MEDIA RELEASE

COALITION CALLS ON GOVERNMENT TO ENSURE ACCESS TO BASIC BANKING SERVICES

OTTAWA - Today, the Canadian Community Reinvestment Coalition (CCRC) released its second position paper, calling on the federal government to enact legislation that will ensure all residents of Canada access to basic banking services. The position paper sets out the problems with the current access system and concludes that the action taken by the federal government to date will not solve the problem of lack of access for many Canadians, especially those with low incomes.

Nationwide surveys conducted in the past few years have concluded that over 3% of adult Canadians do not have an account, including 8% of Canadians with an annual income of less than $25,000 (at least 400,000 adults). The federal government and Canada's major banks finally recognized the problem and reached an agreement last February that the banks would lower the barriers to access by reducing identification requirements to two pieces (with photo ID not mandatory), and eliminating requirements that the customer be employed and maintain a minimum balance in the account. This agreement, however, is completely voluntary, applies only to the banks, and does nothing to ensure that banks do not place excessive holds on deposited funds or charge excessive fees.

The results of an informal survey of branches of the major chartered banks in Canada conducted by the CCRC revealed that the banks are still distributing information suggesting that photo ID, maintaining a minimum balance, and employment are still required to open an account. In addition, some financial institutions are using credit checks as a substitute barrier to access.

"Financial institutions cannot be trusted to solve this problem voluntarily," said Duff Conacher, Chairperson of the CCRC, "The federal government must legislate the right to access, setting out in detail the limits on requirements for ID, employment, minimum balances, credit checks, holding of deposited funds and service fees. The government must also ensure that independent and effective monitoring of the problem occurs, and that penalties for non-compliance are sufficient to discourage practices which deny access to basic banking services unjustifiably."

Informal Survey on Access to Basic Banking Services (October 1997)

The Canadian Community Reinvestment Coalition (CCRC) has surveyed branches of all of the Big 6 banks (Bank of Montreal, CIBC, Bank of Nova Scotia, National Bank, Royal Bank, Toronto-Dominion Bank) to find out if they are following the February 1997 agreement the major banks made with the federal government to lower barriers to access to basic banking services. The survey results showed that 5 of the Big 6 banks violated the February 1997 agreement, as follows:

Bank of Montreal An associate of the CCRC sent us in September a form that the Guildford Town Centre branch in Vancouver is giving to people opening a new account. The form (copies of which are available from the CCRC) states that photo identification is required and a minimum balance of $100 must be maintained for 6 months. These two requirements violate the February 1997 agreement. In addition, the branch requests authorization to conduct a Credit Bureau Report, which can easily be used as a substitute barrier to access.

CIBC In response to queries made in person about the requirements for opening an account, Dominique Robinson, Customer Access Representative at the Rideau and Sussex branch in Ottawa (Tel: (613) 564-8751), stated that three pieces of identification are required including one piece of photo ID. This requirement violates the February 1997 agreement.

Bank of Nova Scotia In response to queries made in person about opening an account, the service representative at the Rideau branch in Ottawa (Tel: (613) 564-6023), stated that three pieces of identification are required including one piece of photo ID. This requirement violates the February 1997 agreement.

National Bank In response to queries made in person about the requirements for opening an account, the service representative at the Rideau St. branch in Ottawa (Tel: (613) 241-9110), stated that two pieces of identification are required, with one piece of photo ID preferred but not required. This was the only bank of the Big Six that did not violate the February 1997 agreement in this survey.

Royal Bank In response to queries made in person about opening an account, the service representative at the 90 Sparks St. branch in Ottawa (Tel: (613) 564-3100), stated that three pieces of identification are required including one piece of photo ID. The bank also handed out a form that strongly suggests that employment is required. The form also states that photo ID is preferred (not required) but the service representative stated that one piece of identification had to be photo ID. These requirement violate the February 1997 agreement. In addition, the branch requests authorization to conduct a Credit Bureau Report, which can easily be used as a substitute barrier to access.

Toronto Dominion Bank In response to queries made in person about the requirements for opening an account, Gabi Burton, Personal Banker at the Rideau and King Edward branch in Ottawa (Tel: (613) 783-6230), stated that three pieces of identification are required including one piece of photo ID. This requirement violates the February 1997 agreement.