New policies aim to protect Canadians from impact of rising mortgage payments
Deputy prime minister and finance minister Chrystia Freeland has announced new measures that she said would ensure that banks were treating their Canadian consumers fairly, aimed at making banking more affordable as part of the government’s efforts to reduce inflation and stabilize prices.
“Whether it is ensuring Canadians have access to high-quality, affordable banking options and are not subjected to unfair fees, or making sure they receive the mortgage relief they need, our government will continue working to ensure Canadians are treated fairly by their banks,” said Freeland.
The measures include efforts to protect Canadians against rising mortgage payments, enhancing low-cost banking options, lowering non-sufficient fund (NSF) fees, and ensuring that there will be an impartial advocate whenever consumers have complaints with their bank.
The new measures set in place
Freeland said that she had met with the CEOs of the largest banks in Canada and outlined her expectations regarding their compliance with the government’s new mortgage guideline which was issued by the Financial Consumer Agency of Canada (FCAC).
The deputy prime minister also stated that the government will be taking action in securing the enhanced low-cost and no-cost account options from the banks in the country.
Freeland explained that the FCAC was directed to work with the banks to improve features of low-cost accounts, expand no-cost account eligibility to more Canadians, and add more to the enhanced affordable banking options to more financial institutions.
Junk fees such as the NSF fees charged by banks will also be suppressed, with those measures typically affecting Canadians will low incomes. NSF fees normally ranged from $45 to $50 and were charged to consumers if they had insufficient funds in their bank accounts to cover a cheque or pre-authorized debit.
With the directive aimed at lowering NSF fees already issued, an update regarding further actions on junk fees will be announced in the Fall Economic Statement.
The Ombudsman for Banking Services and Investments (OBSI) had been designated as the single external complaints body for the banking sector in support of Canadians who may have been unfairly treated by their banks. Prior to that, the country had two approved external complaints bodies that dealt with complaints and banks were allowed to choose to which one they belonged.
The OBSI will have the jurisdiction to resolve complaints at all Canadian banks beginning November 1, 2024.
