Good day, Mr. Chair.
Thank you for having invited the Financial Consumer Agency of Canada to appear before the Finance Committee today.
I am accompanied by my colleague Lucie M. Tedesco.
While the role of my agency is limited with respect to the specific nature of the present study, it's my belief that the overall effect of our work produces very real and widespread benefits for individuals and the Canadian financial sector in general.
The agency has two principal roles. First, we promote and ensure compliance by federally regulated financial institutions with the consumer provisions in their legislation.
The agency is also charged with a consumer education role. Through its consumer education mandate, FCAC provides objective and timely information to help Canadians understand and shop around for day-to-day financial products and services.
It is worth nothing that the compliance and consumer education roles of FCAC's mandate are inextricably linked. They support and complement each other. In essence, the consumer provisions provide consumers with detailed disclosure about the product or service they wish to procure. Our education role is aimed at ensuring that they have the knowledge and confidence to make informed use of that disclosure.
We do not, however, have a role to play in the setting of interest rates or service fees, so we try to help consumers by providing them with objective financial information and education. Financial products such as credit cards and bank accounts are an indispensable part of everyday life.
From our surveys we have learned that many Canadians are not using their financial products to their best advantage. To take the example of credit cards, many consumers are not using them as a method of payment as they should be used, but instead are relying on them to borrow money. That is an extremely costly way of borrowing. Through our consumer education publications we inform consumers about the advantages and disadvantages of different financial products and services, explain the costs and other features, and provide them with alternatives to consider.
Through our website, we offer interactive tools that allow consumers to quickly and easily compare the different options available to them for credit cards, banking packages, savings accounts and mortgages. We regularly update these tools to ensure that consumers have access to accurate and timely information. Our credit card selector tool, for instance, allows users to compare more than 200 credit cards to find the best product for their needs.
But beyond information on financial products and services, we promote broader financial education. We have directed our initial efforts at young Canadians. We believe that early exposure to financial skills will serve people well throughout their lives. With the British Columbia Securities Commission we launched a new course last fall called “The City: A Financial Life Skills Resource”, aimed specifically at the learning needs of 15- to 18-year-olds. We're excited about the program because it is designed to give all young Canadians a solid foundation of basic financial acumen. There are no shortcuts or magic solutions to elevating money smarts. It is a long road, but I believe we can make headway through initiatives such as “The City”.
All interested parties and governments at various levels, working together with private and voluntary sectors will achieve the greatest impact and make a lasting, meaningful improvement in financial knowledge and the financial future of the greatest number of Canadians.
I would like to speak to an important compliance initiative that we have undertaken recently to benefit consumers. Over the past year, we have initiated a process to review and modernize our Compliance Framework, which sets the guiding principles for our supervisory work. We intend to implement a compliance approach that builds upon and broadens our current complaints-focused compliance framework, which has been in place since 2002. Our modernized framework will seek to actively promote compliance in the marketplace through a risk-based oversight approach. This approach will permit us to better identify compliance risk areas in the marketplace and address potential market conduct compliance issues more effectively and in a more timely manner. While such an approach to compliance will be new for FCAC, similar approaches have been implemented effectively by other regulators in Canada and abroad. Our discussions with these regulators have highlighted the benefits of such an approach which we believe will lead to a more responsive framework to the benefit of all stakeholders.
I would like to thank you for the opportunity to appear before the committee. I look forward to answering any questions you may have.