Mr. Speaker, I am pleased to rise to speak to Bill C-419, an act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act. My colleagues may not know this, but I have studied the issue of credit cards extensively. Today's subject definitely interests me.
I would like to point out that many of the measures included in the bill before us today already appear in the budget implementation act. However, since this is very serious subject, a lot of consultation with the provinces and territories is needed.
As I said, certain specific measures are already included as part of the consumer protection measures in the Bank Act, as they were introduced as part of the package of measures included in Bill C-86, A second Act to implement certain provisions of the budget tabled in Parliament on February 27, 2018 and other measures, which received royal assent on December 13, 2018.
For example, Bill C-419 proposes that a bank must obtain the consumer's consent before increasing the credit limit on a credit card and provide written confirmation if consent is given verbally. That is important. They must not increase the limit on a credit card without the consent of the consumer. The written consent is important, and we have already added this requirement to existing protections.
The bill also proposes to require the disclosure of specific information in credit card advertising, including annual interest rates. This requirement is a duplication of existing requirements, including the obligation to disclose the annual interest rate and other interest expenses in advertising.
I will go back to what my colleague said at the outset. This text amends the Bank Act, the Trust and Loan Companies Act, and all other legislation I mentioned earlier. When Canadians deal with their financial institutions, they want their information to be protected, the goods and services to meet the highest standards and the fees they pay to be fair. First and foremost, people must know what they are getting themselves into with their credit card.
For more than a decade, the previous Conservative government failed to make any significant changes to Canada's consumer protection standards despite the major technological changes that would have made them possible.
In the wake of an extensive review of bank sales practices and broad consultations with the provinces and territories, our government took significant measures to promote Canadians' rights and interests. That is important. We always talk about the middle class. Credit cards are a method of payment and it is important that they be subject to the same rules and that people know how to use them.
Our government's decision to implement a new set of rules to protect Canadians when they use their financial institution represents the most significant change since the creation of the Financial Consumer Agency of Canada in 2001.
Conservative MPs refused to defend Canadian consumers when they formed the government. They have no real plan to defend them now.
The bill that our colleague introduced proposes two sets of amendments to federal legislation regarding financial institutions and credit cards. The first would limit credit card interest rates for consumers by reducing the amount of interest to be paid when a borrower pays 95% of his or her outstanding balance; by applying the lowest interest rate on purchases when interest rates change during a billing cycle; and by requiring lenders to apply all payments to the portion of the balance with the highest interest rate. This is an important part of the proposal. The Banking Act already requires banks to apply payments either to the balance with the highest interest rate or to prorate it to each unpaid balance.
The second set of amendments imposes new disclosure and business practice requirements. The bill would require that lenders disclose the total of all amounts of interest paid by a borrower for the previous 12 billing cycles and that credit card advertisements clearly indicate the interest rate, fees and any applicable discounts. Other amendments would require that cardholders give their consent before their credit limit can be increased. I spoke about that earlier. It is a very important measure. There are also amendments that would require that cardholders have an electronic means to decrease the credit limit on their card if a bank provides online banking.
Our government is working hard to protect consumers. As part of our ongoing efforts to improve the consumer protection framework, our government recently completed an important review and update of the consumer protection framework under the Bank Act and the Financial Consumer Agency of Canada Act. It is important to remember that this had not been done since 2001 and that we have been working on this since we took office.
The measures to be added to the previous Bank Act will be based on the information in two reports prepared by the Financial Consumer Agency of Canada, the FCAC. The first report consisted of an exhaustive review of bank sales practices, and the second reviewed the best practices in financial consumer protection. Our government was also guided by an important study carried out by the Standing Committee on Finance on consumer protection and bank practices.
The Standing Committee on Finance works very hard. Ten parliamentarians meet at least twice a week and work on reports. These people come to an agreement before making recommendations. They meet with many witnesses. When the Standing Committee on Finance, or any House committee, prepares a report, 10 parliamentarians study everything in the report to ensure that the recommendations made to the minister will improve legislation. This is done by mutual agreement.
Consultations are also needed with the provinces and territories to update the consumer protection rules. Bill C-419 introduced by our colleague across the aisle has not been the subject of extensive consultations with stakeholders, including provincial and territorial governments. This is in contrast to what was done to prepare for the most recent measure we put in place. Consultations with the provinces and territories are essential. I cannot stress that enough. These are not things that are easily changed. Consultations, witnesses and experts are needed. It is important to ensure that everything complies with all the previous rules, as well as the laws already in force. Every possible impact of amending legislation as complex as the Bank Act must be considered, as it governs banking institutions.