a cheque, they might request a bank draft for payment, as opposed to a standard personalized cheque, which clears immediately.

The other thing is that once this new regime, a four-day clearance, comes into effect, if they can actually exceed that standard, then I would think we would seek, through regulations, to further speed that process up.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Del Mastro.

Ms. Wasylycia-Leis.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Perhaps I can just get information from the finance department officials around what is the actual.... We've heard different figures, different statistics. Yesterday, Duff Conacher said that the vast majority of cheques were cleared within 24 hours. Is that the case? Would it be reasonable to say that once cheque imaging is in place that in fact this 24-hour turnaround is appropriate?

[Serge Dupont]

The provision we're talking about really deals with the maximum cheque-hold period. Indeed, in the vast majority of cases--probably 99%--cheques clear basically within 24 hours, instantly. The issue is simply this: what is the maximum hold period?

The bill purports to give the government regulatory authority to prescribe limits on maximum cheque-hold periods. At this time, the government has secured an agreement from the banks that the maximum cheque-hold period will be reduced immediately from ten to seven days, and from seven to four days when cheque imaging is implemented.

Without the regulation being invoked yet, there is a voluntary commitment to go to four days. The regulation authority will be there, so if, upon cheque-imaging implementation, there's opportunity to go further, the government may consider it at that time.

So it's the maximum hold period, not the typical hold period, that we're talking about.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Dupont, and thank you, Ms. Wasylycia-Leis.

Just on that, do you have any statistics on how long it takes to clear a cheque? Because the Canadian Payments Association wasn't in agreement with what we'd heard previously, in previous panel testimony.

[Serge Dupont]

I don't have the detailed statistics with me, Mr. Chair, but we can certainly check and see.

[The Vice-Chair, Liberal, Massimo Pacetti]

No, I don't need it now.

[Serge Dupont]

My understanding is that the vast majority—

[The Vice-Chair, Liberal, Massimo Pacetti]

Okay, that's fine.

Question on NDP-7.

(Amendment negatived) [See Minutes of Proceedings]

(Clause 34 agreed to)

[The Vice-Chair, Liberal, Massimo Pacetti]

We have a new clause proposed, new clause 34.1, in NDP-8, reference 2712095.

Ms. Wasylycia-Leis.

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

As we know, Canadians rely on banks to provide financial services needed for daily living in the 21st century. So when a bank closes....

That's what I'm doing, right, bank closures?

Yes, it is about bank closures. Sorry.

You threw me off. Would you leave me alone?

[Mike Wallace, Conservative, Burlington, ON]

Who, me?

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

Yes.

[Some hon. members]

Oh, oh!

[Judy Wasylycia-Leis, NDP, Winnipeg North, MB]

This is about information to clients of banks and to consumers in all of our neighbourhoods, trying to ensure that they're given proper notice and information about looming closures. In this clause we are simply trying to make sure that the information is available. It requires banks to share basic information about their particular plans.

I think it's a rudimentary, preliminary step that has to be taken as we build more accessible financial services at the community level.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Ms. Wasylycia-Leis.

Monsieur Thibault.

[Robert Thibault, Liberal, West Nova, NS]

Once again, I appreciate the sentiment, but I wonder how that comes with this wording:

requiring a bank to establish procedures for informing a customer or a class of customers when the bank has reason to believe that any prescribed information about the customer or class of customers that is or was in the possession of the bank may have become available to a person who is not an officer or employee of the bank;

I have a hard time making the link.