MEDIA RELEASE

Monday, December 6, 2004

OTTAWA - Today, with Canada’s big six banks reporting a new record total profit of $13.3 billion, the Canadian Community Reinvestment Coalition (CCRC) called on federal Finance Minister Ralph Goodale and Industry Minister David Emerson, and the whole federal Cabinet, to fulfill their responsibilities of protecting financial consumers by requiring banks to prove their branch closures have been justified, and to prove that their credit card interest rates and service charges do not amount to gouging.  Many federal Liberals, including former Secretary of State for financial institutions John McCallum (now Revenue Minister) have expressed concerns in the past decade about banks’ gouging and withdrawal of branches from communities, but the Liberals have done little to stop such unfair business practices.
 
“No corporation has a right to gouge or withdraw service unfairly, especially when providing an essential service such as banking,” said Duff Conacher, Coordinator of Democracy Watch and Chairperson of the CCRC.  "But the federal Liberals have allowed Canada’s super-rich big banks, their largest donors, to treat 20 million Canadian bank customers pretty much however they want."

Every poll conducted in the past decade has shown that 90% of Canadians believe banking is an essential service similar to heat, electricity, and phone service, but while companies providing those services are required by law to prove their prices are fair and to provide services across the country, the federal Liberals have allowed banks to charge whatever they want for most services, and to close branches in many, mostly low-income communities (creating a huge growth in even-worse-gouging cheque-cashing outlets).

The only protections in these areas the Liberals have passed are requirements that all of the banks provide a low-cost, no-frills bank account (which the banks have responded to by increasing charges in many other areas) and to give four to six months notice and consult with the community before closing a branch.  Parliamentary hearings into credit card gouging begun in February 1997 were never completed.

The CCRC wants the government to require banks to:

• disclose the profit/loss record, and record of demand for service, for the last five years of operations for branches closed in the past 10 years, and;
• in their quarterly and annual reports, to disclose the profit margin for their credit card division and each service division (in-branch, machine, telephone, and Internet banking).