Madam Speaker, I am pleased to be rising at this late hour to join the debate on this private member's bill, Bill C-419.
Bill C-419 is an act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act. The reason it mentions all of those is that the bill would amend every single one of those acts in exactly the same way regarding credit cards, including exactly what type of reporting will happen on the credit cards and what type of information will be required for customers to receive.
My colleague, the member for Lethbridge, has moved this excellent piece of legislation, which I ardently support. It is about time that there be greater fairness for those who use credit cards. There is a Yiddish proverb that says, “Do good and ask not for whom”, which is exactly the spirit of this proposed legislative amendment that my colleague is moving. We are trying to do good here on behalf of all of those who carry a large amount of credit card debt. We are not asking who will receive the benefit. We simply want to provide more fairness for those who have to use credit cards on a daily basis, whether they are students, members of Parliament or just regular Canadians who have expenses and use credit cards on a daily basis to pay for them.
As I mentioned, the same amendments would apply to every act the bill mentions. However, on the Bank Act side, what the legislation proposes to do, under proposed subsection 451.1(1), is that if a person pays at least 95% of an outstanding credit card balance, interest would be charged only on the difference. For example, if there is $1,000 owing and $950 and change is paid, then interest would be charged only on the balance left owing.
What is happening right now is that, with online banking and the apps that banks provide, it is easy to make a typo mistake when trying to pay a bill. What people do not understand is that if the full amount owing is not paid, then interest on the full amount is charged. For example, on a $1,000 credit card bill, if $950 is paid, then the interest charged will be on the $1,000, and that could be at 19.95%, 21.99% or whatever the credit card interest is. The interest is not charged just on the amount outstanding but on the full amount. Therefore, the bill proposes that if 95% is paid, then there would be credit for that amount and interest would not be owing.
The bill is a perfectly reasonable piece of legislation that gets to the point of fairness. It gets to the point for people who are honestly trying to pay off the full amount. Perhaps a person could not pay the full amount in a particular month, or had made an error in the calculation of the amount owing or made a mistake typing on the app when trying to pay the correct amount and clicked next thinking it was perfectly fine. If people make an honest mistake, they would not be charged on the full amount, such as in my example of the $1,000. They would only be charged on the difference left outstanding on the credit card bill.
The bill also proposes that consent be sought for any type of credit limit increase, which is found in proposed subsection 451.3(1) of the bill. Specifically, if a bank chooses to increase a credit limit, it has to obtain the cardholder's approval to do so first. This is an issue for people who have a credit report out there that they are checking and double-checking.
For example, when applying for a loan or a mortgage, if one has a lot of credit cards on his or her credit report, the banks can see the balance and total amount of credit a person can obtain, which will affect whether a bank approves a mortgage, credit card, personal line of credit or home equity line of credit. As well, it can be shocking to get a letter in the mail where the bank is extending extra credit that was not asked for. A person may use a credit card for a specific purpose and only wants $1,500, not $10,000 or $15,000, but the bank could increase the credit without asking permission. I have had this happen to me and have asked the bank to lower it back down.
That is probably a nice problem to have for some, but for those of us who are trying to manage our credit reports and credit rating scores, it is a bother. We have to reach out to the bank and have it changed back to what it used to be. Therefore, this particular provision of the act, which I like, and proposed subsection 451.3(2), “Confirmation in Writing”, which I also like, I think get to some of the problems that could happen if banks and issuers in general could simply just issue credit limits that people do not want.
I have had it happen in the past. My son, who was eight years old at the time, was issued a notice that he was eligible for a credit card for $500. I do not know how the company got the information. It must have drummed it up in its database. I had to call the bank to inform it that my young Maximillian should not be eligible for a $500 credit card because, although he was a student, he was not a university student and the bank probably did not mean to send it to him.
The customer service agent apologized about the error and we had a good laugh about it on the phone, but of course those types of situations should not be happening. Parents should not have to be calling a bank to double-check with it as to how it got the information and why it made such an error.
I think this legislation is timely. As I mentioned, we should be doing good here and not asking for whom. There is no lobby out there asking for these credit limit rules to be imposed. I do not think there is a lobby out there asking for the changes proposed in this piece of legislation. I think the member for Lethbridge is simply going after fairness for the general population. It is a diluted benefit across the entire Canadian population for all those consumers who are using a credit card.
Many consumers in Canada prefer to use debit, and I know why. I sometimes rely on my debit card as well. However, this is for all those who are using a credit card, regardless of who the issuer is, to make sure that if they are trying to get close to paying their total amount—95% in this case, of their outstanding balance owing—they will not be charged interest on the full amount because they did not pay it all off. It is there in the terms of reference.
We are all like this. I will be the first to tell members I have never read my iTunes user agreement. I admit to that. I have never read it. I just click on “Okay” every single time. I trust the member for Kingston and the Islands has read it; I know he has.
I have gone through the Netflix one, just out of sheer curiosity as to what is in there, but many of us simply click on "Okay" and move on. We are all guilty of this.
However, I have read my credit card rules and the little sub-points in them. I did it before I became a member of Parliament, and afterward especially, because I realized very quickly how much of our expenses are run through our offices. I had to ask for five credit card limit increases because so many of our expenses are run through our credit cards. I do not know if other members have had this experience, but many of our expenses are, so I carry a balance month to month.
I am fortunate that I can pay it off every single month. It is a practice my parents instilled in me. For those of us who are unable to do so, for those of us who do make those typing mistakes—I know I have made a few expensive typing mistakes in 2018 that cost me very dearly in interest—and for those of us who are getting closer, the 95% the member for Lethbridge is proposing is a reasonable legislative change that will do good. We are not asking for whom, because all credit card users across Canada will benefit from this legislative change. I hope that it will find support on both sides of the House that will send it to committee for a thorough review of the consequences of making such a legislative change.
I think that in this case, more information and control for credit card holders and fairness on the side of how much interest people are paying when they are trying to pay off the total amount owing on their account balance is a good thing. It is good thing for Canadian credit card users. We would do good and we will not ask for whom, so I am imploring all members of the House to support this important piece of legislation that has been brought forward by my colleague from Lethbridge.