Thank you, Mr. Chair, and thank you for having us here today.
The banking industry has long been a leader in privacy protection. Given the nature of the services that banks provide to millions of customers in communities across Canada, banks are trusted custodians of significant amounts of personal information. Privacy and protection of clients' information is a cornerstone of banking. Banks take very seriously their responsibility to protect customers' information and are committed to meeting not only the requirements of privacy laws, but also the expectations of our customers.
We are pleased to have this opportunity to voice our support for the many provisions in this legislation, including the new breach notification and the financial abuse provisions. We are concerned that amendments to eliminate investigative bodies will create uncertainty and may significantly limit the type of information that banks currently share to prevent criminal and terrorist activity.
The banking industry supports the requirements in the digital privacy act for organizations to notify individuals about a breach of their personal information where there is a risk of significant harm. ln fact banks already notify clients in the rare instances of such a breach so that individuals can protect themselves from fraud or any other misuse of their personal information. We are in favour of reporting material breaches to the Privacy Commissioner. We also support the commissioner's new oversight powers to ensure that organizations comply with these new provisions.
We look forward to working with the government on guidance and regulations to set out the details of how these provisions will be implemented, thereby providing an effective framework to ensure that Canadians are notified in a timely manner. lt is important for all stakeholders to work together to protect the personal information of individual Canadians, and Bill S-4 effectively creates a framework for this to happen.
The CBA has long advocated for amendments that will help seniors and vulnerable Canadians from becoming victims of financial abuse. We applaud the government for including an important amendment in Bill S-4 that would allow banks to notify a family member or authorized representative in suspected cases of financial abuse. When bank employees see situations in the branch that suggest potential financial abuse, it is the customer's savings that are at risk, and bank staff want to be able to help them to avoid financial abuse.
At present PIPEDA only allows a bank to report suspected cases of financial abuse to a government institution, such as the police or the public guardian and trustee, and only where there are reasonable grounds to believe that a law has been contravened. The suspicious behaviour that bank staff may witness may not necessarily suggest that a law has been broken. lt can still be a case of financial abuse and yet banks are constrained in what they can do to help their clients. Even when banks suspect unlawful behaviour, and are able to report the suspected abuse, they are often told that police or the public guardian and trustee do not have sufficient resources, or sometimes even the mandate, to undertake an investigation on financial abuse.
Our support for this provision is guided by the best interest of our customers, particularly groups most susceptible to financial abuse such as seniors. Banks want to ensure that their staff have the ability to protect their customers from financial abuse, and this provision is an important tool in this regard.
While we are supportive of the majority of the provisions in Bill S-4, we are concerned that some of the proposed amendments may hinder the ability of banks to protect our customers, our employees, our communities, and the financial sector from crime.
Current regulations under PIPEDA contain a list of designated investigative bodies through which organizations can share personal information under conditions set out in the act. The CBA's bank crime prevention and investigation office, or BCPIO, was among the first investigative bodies approved by the government, and it has been in operation for almost 15 years. The BCPIO's information-sharing policies and procedures across organizational boundaries are clearly understood by Canadian banks, along with other participating financial institutions. lt is this formal relationship that allows banks to detect, prevent, and suppress criminal activity such as theft of data and personal information, criminal breach of trust, proceeds of crime, money laundering, terrorist financing, cybercrime, bank robberies, and physical attacks on critical infrastructure.
The bill proposes to replace designated investigative bodies with a framework for the disclosing and sharing of personal information among organizations. ln our view, the new provisions, particularly the wording of proposed provision 7.(3)(d.2), may not allow banks the same scope as the investigative bodies to detect, prevent, and suppress the full range of criminal activities. ln particular, we are concerned that the proposed change limits disclosure to circumstances where it is “reasonable for the purposes of detecting or suppressing fraud or of preventing fraud”. Many of the criminal activities I listed earlier are just not captured by the term “fraud”.
If these provisions are passed in their current form, we believe the ability of the banks to protect the financial system and our customers from criminal activity may be severely hampered.
We ask the committee to consider amending the bill to allow approved investigative bodies such as the BCPIO to continue with their important work. Alternatively, if the committee wishes to maintain the proposed approach in Bill S-4, we recommend that the legislation be amended to ensure financial institutions can share the information needed to detect and prevent other types of serious criminal activity beyond fraud.
ln closing, we want to reiterate the banking industry's support for many aspects of Bill S-4 and ask the committee to consider amending the bill to help protect Canadians from financial crimes.
We would be pleased to answer your questions.