I would to love to do that too, but I would like you to give me some assurances that you'll pass my amendment. Then we can look at all of these things in this study on open banking. It would also give consideration to looking at the mortgage stress test, Mr. Sorbara. I would really love to be able to do that. Other jurisdictions have done it. We have the United Kingdom that we're identifying as the one we want to compare ourselves to. I would love to look at it. I want assurances that we will look at all of these points. I think they are all important to take into consideration.
If my amendment were passed with the main motion, I would be happy to vote with it. I'm at the mercy of the government caucus here, on whether they will vote for my motion, to make Mr. Sorbara's motion more fulsome and complete. I would also like serious consideration to be given to doing that study on the mortgage stress test that we have looked at. I think those are all important issues. They are worthy of consideration. I really want us to look at them.
Moving on to g)—how open banking could impact the process of applying for a loan or mortgage, and why such processes ought to be improved in Canada—I'm so glad that Mr. Sorbara interrupted me, because it allows me to talk a bit about the mortgage stress test and how OSFI rules apply. It was a friendly interruption.
I would really like to know how the members of the government caucus perceive the applications for loans and mortgages. A lot of banks have moved towards having field mortgage specialists, and a diffuse way of delivering the service. It still requires you, time and time again, to meet with someone else, so they can confirm your identity and you can sign in person.
A lot of those requirements are in the Bank Act. Without looking at legislative changes, I don't see how we could say “yes” to open banking, and then not look at how loan and mortgage origination happens in the real world—how people obtain mortgages and loans. They still require you to go and sign documents and see someone. A lot of those things can now be sent back and forth by PDF, but there are requirements in the banking act for you to actually be there in person. A lot of times, the banks have rules that tell them, “No, we want the person to come in.” You can do a lot of the application online, but they still want to physically see you.
That is not the case for credit cards, for instance. You can just apply online, and oftentimes, a T4 is sufficient, or they just want to see your gross income and have your basic information. Then they check with the credit bureau to see your creditworthiness. They have a lot of information on you there already.
I wonder how many times Canadians have considered what TransUnion or Equifax and others have on them. I've actually gone through the experience of asking for a credit report. I saw things there that I never wanted to be shared with a credit-card company. I didn't even know what was being logged, or that information was accumulating.
The Australian experience is that they don't have current account balances on their credit checks, for instance. What I've been told is that you can see the total amount that you are allowed to borrow on a line of credit, HELOC or credit card. They can't see your current balance.
In Canada, they can see your last balance. It's not perfectly up to date. Is that something that would change in open banking? Is that something that we're actually considering, that during the process of getting a loan, credit card or mortgage, your regulated bank or lender could see your immediate balances, as of the exact day you're asking for it? Would there be a clickable option in your application where they could take all of your information to make an assessment on whether you're a worthy borrower or not?
If that is what we're talking about, I think it needs a broader conversation about the process of application. How much personal information is perhaps too much? Is there something in between that we could do? What will happen with this open banking study if we say, “Go ahead, the Government of Canada is already going ahead with it. It's a great thing. It's good for consumers. It's good for those who want to control their own financial future and financial information”? What will the behaviour impact be on the lenders themselves, at the very granular, local, micro level? Will they then introduce very broad rules that say, “No, you will have to provide us with your current account balance, on all your accounts, before we'll agree to lend to you”?
Maybe we would consider a legislative framework, and stops that say, “No, that's actually too much private information. You can't just request or demand all of that type of information.” Where is the fine line that we're trying to meet?
I am concerned about loans and mortgages. You can go online right now and find lenders, and it is not clear whether they are a regulated lender or not, whether they are based in Canada or not.
You saw it in the experience of Iceland and some of these kinds of open banks that collapsed in the 2008-09 banking crisis. In those cases, there were no physical branches. The Government of Iceland could not say that it was going to seize assets to make sure that the people who have accounts would be paid back.
In those situations, what happens if you obtain a loan with a mortgage lender and that mortgage lender then begins to share it with other financial institutions? What if there is a requirement for you to do that? On this B-20 stress test, we've seen oftentimes...and you've heard me mention this OSFI rule on cybersecurity and the types of financial information they are now requiring
So now you have a situation where we could be empowering them even more. Is that the thought, that we provide for more open banking, more sharing of data, but it empowers the regulator to have even more influence, more directives that they will send to the banks, or these guideline documents that they pretend are not directives but they actually are? Is that the focus? I think that's a worthy area for us to look at.
It's all about that application process. People want it to be easy to apply for credit. At the same time, I think it's incumbent upon us to make sure that the rules for obtaining that credit, for obtaining the loan, the home equity line of credit, the mortgage, are structured in such a way that protect consumers from financial institutions that might just be doing mass data collection to perhaps improve their algorithms, the artificial intelligence software that they're running. That's a concern to me.
I think my amendment g) is a good one. It would make us look at those two things. It would make us go and find that information from financial institutions that are regulated. It would be a way for us to perhaps also offer up suggestions, again on those legislative amendments that I keep talking about, which would be beneficial to the Canadian consumer and the Canadian market.
It's worthy of study—specifically this point—because of the way that OSFI has treated Canadians. It has basically directed regulated lenders on the B-20 stress test, which is a one-size-fits-all rule.
I hope that for open banking, we don't do a one-size-fits-all rule that applies to all financial institutions, that it's perhaps a rule that's created for the big chartered banks, that makes it easy for them, since they have the people power to do it, while smaller financial institutions like the credit unions that want to compete.... And we have Meridian, which is trying to compete in this space, trying to gain clients, trying to gain market share.
Would we, in pursuing open banking then, not make some allocation for smaller financial institutions to be able to compete on an even basis for those loans, the credit applications, the mortgage origination? We've seen how much potential foreign investment could be brought to Canada. Is that the type of foreign investment we would want?
One of my points here is about the investment that other foreign jurisdictions could have, but I hope we don't mean state-owned enterprise from other countries that could invest in our banking sector. I mean by that, large financial institutions in the European market, from the United Kingdom, the American system, that could be wanting to participate.
I really think there's an opportunity here to make sure we direct this through our findings and say that with any type of banking that's open banking, the regulator has to consider the size of the institutions it is trying to regulate. It has to consider the interaction that the customer will have—the customer experience—like dividing it into two.... I think that directing any government regulator when making rules to consider its impact on those it regulates is perfectly reasonable, because then it would force them to consider smaller institutions.
I can't see how that would not be a gain. That would go back to that consumer protection point in the original motion. It would also I think address financial stability, which is always a point of consideration when we are making any type of adjustments to our banking system.
I'm going to move on to my next point here, which is:
how open banking should be prioritized for the current government, considering the Minister of Finance's mandate letter that was given to him by the Prime Minister in 2015 and the various priorities that were outlined for the Minister in this letter;
I have the mandate letter before me. I'm not going to read it into the record, just as I won't read the Magna Carta into the record.