Canada: New Consumer Protection Framework For Banks

Last Updated: November 15 2018
Article by Suhuyini Abudulai

Bill C-86, Budget Implementation Act, 2018, No. 2. (Bill C-86) received second reading in the House of Commons on November 6, 2018. Among other amendments, Bill C-86 proposes amendments to the Bank Act (Canada) (the Bank Act). Bill C-68 picks up from the amendments proposed to the Bank Act in 2016 under Bill C-29, Budget Implementation Act, 2016, No. 2, of which we previously reported in our e-Lert " Bank Act Amendments – New  Consumer Protection Framework." Bill C-86 consolidates provisions of the Bank Act and introduces new measures to strengthen provisions that apply to banks and authorized foreign banks in relation to consumer protection.

The following is an overview of some of the significant amendments proposed to the Bank Act by Bill C-86 in relation to the financial consumer protection framework.

Response to Marcotte and Bank Retail Sales Practices

The proposed amendments respond to the landmark Supreme Court of Canada decision in the trilogy of cases known as Marcotte, of which we previously reported in our e-Lert " Supreme Court of Canada Rules That Consumer Protection Laws Apply To Bank-Issued Credit Cards."

Bill C-86 also responds to the findings and conclusions of the Financial Consumer Agency of Canada (FCAC) in its reports "Domestic Bank Retail Sales Practices Review" and "Report on Best Practices in Financial Consumer Protection." The FCAC has oversight of federal consumer protection legislation that applies to federally regulated financial entities. The FCAC's review of the domestic retail sales practices of Canada's six largest banks stemmed from allegations publicized in Canadian media of mis-selling by bank employees of financial products and services to consumers.

Financial Consumer Protection Framework

Corporate Governance

The Bill C-86 proposed amendments require banks to designate an independent board committee with duties that include requiring management to establish procedures for compliance with consumer provisions, reviewing procedures for appropriateness for compliance, and requiring management to report at least once a year to the committee on the implementation of these procedures and other activities carried out by the bank in relation to consumer protection. The board committee would also have reporting obligations to the directors of the bank and the Commissioner of the FCAC.

Fair and Equitable Dealings

The fair and equitable dealings regime under the proposed amendments establishes, among other things, the following:

  • Training. Banks to ensure that officers and employees in Canada and any person who offers or sells the bank's products or services in Canada to be trained in respect to the bank's policies and procedures established for compliance with the consumer provisions of the Bank Act.
  • False or misleading information. Prohibition on banks communicating false or misleading information to customers, the public or the FCAC Commssioner.
  • Prohibited conduct. A general prohibition on undue pressure or coercion, taking advantage of a person, and engaging in conduct prescribed by regulations under the Bank Act.
  • Provide appropriate products or services. Banks to establish and implement policies and procedures to ensure that products or services in Canada that the bank offers or sells to natural persons (other than for business purposes) are appropriate for the person with regard to their circumstances, including their financial needs.
  • Remuneration. Banks to ensure that the remuneration of its officers and employees in Canada (and any person that offers or sells its products or services in Canada) and any payment or benefit the bank offers to such persons, does not interfere with such person's ability to comply with the above-mentioned policies and procedures relating to appropriate products or services.
  • Cooling-off period. Providing a cooling-off period for persons to cancel agreements providing ongoing products or services within prescribed time periods.
  • Alert of account balance. Banks to send an electronic alert to natural persons if their personal deposit account or credit account is below an amount prescribed by the person, provided that if there is no such prescribed amount, then the alert would be sent where the amount is below $100.

Retail Deposit Accounts

The proposed amendments include new disclosure provisions in respect of personal deposit accounts, requirements for retail deposit account openings upon provision by a person of specified identification documents, a prohibition on requiring a natural person to make a minimum deposit or maintain a minimum balance, provisions requiring banks to provide customers with a minimum amount of funds upon deposit of a cheque or other instrument, and modified requirements in relation to the cashing of government cheques.

Cost of Credit Disclosure to Business Customers

Currently, banks must disclose prescribed information, including the cost of borrowing, to  natural persons other than for business purposes, prior to entering into a credit agreement with such person. The Bill C-86 proposed amendments expand disclosure requirements to business customers, requiring banks to provide information, to be prescribed, to business customers prior to entering into a credit agreement with such business customers.


Where a bank has imposed a charge or penalty in relation to a product or service, the bank will be required to credit or refund the amount of the charge or penalty, if it was collected but not otherwise provided for in the respective agreement, or credit or refund any excess amount that is greater than the amount of the charge or penalty provided for in the agreement. Banks will also be required to credit or refund a charge or penalty where the bank has not obtained the express consent of a person before providing the person with a product or service.

Public Accountability

Banks with equity of $1 billion or more will be required to file a written statement with the FCAC Commissioner, within 135 days of financial year end, setting out the following information:

  • the names of voluntary codes of conduct adopted by the bank, which are designed to protect the interests of its customers and are publicly available, as well as any public commitments it has made which are designed to protect the interests of its customers and the means the codes and commitments are available to the bank's customers and the public;
  • measures taken by the bank to provide products and services to low-income persons, seniors, persons with disabilities and persons who face accessibility, linguistic or literacy challenges; and
  • consultations undertaken by the bank with its customers and the public in relation to existing products and services (including how they are provided), the development of new products and services, identifications trends and emerging issues that may impact the bank's customers or the public, and matters in respect of complaints received by the bank.

Complaints Process

Bill C-86 proposes an enhanced complaints regime under the Bank Act, significantly expanding existing obligations of banks and authorized foreign banks. Under the complaints regime, banks will be required to:

  • establish procedures satisfactory to the FCAC Commissioner for dealing with complaints, within a period to be prescribed, and designate one of the bank's officers or employees in Canada to be responsible for receiving and dealing with complaints and implementing such procedures;
  • annually make available on the bank's website, in addition to any other information that may be prescribed by regulation, information relating to the number and nature of complaints the bank is dealing with, the average length of time taken to address the complaints, and the number of complaints that have been resolved to the satisfaction of the persons who made the complaints;
  • within 60 days of the end of each quarter, submit a form to the FCAC Commissioner, with respect to each complaint received by the designated officer or employee during that quarter, a copy of the record (the record must be retained for at least seven years) of the complaint containing prescribed information; and
  • not use misleading terms with respect to complaints procedures, including the use of the term "ombudsman."
  • The definition of complaint is broad and means dissatisfaction, whether justified or not, expressed to an institution with respect to a product or service in Canada that is offered, sold or provided by the institution or the manner in which a product or service in Canada is offered, sold, or provided by the institution.

Whistleblowing Regime

A new whistleblowing regime is proposed for banks and authorized foreign banks under Bill C-86 with respect to any "wrongdoing." Wrongdoing is defined as including a contravention of any provision of the Bank Act or the regulations made thereunder, a voluntary code adopted by the bank or a public commitment, and a policy or procedure established by the bank. Any employee of the bank who has reasonable grounds to believe the bank or any person has committed or intends to commit a wrongdoing may report the matter to the bank or the FCAC Commissioner, the Superintendent of Financial Institutions, any government or body that regulates or supervises financial institutions or a law enforcement agency. Policies and procedures will be required to be implemented for dealing with wrongdoing matters reported to the bank and prohibiting the bank from taking action against such employees (such as disciplining, harassing, suspending or demoting the employee).

Financial Consumer Agency of Canada Act Amendments

Bill C-86 also amends the Financial Consumer Agency of Canada Act (the FCAC Act). The FCAC Act delineates the FCAC's functions, administration and enforcement powers, and the provisions of federal law under the FCAC's supervision. Proposed amendments to the FCAC Act include a requirement of the FCAC Commissioner to publicly disclose the nature of a violation, including the name of the person who committed it and the amount of the penalty. This power is subject to any regulations that may be published. The proposed amendments of the FCAC Act will increase the maximum penalty for violations of the consumer protection provisions of the Bank Act from $50,000 to $1,000,000 for natural persons and from $500,000 to $10,000,000 for financial institutions or payment card networks.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions