Compliance Regime for Canadian Banks Tightened

The Bank Act, the primary legislation governing banks and federal credit unions in Canada, has undergone a revamp to ensure greater consumer protection. The Financial Consumer Agency of Canada (FCAC), responsible for administering designated consumer provisions, is now more vigilant than ever in monitoring compliance with codes of conduct and public commitments.

New Provisions Under Scrutiny

• Sections 157(2)(e), 195.1, 273.1, 627.02 to 627.998, and 979.1 to 979.4 of the Bank Act
• Regulations made under or for the purposes of those provisions

These sections are now subject to closer scrutiny, ensuring that banks and federal credit unions adhere to higher standards.

Increased Transparency Required

• Sections 992 to 1003 of the Bank Act have been applied to any notice, document, or other information required under the designated consumer provisions
• Banks and federal credit unions must be more transparent in their dealings with customers

The FCAC has issued several regulations to ensure compliance with the new regime. These include:

Regulations Issued by FCAC

• Electronic Documents (Banks) Regulations
• Financial Consumer Protection Framework Regulations
• Prescribed Deposits (Authorized Foreign Banks) Regulations
• Prescribed Deposits (Banks without Deposit Insurance) Regulations
• Prospectus (Federal Credit Unions) Regulations

Impact on the Banking Industry

The revised Bank Act is expected to have a significant impact on the banking industry in Canada. With increased oversight and stricter regulations, consumers can expect greater protection from financial institutions.

Overall, the tightened compliance regime aims to provide enhanced consumer protection, ensuring that banks and federal credit unions operate with transparency and integrity.