Thank you, Mr. Chair.
This is a large part of the act, so I had a rather lengthy statement. I will cut it down in the interests of time.
I'm going to cover part 4, division 5 of Bill C-29, which includes proposed amendments to the Bank Act with respect to the federal financial consumer protection framework for banking, covering clauses 117 to 135 of the bill, on pages 179 to 226.
The proposed amendments modernize and enhance the consumer provisions of the Bank Act. These amendments fall into four main categories: first, consolidating and modernizing the framework under a single part or chapter of the act; second, introducing guiding principles to help banks and consumers interpret the legislation; third, implementing targeted enhancements to strengthen specific consumer provisions; and fourth and finally, affirming exclusive federal jurisdiction over consumer protection rules for banks and banking.
I will now quickly cover each of the four categories of the amendments.
The first category is consolidating and modernizing the act. The existing provisions are currently spread across the Bank Act and two dozen regulations. Existing legislative and regulatory requirements are consolidated into a new part of the act. The intent is to combine provisions together, make the rules easier to understand, and demonstrate the comprehensive nature of the framework.
This will also allow for more consistent treatment across various banking products and services. Modernizing the framework would also allow the provisions to be more flexible and better able to accommodate future changes in the sector, such as the shift to a digital economy. For example, the rules would cover disclosure through paper as well as verbal, electronic, and mobile channels to keep up with changing industry and consumer preferences.
The second category is the introduction of new guiding principles. Consumers and stakeholders have long signalled the need to make the provisions easier to follow and to communicate. The five code-like principles align or map to each of the five elements of the legislation as structured. They are as follows.
First, basic banking services should be accessible. Second, disclosure should enable an institution's customers and the public to make informed financial decisions. Third, a bank's customers and the public should be treated fairly. Fourth, complaints processes should be impartial, transparent, and responsive. Fifth, a bank should act responsibly, considering its customers and the public as well as the efficiency of its business operations.
The third category consists of specific amendments to strengthen consumer protection in banking. These elements are categorized along the lines of access, business practices, disclosure, complaints, and accountability. I will cover only the new specific revisions, in the interests of time.
The new enhancements strengthen the rules by allowing consumers to choose from a more flexible list of personal identification documents regarding opening of accounts. Two pieces of identification will be required to open an account or to cash a government cheque. The new provisions will make it easier for Canadians to open basic deposit accounts, cash cheques, and use more available identification documents.
There are existing rules around business practices. There are several that I won't go into at length, but the new enhancements strengthen these by, for example, expanding the provision to capture undue pressure; clearly prohibiting banks from applying such pressure or coercing a person for any purpose; specifying that advertisements must be accurate, clear, and not misleading; and adding new cancellation periods for a wider range of products and services.
For example, cancellation periods would now apply to all deposits in savings accounts and, with a few exceptions, credit products. By and large, if consumers obtained a product in person or through a website, they would have three business days to cancel free of charge. For products obtained via telephone or mail, that cancellation period is 14 business days now.
Regarding disclosure, the new enhancements make disclosure more flexible and more consistent across a range of products and services. For example, the use of summary information boxes, which consumers have found useful, will be broadened across more bank products and services, such as deposit and savings accounts. Summary information boxes highlight key information about a product for customers in language they can understand to help them make choices that are right for them.
Regarding complaints handling, the existing consumer provisions set out a dedicated complaints handling system that is timely, efficient, and free for customers. The new enhancements would strengthen this by requiring banks and external complaints bodies to report on the nature of consumer complaints.
Enhanced reporting on complaints would provide greater transparency to the public and policy makers on consumers' concerns, becoming more important as this complex industry evolves. In turn, banks would have an even stronger incentive to focus and address those areas that would generate complaints. Banks and external complaint bodies now have to report on the number of complaints, and in the future they will have to expand that to deal with the nature of complaints as well.
Regarding corporate governance and accountability, new enhancements are proposed in these areas. A board of directors would be required to oversee a bank's operational procedures, put in place by management, to comply with all consumer provisions of the act. Banks would also have to report on what they do to address the challenges faced by vulnerable Canadians: consumers facing accessibility, linguistic, or literacy challenges.
Fourth and finally, Mr. Chair, is the category of amendments. In the affirmation, the Bank Act sets out a comprehensive and exclusive regime in relation to banks' dealings with customers and the public. These amendments are proposed to clarify the scope of federal jurisdiction. Amendments to the preamble to the act are to ensure consistency with the new part, a new purpose clause states the objective of exclusive federal regulation, and a new paramountcy clause expresses the intent that the new part be paramount to provincial consumer protection laws and regulations.
Together these proposed amendments will provide that the Bank Act is the exclusive set of rules that protects consumers when they deal with their banks. This is intended for consumers to have clear, comprehensive, and uniform protections when dealing with their banks, no matter where they live, work, or travel in the country.
An exclusive federal regime would be intended to avoid the overlap of federal and provincial laws, which can be confusing and not in the consumer's interest. It would create clear rules that Canadians can follow and to which the government can hold banks accountable.
I'm done.