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MEDIA RELEASE

OTTAWA - Today, the Canadian Community Reinvestment Coalition (CCRC) released its recent national survey on how financial institutions are providing access to basic banking services.
 The survey report, entitled Access Denied: The Failure of Voluntary Measures to Improve Banking Services, reveals the wide gap between bank rhetoric and reality in terms of serving Canadians fairly and well. Of the 103 branches of 10 financial institutions surveyed in 11 cities across seven provinces and the Northwest Territories, 99 (96%) violated the voluntary code on lowering barriers to access to basic banking services that Canada's big banks negotiated behind-closed doors with the federal government in early 1997. These results are worse than the results of similar surveys conducted in the past few years.
 The institutions violated the voluntary code by requiring more than two pieces of ID, photo ID or employment to open an account or cash a cheque. In addition, several branches required that account applicants submit to a credit check or provide a copy of their lease, both of which are unnecessary and unreasonable requirements for opening accounts. As well, excessive hold periods for deposited cheques were quite common, in some cases as high as 30 days.
 "The survey clearly shows the failure of voluntary measures to improve banking services in Canada," said Duff Conacher, Coordinator of Democracy Watch and Chairperson of the CCRC. The survey report condemns the use of ineffective voluntary measures, and calls for several changes to financial institution laws to ensure access to banking service, as follows:

• creating a right to a low-cost account, as exists in several U.S. states and France;
• prohibiting arbitrary credit checks;
• limiting holds on cheques, as in the U.S.; and
• requiring a public review of branch closures.

 In order to ensure that these laws are enforced and consumers are served fairly and well across Canada, the report also recommends:

• the creation of a consumer-directed and funded Financial Consumer Organization (based on similar organizations created in some U.S. states);
• setting up a lending, investment and service disclosure and review system to track institutions' performance in serving individuals, businesses and communities (as the U.S. has had for over 20 years);
• the appointment of an independent and effective banking ombudsman, as in Britain and Australia; and
• significant penalties for violations, as in the U.S., Britain and Australia.

 The CCRC has set out these proposals in seven position papers submitted to the federal Department of Finance over the past two years during consultations on changes to financial institution laws. The CCRC's proposals are broadly supported by Canadians, and have been endorsed by the Task Force on the Future of the Canadian Financial Services Sector (the MacKay Task Force) in its September 1998 report, and by the Senate Committee on Banking, Trade and Commerce and the House of Commons Standing Committee on Finance in their December 1998 reports reviewing and responding to the MacKay Task Force report.
 This Friday, federal Finance Minister Paul Martin will release a policy paper that will set out his response to the consultations and task force and committee reports, and set the basis for changes to financial institution legislation this fall.
 In view of the CCRC's national survey results, the CCRC called for an immediate meeting with Paul Martin to ensure that his policy paper does not propose voluntary measures as a means of solving the severe problems revealed by the survey, and to ensure that the paper addresses all of the CCRC's proposals.
 "Financial institutions cannot be trusted to serve Canadians fairly and well on their own," said Conacher. "If Paul Martin does not legislate our proposed rights for financial consumers and responsibilities for financial institutions, it will clearly show that he does not care at all about the many problems faced by financial consumers across Canada."