Mr. Speaker, thank you for the opportunity to once again educate the hon. member as to the many measures our government has taken to empower consumers struggling with financial products and services that are becoming more and more sophisticated. With the financial markets innovating constantly, it can be difficult for Canadians to manage the exceedingly complicated financial decisions that they must make throughout their lives. This is an issue our government takes seriously. That is why we have taken action on it.
We introduced regulations relating to credit agreements, including lines of credit and credit cards, which came into force in 2010. These regulations limit business practices that are not beneficial to consumers. These measures require the provision of clear and timely information to Canadians about credit products with a particular emphasis on credit cards. Specifically, the regulations mandate an effective 21-day interest-free grace period on all new credit card purchases when a customer pays the outstanding balance in full.
The regulations also lower interest costs by mandating allocations of payments in favour of the consumer. They allow consumers to keep better track of their personal finances by requiring express consent for credit limit increases. They limit debt collection practices that financial institutions use in contacting a consumer to collect on a debt. They provide clear information in credit contracts and application forms through a summary box that sets out key features such as interest rates and fees. They help consumers manage their credit card obligations by providing information on the time it would take to fully repay the balance if only the minimum payment is made every month. Finally, they mandate advanced disclosure of interest rate increases prior to their taking effect, even if this information had been included in the credit contract.
In addition, the regulations require that any disclosure be made by a federally regulated financial institution in a language and presented in a manner that is clear, simple and not misleading.
These measures empower and protect Canadian consumers and increase their financial literacy by providing them with the right information at the right time so they can make financial decisions that best suit their needs.
Let me also remind the hon. member that our government's policy is not to impose undue restrictions on banks but rather to ensure customer complaints are handled effectively through two key elements: an internal dispute resolution mechanism and an independent complaint handling body.
In the time remaining, let me describe very quickly how the complaint handling process works and how the two elements of the process work together.
The financial sector third-party dispute resolution currently requires consumers to first attempt to resolve the issue with the bank's internal ombudsman. Consumers have the right to request a written copy of the bank ombudsman's final decision. Should consumers want to pursue their complaint further, the dispute resolution providers operate as parallel systems to the traditional courts. However, individuals always retain the right to seek redress through the courts should they feel that the independent third-party dispute resolution body does not address the matter to their satisfaction.
The institutions are also required to disclose their specific dispute resolution process to the Financial Consumer Agency of Canada, the FCAC, and to the public. In carrying out its responsibilities, the agency ensures that federally regulated financial institutions adhere to the consumer provisions of the legislation governing financial institutions and to their commitments to the public. In addition, the FCAC assists individual consumers with inquiries about financial services and undertakes consumer education activities to help ensure that consumers are well informed.
Finally, our government believes Canadian consumers deserve accessible and effective financial services that meet the needs of consumers and operate in the public interest. We will continue to ensure their interests are well served.