Mr. Speaker, it is an honour to once again rise and speak to this bill.
It was just over one month ago that I stood in this House to speak to this bill. In my speech, I warned the government that the biggest failure of this bill was in fact what was omitted, specifically a provision to ensure that banks were mandated to participate in the Ombudsman for Banking Services and Investments dispute resolution mechanism.
There has been a lot of talk on this side about the consumer protection plan. Avoiding and ignoring this piece completely leaves consumers in the cold. The Conservatives talk about the voluntary code, but they have done nothing to address the online or e-commerce need for the voluntary code. They talk about what they have been doing on credit card interest rates. However, making the font bigger on a bill does nothing to help the consumers. What it does is it lets them know how long it is going to take to pay it off. The Conservatives are doing nothing to actually support consumers with this. It is mind-boggling how they can say one thing and do another.
Two weeks ago today, I participated in a finance committee hearing on this bill. Witnesses from Option consommateurs and the Canadian Community Reinvestment Coalition echoed the testimony of Doug Melville, ombudsman and chief executive officer of OBSI, that the economic regulatory system that Canadians rely on has been negatively affected by the government turning a blind eye to banks leaving the OBSI system.
In his opening statement, Jean-François Vinet from Option consommateurs said:
Option consommateurs is highly preoccupied with what Mr. Douglas Melville mentioned earlier—that the banks not only choose but pay for the dispute resolution business that tries to resolve the complaints that consumers send against them. The lack of independence of such a structure, and the conflict of interest between banks and the business hired to resolve disputes against them by consumers, doesn't guarantee consumer protection in Canada and access to a neutral party.
He went on to say:
We're asking the government that all financial institutions that are federally regulated be obligated to offer OBSI for complaint resolution by consumers.
That's our key message. We hope government will understand this, and that it is common sense.
Unfortunately, sometimes there does not seem to be common sense coming from that side of the House.
Tyler Sommers from Canadian Community Reinvestment Coalition recommended that the government “ensure that all federally regulated banks are required to use the Ombudsman for Banking Services and Investments to ensure consistency and independence in the resolution of customer complaints”.
What was the government's response in what was meant to be a systematic review of legislation governing the banking system? The Parliamentary Secretary to the Minister of Finance complained that the witnesses were addressing issues that had been missed by the legislative review. Apparently the government did not want to hear how to further improve the banking system. It only wanted to hear witnesses tell the committee what a wonderful job it had done.
The problem is that is not true. Unfortunately, due to the government's decision to make the system review a technical bill with a very narrow scope, the government stopped parliamentarians from bringing forward the amendments required to make this bill the type of banking review that will help consumers, help small businesses and help the economy as a whole.
Today, business sections in some of Canada's top media outlets are reporting that OBSI's board of directors has approved a scenario for winding down operations if the government continues to allow banks to opt out of the OBSI system. The board is worried that its credibility as an independent ombudsman is being undermined by banks leaving the OBSI system if they disagree with OBSI decisions. The closure of OBSI's banking arm would be dreadful for consumers and for small businesses in this country.
The problem with allowing banks to choose their own firms to manage dispute resolution is that the banks become the firm's customers. As the old adage goes, for any business to thrive, the customer is always right. How can consumers trust any decision made by a private firm when they know that the bank is the one writing the paycheques?
As Mr. Melville very eloquently put it when he appeared before the committee:
A service hired by the bank and that consequently has the bank as a client creates the perception, if not the reality, of a loss of that critical independence on which we function. The service will know whom it is they need to please in order to keep the business, and it's not the individual making the complaint. It's a clear conflict of interest.
The problem with the government not addressing the issue of the banks leaving OBSI is that this is entirely a problem of its own making. In budget 2010, the government announced that the banks would be required to be a member of an approved third party dispute resolution mechanism, but it did not explicitly state that it must be OBSI. As such, both RBC and TD took this as a carte blanche to pull out of the OBSI system and move to a private dispute resolution system. Without the appropriate regulations or legislation being brought forward by the government, both the banks and OBSI have been in regulatory limbo for the last two years.
The government has had many suitable opportunities to bring forward the required changes, most notably during the financial review that we are currently debating. Now is the time for the government to own up to its mistake and make the OBSI participation mandatory.
Customers at TD and RBC are already paying the price. These customers are being turned away from the new private dispute resolution provider. They are being told their complaint is not within the firm's mandate. They are being discouraged from making their complaint or their complaints are simply not properly followed up.
If OBSI is to shut its doors to banking complaints, all bank customers in Canada will be subject to this level of misinformation and diversionary tactics in order to ensure the happiness of the private dispute resolution provider's customers. Guess who they are? They are the banks.
The irony, of course, is this. Where do Canadians who have complaints with TD and RBC turn to for help with bringing their concerns forward? It is to OBSI.
Unfortunately, I will be supporting this bill, as it needs to be passed by April 20 in order to ensure compliance with the Bank Act and to ensure we do not add increasing insecurity to the economic and financial markets within Canada. However, it is with a heavy heart that I will be supporting this bill, not because of what is in it but because of what could have been. This bill is truly a missed opportunity.
In closing I would like to repeat the words of Mr. Melville in his opening statement before the finance committee:
Should banks be permitted to choose their own provider of dispute resolution, in essence to hire and pay for the organization that will judge and rule on their market conduct? I ask you this. If the banks were given the choice of being regulated by the Department of Finance, or some private for-profit body of their own choosing, whom do you think they would choose?
It is very obvious.
The government has a role in ensuring the stability of the financial systems. The only way to ensure the stability of the banking sector is by increasing consumer and small business confidence, which was shaken by the financial crisis. If consumers and small businesses do not believe they have access to an impartial ombudsman if they have a complaint with their bank, there will be no way to guarantee their confidence. The government needs to act now to ensure this is not the case.
With that, I look forward to answering questions.