Mr. Speaker, it is great to be back in the House after our Christmas recess and to be able to address and speak with my colleagues.
Just last week in Davos, the Prime Minister was singing the praises of Canada's system of banking regulation. Ironically, this comes at the same time as the government is all too happy to watch an important cornerstone of Canada's regulatory regime weaken due to the failure of the government to force banks to utilize the dispute resolution mechanism of the Ombudsman for Banking Services and Investments.
In October last year, TD followed RBC's lead in opting out of the OBSI dispute resolution mechanism and instead moved to using a private law firm hand-picked by the bank to resolve complaints that could not be fixed by the in-house resolution system.
The government spins this decision to let banks leave OBSI and deal with disputes through private firms as allowing choice in the marketplace. Choice for who? It is clear it is not investors, consumers or small businesses. These groups are stuck with the dispute resolution mechanism chosen for them by the banks. In fact, it is impossible to find members of those communities who support the government's position.
The Canadian Foundation for Advancement of Investor Rights sent an open letter to the Minister of Finance calling on the government to make the use of OBSI for dispute resolution mandatory saying that:
One single dispute resolution service provider is necessary in order to avoid fragmentation, inconsistencies, serious potential conflicts of interest, complainant (client) confusion and enable the detection of systemic or widespread issues.
The Consumers Council of Canada says that the withdrawal of TD and RBC from the banking side of OBSI:
--threatens the health of the system of dispute resolution and redress that has distinguished Canada during the current period of global economic disorder.
Instead of protecting their customers, the choice that the government is championing is for the banks, and when the banks are confronted with the choice between a comprehensive dispute resolution mechanism or a Bay Street law firm that is more interested in keeping the banks business than in protecting consumers and small businesses, who will it choose?
In October of last year, the same month as TD was allowed to walk away from OBSI, Canada signed a G20 accord on handling banking complaints which stated:
Recourse to an independent redress process should be available to address complaints that are not efficiently resolved via the financial services providers and authorized agents internal dispute resolution mechanisms.
How can the current process be independent if the banks get to choose who hears customers' complaints? Regulation should not be administered by Bay Street law firms on an issue that is as fundamental to the proper functioning of the economy as the banking sector. Consumers and small businesses will never be able to believe that their complaints will be properly addressed if the banks are stacking the odds in their own favour.
It is time for the government to match its words on banking regulation with action. The global economic recovery will rely on consumers and small businesses having confidence in the economy and the banking sector more generally. In order to ensure confidence in the banking sector, small businesses and consumers must have access to a single, independent dispute resolution service like OBSI.