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MEDIA RELEASE

COALITION CALLS ON MINISTERS TO ENDORSE FINANCIAL CONSUMER GROUP AT P.E.I. MEETING

OTTAWA - Today, the nation-wide Canadian Community Reinvestment Coalition (CCRC) called on the federal, provincial and territorial consumer ministers to endorse the proposal for the creation of a Financial Consumer Organization (FCO) in Canada at their meeting in Charlottetown, P.E.I. tomorrow and Friday (November 12-13). The federal Task Force on the Future of the Financial Services Sector endorsed the FCO proposal in its final report released in September, recommending that "governments and financial institutions should work with the sponsors to facilitate the organization's success." (Task Force recommendation 56(a))

Federal Industry Minister John Manley has publicly stated his support for the FCO idea, and Ujjal Dosanjh, B.C. Attorney General (and Minister for consumer issues), proposed the creation of an FCO to the other consumer ministers at their meeting last year in Regina. At that meeting, the ministers agreed to study the proposal and consider it further at this year's meeting.

"The FCO will be a self-sustaining, member-based organization that will provide needed help to financial consumers and encourage competition in the marketplace, and it can be created at little or no cost to government or financial institutions." said Duff Conacher, Chairperson of the CCRC (made up of over 100 consumer, community and labour groups representing over 3 million Canadians from every province and the Northwest Territories).

The FCO will be created through enclosing a one-page flyer periodically in the envelopes banks, trusts, insurance companies and other financial institutions use to mail out their monthly statements, credit card bills, and insurance premium statements. The flyer will invite customers to pay an annual membership fee ($20-30) to join the FCO. This innovative mechanism has been used very successfully to help residential utility ratepayers band together in some U.S. states to hold utilities accountable to their interests. The flyer would be sent out at no cost to financial institutions or governments.

If only 3 to 5 percent of financial consumers signed up (the same response rate as the U.S. groups), the FCO would have between 600,000 and one million members and an annual budget from membership fees of between $12 million and $20 million. The FCO would be governed democratically by the members, would provide many services to consumers, and would also act as an umbrella group and provide grants to existing groups that work on financial services issues.

The FCO proposal is also supported by a majority of Canadians, according to a national survey of over 2,000 people conducted by Environics Research Group, and a majority of existing and citizen advocacy groups, according to a national survey of groups (For copies of the surveys, contact the CCRC).

According to the surveys, 64% of Canadians and citizen groups also want the government to require the financial institutions to enclose the FCO flyer in the mailings if the institutions refuse to do so voluntarily. The CCRC has asked all large financial institutions in Canada, and the main financial industry associations, to enclose the FCO flyer voluntarily, and all have refused.

"We call on Canada's consumer ministers to heed the call of the majority of Canadians and citizen groups, and the federal financial services Task Force, by endorsing the Financial Consumer Organization proposal," said Duff Conacher, Chairperson of the CCRC.