Monday, February 26, 2007
OTTAWA - Today, the Canadian Community Reinvestment Coalition (CCRC) called on federal Finance Minister Jim Flaherty to hold his upcoming meeting with representatives of Canada’s big banks in public, not behind closed doors, and to let each bank know he wants answers at the meeting to 10 key questions about their operations, not just about bank fees.
The CCRC also called on the Senate Committee on Banking, Trade and Commerce to insist bank representatives answer the 10 questions when it holds hearings on Bill C-37 (which amends the Bank Act and other federal financial institution laws), and called on the House of Commons Finance Committee to also insist on answers to the 10 questions when it holds its upcoming hearings on banking fees. The CCRC testifed last Monday before the House Finance Committee on Bill C-37 (To see the CCRC's submission to the Committee, click here).
The federal Conservatives’ Bill C-37 changes federal financial institution laws including the Bank Act, but the bill contains only one consumer protection measure (reducing the time period banks can put a hold on a cheque to 4-7 days) and no significant bank accountability measures. As a result, Canada’s banking laws will continue to have key gaps that were closed 20 years ago in the U.S.
“If Finance Minister Flaherty is actually interested in holding the banks accountable he should meet with them in public, not behind closed doors, require them to answer questions not only about bank fees but also about their overall customer service, lending and investment records, and then take action to close key gaps in Canada’s bank accountability laws,” said Duff Conacher, Coordinator of Democracy Watch and Chairperson of the CCRC. "Talk is cheap, cheaper than many bank fees, and many finance ministers and politicians in the past 20 years have talked about holding banks accountable but haven’t done enough to ensure banks serve all Canadians fairly and well with fair prices and interest rates."
The 10 key questions the Finance Minister and the committees should require the banks to answer are as follows (and if the banks refuse to answer the Minister and committees should require disclosure of the information):
On banking fees and credit card interest rates
1. How many new fees has each bank introduced in the past 15 years in each area of their operations, what are the new fees, and how many fees has each bank increased in the past 15 years in each area of their operations, and what fees have been increased?will the banks agree to an independent annual audit (for example, by the Auditor General) of the profit they make from every fee in every area of their operations, and agree to lower any fee the audit finds excess profit?
6. How much has each bank’s credit card division cost, and produced in revenue and profit, each year for the past 15 years, and given that bank credit card interest rates have remained for the past decade at historically high levels when compared to the prime lending rate, will the banks agree to an independent annual audit (for example, by the Auditor General) of the profit they make from their credit card operations, and agree to lower interest rates if the audit finds excess profit?On bank lobbying, advertising, donating, and empowering bank customers
7. How much money does each bank spend each year on each of following three activities: 1. lobbying; 2. advertising, and; 3. donations (directly and through their foundations) and do the banks think it is fair that they charge their customers extra amounts for products and services in order to have this money to advance the banks’ agenda through lobbying, advertising and donations -- in other words, do they think it is fair that bank customers pay the banks’ costs of pushing the banks’ agenda?On accountability for bank service, lending and investment records
On processing cheques and other transactions
10. Given that most cheques are processed in one day, and many other payments are processed by the banks much more quickly than the time periods they actually use to give customers credit for deposits or payments or other transfers, will the banks agree to a regulated sliding scale of time limits for holds on cheques and payment processes that is stronger than the 4-7 day cheque hold limit contained in Bill C-37?“No corporation has a right to gouge, withdraw or withhold 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 new federal Conservatives have continued the Liberals’ and Progressive Conservatives’ past negligence by allowing Canada’s super-rich big banks to treat 20 million Canadian bank customers pretty much however they want, to do whatever they want with Canadians’ money, and to take over other companies even if it isn’t in the public interest."
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Copyright 2007 Canadian Community Reinvestment Coalition