Thank you very much for that introduction, Mr. Chair.
I would like to thank the committee for inviting us here today.
With me is Mr. Frank Lofranco, assistant commissioner responsible for oversight and enforcement at FCAC, the Financial Consumer Agency of Canada.
For those less familiar with our mandate, FCAC is an independent federal agency that was established in 2001 to protect the rights and interests of consumers of financial products and services.
We work in close collaboration with our federal partners, including the Office of the Superintendent of Financial Institutions, the Canada Deposit Insurance Corporation, the Bank of Canada and the Department of Finance. We coordinate our activities on matters relating to financial stability, systemic vulnerabilities and the supervision of federally regulated financial institutions.
FCAC carries out our mandate in two principal ways. First, as a regulator, we supervise the compliance of federally regulated financial entities—primarily banks—with consumer protection measures that are set out in legislation, public commitments and codes of conduct. Second, FCAC is mandated to strengthen the financial literacy of Canadians. We do this in various ways, including by educating Canadians about their rights and responsibilities when dealing with financial institutions. We also conduct research and monitor trends on emerging issues that affect financial consumers.
We welcome this opportunity to engage with the committee on our work in relation to the important topic of housing finance. The impact of housing costs on household finances and the vulnerability of mortgage holders in today's environment are issues that we're keenly aware of and relate to both sides of our mandate.
Unfortunately, when we were invited to appear last fall, we misunderstood that your focus was on housing pricing and availability. We now understand that the scope of your study encompasses areas that converge with our mandate, so we're particularly happy that you invited us back.
Before responding to questions, I'd just like to highlight a couple of areas of our work related to housing finances.
On the regulatory side, the consumer protection measures we oversee apply to a wide range of products and services, including residential mortgages that are offered by banks. These measures were strengthened in 2022, when the financial consumer protection framework regulations came into force. The new framework reflects a focus on outcomes, and it puts more onus on the industry to responsibly manage how and what they sell to consumers and how they respond when disputes occur.
One example of the framework in action is the “Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances”, which FCAC issued last July. We call it the “mortgage guideline” for short. Guidelines are a supervision tool that provide industry with clarity regarding FCAC's expectations for how they should comply with their regulatory obligations.
Specifically, this guideline sets out our expectation that in response to the current exceptional economic circumstances, financial institutions will adopt fair and consistent approaches when they offer relief measures to consumers who are at risk of defaulting on the mortgage on their principal residence. Importantly, the guideline is based on best practices in financial consumer protection and centred around the principles of fairness, appropriateness and accessibility, which are also reflected in the new framework. FCAC's guideline was informed by our internal research, and this demonstrates how the two sides of our mandate work together.
Since 2020, we've been conducting a monthly survey to track the financial well-being of Canadians. There is an abundance of great information in this data. We release it publicly, and we share the datasets with other researchers. We have added questions relating to housing finance in response to the challenges of the current environment. A key finding that drew our strong attention at the end of last year was that homeowners with a mortgage have been increasingly at risk of experiencing financial hardships, demonstrated by having to borrow for daily expenses or draw on savings. It was in response to these findings that FCAC acted and issued its mortgage guideline.
In addition, we continue to increase our educational efforts. We've developed new information relating to the mortgage relief measures and how consumers can make informed decisions. The theme of last November's Financial Literacy Month was focused on managing debt. FCAC recently launched a national, multimedia advertising campaign to promote FCAC's tools and resources related to renting or buying a home and choosing, renewing and paying for a mortgage.
That concludes my opening remarks. Thank you.