Madam Speaker, I want to correct the record. Earlier, the parliamentary secretary said that this bill may “confuse“ or “harm” Canadians. I find it very interesting that it would confuse Canadians or cause harm to Canadians when it has seven measures within it that would protect them and advocate for the right of fairness and transparency. Only Liberal logic would say that fairness and transparency somehow would confuse or harm Canadians. It is very interesting.
Nevertheless, the bill before the House today is my private members' bill, Bill C-419, which is the credit card fairness act. In the legislation, I propose seven changes that would advocate on behalf of Canadian consumers.
The reason I am proposing this is because people from across the country have told me they are struggling to make ends meet and that one of the things that could be done to assist them would be an increase in the fairness and transparency that surround credit cards so they could make better and more informed decisions with regard to credit card use.
I understand this would not solve all the problems, and it certainly would not. People have to take personal responsibility for their spending habits. However, fairness and transparency are noble principles to which we should hold banks accountable. Government officials advocate on behalf of Canadian consumers.
This is the bill that is being proposed to Parliament, and it is important for a couple of reasons.
First, nearly every person in Canada has a credit card. We use it for Amazon purchases, or Uber rides or to book a plane ticket or a hotel room. It is a necessity to get by in our modern Canadian life.
The other reason this is so important is because consumers deserve transparency and to be treated with fairness. At the end of the day, it is difficult when people are dealing with something as complex as the Bank Act to represent themselves as a consumer or advocate for change. Therefore, consumers rely on government officials, those in the House, to advocate on their behalf when they find themselves in a tight situation where it is difficult for them to create change on their own initiative.
It is right for governments to insist that banks be fair and transparent. It is right because these banks hold people's money and therefore hold a lot of power. Those of us in the House have the responsibility to push back on that and to ensure they abide by the laws.
I will very briefly outline the seven reforms within the legislation.
First, when people make payments on their credit cards, and let us say they do not pay it off quite in full but pay 95% or more, it would mean they would not be expected to pay interest on the entire bill, but only on the amount outstanding. Right now, that is not the case. For example, if a person has a bill for $1,000 and pays off $999, that person would expect to pay interest only on the $1 that is outstanding. That seems quite reasonable. Most Canadians I talk to think that is the way things are, but it is not.
In fact, many people in the House think that is the way things are. It is not. Instead, if a person pays $999 off a credit bill, that person pays interest on the entire original $1,000 and not the $1 that is outstanding. Let us be very clear there, let us make some changes and make it more fair.
Second, if a cardholder has a high-interest debt and a low-interest debt, it would be reasonable for the amount that the cardholder pays on the bill to be applied to the highest interest first. Right now, banks take advantage of that a bit and like to put it toward the lower amount, which helps them collect further money. That is unfair. I want to advocate on behalf of the consumers, so I believe 100% of their payment should go toward the highest interest first.
Third, the bill would also require banks to disclose the amount of interest cardholders pay on their monthly statements.
Fourth, it would require advertisements and marketing materials to properly display all the information in bold print, not fine print.
Fifth, it would also prohibit credit card companies from increasing interest rates retroactively; in other words, on money already spent. That seems fair.
Sixth, it would require credit card companies to provide an online mechanism by which people could cancel their credit cards. This is also fair.
Seventh, the bill would legislate that credit card companies could not automatically increase a cardholder's limit, which is very important for consumer protection.
I would ask for the support of the House to bring fairness and transparency to credit card consumers.