Mr. Speaker, I would first like to talk about the parliamentary secretary's very surprising comments. He said that the banks are going to implement measures whereby consumers who pay off their credit cards every month, for example, will not pay any fees.
There is an inherent difference between our philosophy and that of the Conservatives, who sit on the other side. If a student's credit card is maxed out at $800 and the student pays the minimum amount and interest every month, it will take about 15 years to pay off the credit card. Richer people can of course pay off their debts. That is the philosophy of the people on the other side of the House.
We must protect all consumers, both small and big. I congratulate the member for Davenport, who moved this motion on June 1, because this is the day that my bank, and probably several others, announced increases in a number of fees it charges consumers. For example, my bank is increasing the fee for an NSF cheque from $45 to $48.50.
This motion on pay-to-pay fees calls on the government to ban all pay-to-pay practices through the enactment of a voluntary financial code of conduct. It could gradually be made mandatory. The purpose of this motion is to protect consumers. That seems pretty clear to me.
The most profitable banks in Canada have decided to make us pay extra fees to carry out all sorts of basic transactions. If we want to make a credit card payment it will cost us an extra $2. If we want to make a regular mortgage payment or pay down a student loan it will cost $1. If we want to use a contactless debit card it will cost $2. The banks are going to make us pay to use our own money.
What is more, it is middle-class families who are already struggling and carrying too much debt who are going to pay. They will not be able to afford the so-called premium bank accounts, such as the infamous accounts where you do not have to pay fees if you keep $5,000 or $3,000 in your account. This certainly works for some Canadians, but there are many who live paycheque to paycheque. Some earn $15,000 or $20,000 a year and cannot afford to keep $3,000 or $5,000 in their bank account. This includes many seniors.
I would like to read from an article in Le Devoir, from May 19:
The Canadian banks, RBC, TD, the CIBC, all closed with higher earnings than for the same period last year.
The bank posted net earnings of $2.5 billion.
The Royal Bank saw its profits increase by 23% to $625 million.
CIBC saw its earnings practically triple to $911 million.
Retail and Business Banking posted a net gain of $583 million for the second quarter, an increase of $37 million.
It is obscene, because these are not co-operatives. All Canadians will not share in these profits, but rather a small minority of individuals. Those who cannot afford to keep $3,000 or $5,000 in their bank account to avoid paying monthly bank fees will not benefit.
Not too long ago, in April, if I am not mistaken, I introduced Bill C-663, which deals with excessive bank fees. There are currently no regulations to limit bank fees in Canada. On top of fees for everyday services, banks also charge additional fees for occasional services, such as for NSF charges. Banks make millions of dollars in profits on fees charged to individuals for banking services.
Fees need to be regulated immediately, especially NSF charges. The following measures could be taken, and it would be quite simple: prevent banks from charging fees to customers who deposit a payment from a third party when the payment ends up being NSF. Mr. Speaker, if I write you an NSF cheque, you are the one who will be charged. Just like that, you will be fleeced that day, so it is a double punishment, a double charge. We could also set a maximum amount for NSF fees and require banks to provide customers with a grace period to cover the overdraft before dishonouring a cheque or refusing a debit. That would be entirely in good faith. Banks should treat their customers as we treat our constituents and give them a warm welcome. It would be really nice if a bank could call customers to let them know about an NSF situation and give them a chance to come and cover the amount and avoid the charges and a bad credit score.
Banks need to produce reports listing all of the bank fees they charge customers for all of the services they provide in Canada, and it is important that the reports also indicate the real costs associated with these services. In the United States, the fee for processing an NSF cheque seems to be about 50¢, $1 or $1.50. At my bank, these fees have just increased to $48.50. That means that there is a very big margin. It may cost more in Canada than in the United States to process these cheques, but if the banks were transparent we could see exactly how much the service costs and they could then charge a percentage based on that cost.
The NDP, along with the media and millions of Canadians, believe that the banks are raking in huge profits, and meanwhile Canadians struggle to make ends meet and are paying increasingly exorbitant bank fees. The banks earn the most profit from the fees they charge customers and the fees they charge for banking services. These fees are taken directly from the pockets of the middle class and from people who do not have much money.
In the 2015 budget—on page 248 for the members opposite who have read it—the Conservatives have some empty words about banks. They were rather modest and cautious. They talk about improving transparency and accountability, for example, through enhanced public reporting on complaints and on measures taken to address the challenges faced by vulnerable Canadians. This does not refer to Canadians who have $3,000 or $5,000 to avoid paying bank fees, but to those who do not have those kinds of means. They would be in less of a predicament if the banks called them and they were not billed $45 to $90 for non-sufficient funds.
Whom do these measures affect the most? Young people, people with low incomes, seniors, members of minority ethnic groups and people without credit cards. Some 28% of people who have had to pay overdraft fees have told me that they closed their bank account as a result. Once they have no access to banking, they can no longer receive services. About 65% of individuals who have paid overdraft fees say that the transaction that resulted in the overdraft was for $50, and 15% indicated that the transaction was for $5 or less. Having to pay $45 for a $5 overdraft is absurd.
Canadians should not have to hand over their hard-earned money just to get a bank statement or pay a bill. That is called “pay to pay”. Canadians pay as much as $180 million per year just for bank statements. Nobody should be punished for receiving bank statements or paying bills.
Maybe people have forgotten, but not so long ago, bank fees did not exist, and companies did not charge fees to send bills in the mail. Now that companies are no longer sending bills in the mail, they want to make all the unlucky ones who get them pay to pay.