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Updated sample letter to Prime Minister Stephen Harper, Finance Minister Jim Flaherty, Opposition Party Leaders, and your MP



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Spring 2012

Urgent: Write now to support better banking laws, and a strong public interest review process for proposed bank mergers and takeovers


BACKGROUND
(See Action Letter below)

The bank mergers proposed in 1998 were stopped, but TD Bank was allowed to take over Canada Trust in February 2000, banks and other financial institutions continue to provide poor service to many Canadians, and bank mergers will likely be proposd in the future.

The federal government released a policy paper on financial services at the end of June 1999, and introduced draft legislation in the form of Bill C-38 on June 13, 2000, but Bill C-38 was derailed by the fall 2000 federal election.

Bill C-38 was re-introduced as Bill C-8 in February 2001, and was passed by Parliament in June 2001.

Bill C-8 contained some good measures, but left some key gaps in bank regulation (For details, see Comparison Between Bill C-8 and CCRC Recommendations).

In late 2006, the federal government introduced Bill C-37 (which passed in April 2007) but it contained a couple of ineffective measures that only slightly increase bank accountability in Canada (For details, see the CCRC's Analysis of Bill C-37).

In 2011, Bill S-5 was introduced, but all it did was strengthen a couple of measures and increase penalties from $250,000 maximum to $500,000 maximum (which is much too low).

The federal government has an ongoing review of the Bank Act -- so please let the government know you want Canada's banking law strengthened to prevent and penalize gouging and abuse of customers, businesses and communities by Canada's big banks.

In addition, the federal government has an ongoing public consultation process on the review process for bank mergers.

Below are suggestions for pushing the government to close these gaps in your letter to Prime Minister Stephen Harper, Finance Minister Jim Flaherty, opposition party leaders, and your MP. Also, it is very helpful if you include examples in your letter of poor service you have received from banks or other financial institutions.



ACTION
LETTER
(Please copy and send the letter to the addresses below, and please add to the letter your personal examples of unfair treatment you have received by Canada’s big banks and/or ways in which you think the banks act irresponsibly or unfairly)

Dear Prime Minister Harper / Finance Minister Flaherty / Opposition Party leader / Your MP:

The federal government strengthened bank accountability by including some good measures Bill C-8 (passed in June 2001). However, some key gaps were left that made it difficult to ensure banks and other financial institutions serve all Canadians fairly and well and use our money responsibly, and Bill C-37 (passed in 2007) did little to close these gaps.  In 2011, Bill S-5 was introduced, but all it did was strengthen a couple of measures and increase penalties from $250,000 maximum to $500,000 maximum (which is much too low).

Canada's big six banks reported record annual profits in 2011 totalling $25.46 billion (up 19.8% from $21.15 billion in 2010), but still the federal government continues to fail to require the banks to do anything to ensure better service and prices for customers, and more responsible lending and investing, even though during 2009-2010 the government offered the banks the largest subsidy ever of up to $135 billion (most of it by having CMHC purchase mortgages from the banks).

As a result of the subsidies, and interest rate and fee increases imposed by the banks in the past couple of years, the banks have not only recorded record profits, they have also given their executives more than $10 million in bonuses.

I'm writing to urge you and the federal government to make the changes needed to ensure our big banks meet our needs, lend and invest our money responsibly, and remain Canadian-owned and controlled.  

The following key changes must be made to ensure better Canadian big banks (See details :
  1. Facilitate the creation of a Financial Consumer Organization (FCO) to help consumers (as recommended by the Task Force on the Future of the Canadian Financial Services Sector and a House and Senate committee in 1998), and an Individual Investor Organization (IIO), by requiring banks and other financial institutions to enclose an FCO information pamphlet in their mailings to customers, and an IIO information pamphlet in their mailings to shareholders, with both pamphlets inviting people to join the watchdog groups at a nominal annual membership fee;
  2. Require banks and trust companies to provide detailed information on loans, investments and services to customers, as required in the U.S (to track whether banks are fairly meeting the needs of individuals and businesses on a community-by-community level and, as in the U.S., to require corrective action if banks are not fairly meeting customer needs);
  3. Empower the Competition Bureau and Financial Consumer Agency of Canada (FCAC) to conduct an audit of profits from service charges and credit card interest rates, and reduction in competition community-by-community across Canada, and savings from closing branches and firing tellers, over the past 15 years, and require banks to cut charges and open branches if past profits were excessive; 
  4. Prohibit any future service charge or credit card interest rate increases if the bank can't prove the increase is justified;
  5. Require banks and trust companies to disclose the profit/loss record for any branch proposed to be closed, to allow for a full review of the reasons for the closure;
  6. Require banks and trust companies to prove that they have a fair, responsible and very good service, lending and investment record every year for the past 10 years as a mandatory condition for any financial institution bidding on federal government contracts;
  7. Require the Financial Consumer Agency of Canada Commissioner to conduct "mystery shopper" audits of financial institution compliance with laws at least every 3 years, and to disclose the name of the financial institution and the terms of settlement whenever the Commissioner finds that an institution has violated the law (currently, the Commissioner can only disclose the name of the institution if the Commissioner prosecutes the institution), and change the complaint process to require all financial institution to be covered by the Ombudsman for Banking and Investments (OBSI) and allow consumers to complain to the OBSI directly at any time without having to go first to their bank's ombudsman;
  8. Give customers access to the money they deposit by cheque as soon as the cheque clears, and;
  9. Given that each of the big banks makes billions of dollars each year, increase the maximum penalty for violating the Bank Act from the too-low amount of $200,000 to the more effective penalty of $50 million.
Canadians have made it clear in every poll conducted over the past 15 years that they need, and want, better banks.  Please close these gaps by passing a law to ensure that all financial institutions in Canada serve all Canadians fairly and well, use our money responsibly, and can be held accountable for poor lending, investment or service records.

And please do not let Canada's banks take over any other financial institution, or merge together, before you have set up the Financial Consumer Organization and Individual Investor Organization, and the strict bank lending, investment and service disclosure and evaluation system outlined above.

Please let me know what steps you are taking to introduce bills to close these bank accountability loopholes, to pledging in your party's election platform to close these loopholes.

My vote in the next election will very much depend on your response.  I look forward to hearing from you.

Sincerely,

(put your name, postal address and email address here, and send the letter to the addresses below)

********

DETAILS about the 9 bank accountability proposals made in the above letter:

  1. The Task Force on the Future of the Canadian Financial Services Sector recommended the creation of the Financial Consumer Organization (FCO) in its September 1998 Report (See Recommendation #56(b) on page 208 of the Report), and the House of Commons Finance Committee and Senate Banking, Trade and Commerce Committee endorsed the recommendation in their December 1998 reports.  To see a summary of the FCO proposal (on the Democracy Watch website), click hereTo see the CCRC's full position paper describing the FCO proposal in detail, click here, and for more details, click here).  The creation of the Individual Investor Organization (IIO) was recommended by an Ontario parliamentary committee in September 2006.  To see a summary of the IIO proposal, click here.
  2. To see details about the U.S. Community Reinvestment Act (CRA), click here -- To see details about the $4.5 trillion in reinvestments that have resulted from the CRA since 1977 (in a PDF-format document), click here); and prohibit bank takeovers and mergers (such as TD Bank's takeover of Canada Trust -- To see the CCRC's review of the TD Bank takeover of Canada Trust, click here) if the disclosed information shows that they do not serve all customers well -- To see the CCRC's position paper describing how this bank accountability system should work, click here;
  3. To see details about the proposal to audit on cutting of banking branches and services, and prices and interest rate hikes, over the past 15 years in Canada, click here;
  4. To see details about the proposal to prohibit any price or interest rate increases by the banks unless they can justify the increase, click here;
  5. To see details about the proposal to require banks and trust companies to disclose the profit/loss record for any branch proposed to be closed, click here;
  6. To see the CCRC's position paper describing how each bank's lending, investment and service record could be evaluated regularly, click here; and to see the CCRC's position paper concerning evaluating bank mergers and takeovers and competition issues, click here;
  7. To see details about the flawed powers of the Financial Consumer Agency of Canada Commissioner to disclose the name of financial institution's that break the law, click here and view subsection II(c);
  8. Bill C-37 (which passed in April 2007) only reduces the cheque hold period from the usual 10 days to 4-7 days, even though 98 percent of cheques clear in one day, and;
  9. Bill C-37 (which passed in April 2007) increased the maximum penalty from $100,000 to only $200,000, a meaningless penalty for Canada's big banks which each make $15 billion in revenue each year.

THE ADDRESSES
Please send your letter for free (no postage necessary), to Prime Minister Stephen Harper, Finance Minister Jim Flaherty, Interim Liberal Party Leader Bob Rae, the NDP and Green Party Leader Elizabeth May, and your own MP
all at the following address (NO POSTAGE NEEDED):

House of Commons
Ottawa, Canada
K1A 0A6
(To find your MP using your postal code, click here)

OR send your letter by email to all the federal party leaders, the Finance Minister, and key MPs and Senators at:
pm@pm.gc.ca, harper.s@parl.gc.ca, bob.rae@parl.gc.ca, rae.b0@parl.gc.ca, ndpadmin@fed.ndp.ca, may.e@parl.gc.ca, may.e0@parl.gc.ca, leader@greenparty.ca, info@greenparty.ca, media@greenparty.ca, fina@parl.gc.ca, dwatch@web.net, indu@parl.gc.ca, banking_banques@sen.parl.gc.ca

You can also fax your letter to Stephen Harper at fax: (613) 941-6900 or Jim Flaherty at fax: (613) 995-5176.

NOTE: Email letters are not read as thoroughly, and are not as influential over policy-makers, as hand-written letters sent by mail or faxed. So please, if you have the time, write a letter and send it by mail or fax to these two ministers.

OR send your letter by fax or email individually to:
Prime Minister and Conservative Party Leader Stephen Harper
Fax: 613-941-6900
Email: <pm@pm.gc.ca>
Email: <harper.s@parl.gc.ca>

Liberal Interim Leader Bob Rae
Fax: 613-947-0310
Email: raeb0@parl.gc.ca, raeb@parl.gc.ca

NDP
Fax: 613-230-9950
Email: <ndpadmin@fed.ndp.ca>

Green Party Leader Elizabeth May
Email: <leader@greenparty.ca>

If you have time, also write to the:
House of Commons Finance and Industry Committees
6th Floor, 131 Queen Street
Ottawa, Ontario K1A 0A6 
Fax: (613) 947-9670
Email: fina@parl.gc.ca and indu@parl.gc.ca

and

Senate Committee on Banking, Trade and Commerce
Senate of Canada
Ottawa, Ontario, K1A 0A4
Fax: (613) 947-2104
Email: banking_banques@sen.parl.gc.ca