Madam Speaker, before I deal with my three amendments I want to say publicly in the House that I support the position of the credit unions in terms of amending the legislation to make it easier for them to establish a national financial institution.
I moved a similar amendment in committee and it was turned down. We had the support of all four opposition parties: the Alliance, the Conservatives, the Bloc and me for the New Democrats. We had a recorded vote in the committee. Interestingly enough all the Liberals voted against the particular amendment asked for by Bill Knight, the CEO of Credit Union Central of Canada. The credit union made its position very well known to the government, to the members of the committee and to the House of Commons. It wants an equal and level playing field with the banks.
The reason it needs this kind of amendment is that there is a different culture in the credit union. It is one of a co-operative where one entity does not own another entity, which is the case with other financial institutions. In the credit union there is one member, one vote. It is truly a democratic structure.
Without an amendment to that effect it will make it very difficult for the credit unions to establish a national credit union system where people can go with their bank cards from one province to another and still do their financial transactions with the Credit Union Central of Canada. I indicate our support for the amendment in that regard, which is part of this group as well.
I have three specific amendments before the House today in this grouping. One of them I referred to earlier in general in the last round of debate: the changing of the penalties for the Financial Consumer Agency of Canada. Under the agency there will be all kinds of power, regulations and activities it can do, but when it comes to penalties, the maximum penalty for an individual who is in violation of the act is $50,000 and for a financial institution it is $100,000.
Financial institutions are very large. Some of them have revenues in excess of $10 billion a year. Some of our banks are extremely large. I am suggesting in our amendment that we move the penalty for financial institutions from $100,000 to $500,000. The reason is that it makes the penalty more real, more meaningful for very large financial institutions than just a penalty of $100,000. It is more in accordance with the size of their assets and the kinds of business they do.
Our banks are doing very well. If we look at their balance sheets and their retained earnings and profits in the last few years, we see that they have gone up in many ways in an astronomical sense. I am thinking of Royal Bank, TD Bank, Scotiabank and Bank of Montreal, which is having a few more problems but is still doing very well. All the big six banks are doing very well as we speak. I think a penalty that is more a reflection of their size would be $500,000 rather than $100,000.
The second amendment I am proposing is found in Motion No. 10. It is to set up a no frill bank account and to have a charge for that of $3 a month. I am very interested in hearing what the parliamentary secretary has to say about this point. I am ashamed to say that I have moved what is almost a Liberal amendment today.
If we look at the government white paper in June 1999 it said that there should be a no frills account established for 12 transactions for a fee of $3 to $4 a month. In the bill itself the government dropped the idea of having a no frill account for $3 a month. What I am doing is moving a Liberal amendment, saying that there should be a no frill account and that the maximum charge should be $3 a month.
Why are we doing this? We are doing this because many low income people have difficulty with the cost of bank transactions today. In my riding of Regina—Qu'Appelle I represent most of the inner city in Regina. The poverty rate is extremely high. Many people are on welfare. Many are earning minimum wage. Many are struggling to make ends meet and have difficulty with bank service charges.
Some banks have on a voluntary basis been introducing special accounts with lower charges, but many people still find these charges to be very steep and very excessive. We should have legislation which says that there should be a minimum number of charges for each and every Canadian, rich or poor, and that the maximum charge for such an account should be $3 a month.
What is wrong with that? Our banks are making a lot of money. Our banks are also making a lot of money on the poor people. We do not have, as has the United States, a community reinvestment act that forces banks to invest a certain amount of money in the communities they take their money from. We do not have many of those kinds of regulations. It is not onerous for a bank to be asked to establish a no frills account for low income people.
I know my good friend from Souris—Moose Mountain, who represents the neighbouring riding to mine in southern Saskatchewan, certainly supports the idea as well. He also has a number of low income people in his riding, a number of aboriginal people in his riding who would certainly be in support of establishing this kind of an account.
It speaks to equality, to a more egalitarian society and to the common good. It speaks to opening up financial institutions to every Canadian, regardless of the size of his or her pocketbook. It speaks to what parliament should speak to: improving the common good.
I am very anxious to hear what the parliamentary secretary will say on behalf of the government about this issue. I remind him once again that it is really a Liberal amendment. It was taken out of the government's white paper of June 1999 when it suggested a no frills account to the tune of some $3 per month.
The third amendment in my name is in Motion No. 11 which provides for an amendment to the Bank Act to ensure that branches could only be closed for reasons of non-profitability.
Today banks will often close branches even though they are profitable, which leaves many communities without banking services. What I am saying in this motion is that if a bank branch is profitable it should not be closed down. If it is not profitable, then it should have the right to pull out of a particular community.
We have had some interesting things happening on the prairies. In the last year the Bank of Montreal sold a number of its branches to credit unions in Saskatchewan, Manitoba and Alberta. I have a couple of examples in my own riding of Regina—Qu'Appelle where the credit union has taken over some branches from the Bank of Montreal. The Bank of Montreal in this case has made an accommodation with the credit union movement to provide a very important service to a particular community. I have seen in a couple of communities in my riding where people appreciate that the service is there. They do not have to drive an extra 20 or 30 miles to another town to be provided with banking services.
This again speaks to fairness and equality. Coming from rural Canada, it probably speaks to the fact that rural Canadians should not be discriminated against in terms of banking services. If the banking service is profitable, if the branch has made money over the years by providing loans to farmers, to the small business community and to consumers in a small town, it should not be able to close down that branch. We think that should be part of the legislation before the House today.
It is not only rural Canada. In parts of urban Canada, the parts of inner cities where there is a lot of poverty, often a branch will pull out even though it might be profitable but not as profitable as it might be in a wealthier suburb.
One could go on at length in terms of what should be said here. However I refer interested members to a presentation that was made to our committee by the Public Interest Advocacy Centre when it spoke about the accountability of banks, branch closings, and the services that should be provided to Canadians and the community at large.
Once again I commend these amendments to the House. They are straightforward. In particular, I look forward to the response from the parliamentary secretary when he talks about the $3 a month bank account for consumers. I am also interested in seeing what his reactions are to the suggestion of making amendments for the credit union movement.
I have not seen his briefing notes, but he will say that the government will try to accommodate credit unions through regulation. In other words, he is asking us to trust him, trust the government, trust the minister and trust the bureaucrats. Even the minister responsible for sport will be cynical about some of that. The parliamentary secretary will say that they will bring in the proper regulations so that the credit unions will be on a level playing field with the banks.
The credit union movement is saying that is not good enough. The Credit Union Central of Canada has said that. Various centrals across the country, such as the Van City Credit Union in British Columbia, have also said that. They want an amendment to the legislation.
If we do not do that in this House, I predict they will go to the other house and lobby senators to make the change. It will be sent back to the House of Commons and we will be debating this piece of legislation and amendment in a few weeks' time.