NEWS RELEASE

Wednesday, February 9, 2011

OTTAWA - Today, the Canadian Community Reinvestment Coalition (CCRC - Canada’s largest and leading bank accountability coalition) applauded all 30 of the recommendations in the report released by the federal Task Force on Financial Literacy and urged all Canadian governments and political parties to work together to implement them, but pointed out that the Task Force ignored the lowest-cost, most effective and broadly supported solution to financial illiteracy in Canada.

While the Task Force recommended many good, new financial literacy initiatives including increased requirements for financial institutions, it should have also included the recommendation made by the 1998 federal MacKay Task Force (which was endorsed by House and Senate committees in December 1998), that the federal government require banks and other financial institutions to facilitate the creation of a national financial consumer education and advocacy group by enclosing a one-page appeal pamphlet for the group in their mailings to customers.

The pamphlet would be included once a year in bank statement, credit card bill, and insurance policy statement envelopes mailed to more than 20 million Canadians, and would invite them to join the financial consumer organization (FCO).  If only five percent joined at annual membership fee of $40, the group would have one million members and an annual budget of $40 million to dedicate to financial literacy and education efforts -- To see details about this proposal on the Democracy Watch website, click here.

This pamphlet method would reach all Canadian households, and cost government and financial institutions nothing to implement because the FCO would pay the costs of printing the pamphlet and inserting it in the institutions' envelopes (no extra postage would be needed for the one-page pamphlet).

According to a national survey of Canadians, two-thirds of Canadians support the creation of a national FCO using the pamphlet method.

The Task Force on the Future of the Canadian Financial Services Sector recommended in its September 1998 Report that the federal government create a national FCO using the pamphlet method (See Recommendation #56(b) on page 208 of the Report).  The House of Commons Finance Committee, and the Senate Banking Committee, endorsed the Task Force recommendation in their December 1998 reports.

"If the federal government actually wants to solve financial illiteracy problems in Canada, and many other problems in the financial services marketplace, it must empower financial consumers by requiring financial institutions to facilitate the creation of a national financial consumer organization using the pamphlet method," said Duff Conacher, Coordinator of Democracy Watch and Chairperson of the CCRC.

The CCRC also proposes that the government's Financial Consumer Agency of Canada, and the financial institution ombudsperson agencies, be given the right by the federal government to enclose information pamphlets in financial institution mailings to inform consumers that they exist, and the services they provide -- To see details of all the CCRC's proposals, click here.