The federal government has proposed new regulations to help consumers resolve banking disputes efficiently and transparently.
In announcing the regulations, Finance Minister Jim Flaherty said the "sweeping" rules will empower consumers to resolve banking disputes "by creating a stronger, more independent consumer complaint system."
Flaherty said, "This will happen by putting in place, for the first time, a framework that sets pro-consumer standards all banks and authorized foreign banks must meet and will ensure federal government supervision of the external complaints body's compliance with the new regulations."
Although banks are already required to have consumer complaints procedures in place and to be members of external complaints organizations, there were no regulatory standards established for the external complaints bodies and no formal compliance monitoring by the Financial Consumer Agency of Canada (FCAC). Banks have been allowed to select which external complaints organization they join.
According to the federal government, some banks have recently changed external complaints bodies, "leading to a variation in procedures used and uncertainty for consumers."
The federal government has also passed legislation to force banks and authorized foreign banks to belong to only federally approved external complaints bodies, and give FCAC the authority to enforce compliance.
The proposed regulations will require banks to co-operate with their external complaints body by, for example, informing customers of the name and contact information for the external complaints body so consumers clearly know who to contact when a dispute arises.
The rules will also have the FCAC conduct an in-depth review of all external complaints bodies prior to their consideration for approval, and then monitor them and enforce complaints to new, high standards.
The regulations will be available online in the Canada Gazette from Friday July 13 for a 30-day comment period.
