Mr. Speaker, it was a few months ago when I started asking the Minister of Finance what the government was doing to protect consumers from credit card gouging.
Last Friday, the government finally announced its plan but it fell well short of what is needed. Canadians were hoping for real measures that would cap sky-rocketing interest rates and stop the outrageous fees and penalties paid by consumers and merchants alike.
What Canadians got were half-measures on credit cards, half-measures that will offer no interest relief to working families that are struggling to make it through this economic recession, and half-measures that in the past have proved to be ineffective, such as financial literacy campaigns.
Only a few weeks ago, Saul Schwartz, a leading economist, revealed that there is no strong evidence financial literacy programs make any difference. The economist went on to say that the impact is limited and literacy programs represent a cynical attempt by financial service providers to avoid direct regulation.
It seems as though financial institutions have the last word when it comes to drafting government policy. This is bad news for Canadians who were hoping for much more on this credit card issue from the government. These half-measures fall well short of those that I put forward a month ago, measures that have the support of a majority of this House.
The measures I introduced are modelled on those that were recently passed by legislators in the United States. The act that was passed by our southern neighbours includes a clause that would stop arbitrary credit card rate increases, or any time, any reason interest rate hikes.
I have numerous examples of average Canadians, Canadians who work hard and pay their bills on time being hit with sky-rocketing interest rates. One individual showed me his bill. His interest rate jumped from 18% to over 25% because he made his payment two days late. It does not end there. I have emails from parents who are concerned about their 17 year old who was targeted by a credit card company and has a $1,000 limit that is now maxed out, and that they are responsible for.
There are no clear guidelines and no transparency from the credit card companies. That is what we need.
It seems the government still does not understand what needs to be done. It would rather take its cues from the big banks and the Canadian Bankers Association.
This past Sunday on Rex Murphy's program, Cross Country Checkup, the president and CEO of the CBA echoed the government's response when he was asked what was being done for consumers last month. Nancy Hughes Anthony said that consumers should shop around for the best interest rate.
I think Ms. Hughes and the government need to come to terms with the fact that low interest rate cards should be offered by all banks and financial institutions.
The New Democrats have a plan to stop credit card gouging. The motion passed last month includes measures to stop abusive fees and penalties, and the any time, any reason interest rate increases and account changes.
The reality is that having a large box on the bill or increasing the font size on credit card contracts does not help Canadian families who are hurting right now. It is time the government took bold action and listened to the will of Parliament instead of the will of the Canadian Bankers Association.