Canada announces ‘consumer-friendly’ bank regulations

Canada, 10th March: Canada has announced new ‘consumer-friendly’ bank measures which will increase restrictions for Canadian banks.

The announcement was made by Canada Minister of State for Finance, Ted Menzies in Toronto on 8th March, 2011.

As per the new Access to Funds Regulations, the time taken by banks for holding of funds before the clearance of a cheque has been reduced from seven days and limited to a maximum period of four business days for amount of $1,500 or below.

And the customers depositing a cheque in the bank will get the provision of withdrawing first $100 instantly. In case of cheques deposited by consumers at any ATM, the amount of $100 will become available the very next day.

Meanwhile, cheques exceeding $1,500 will be liable to the same earlier rules.

In addition, new Negative Option Billing rules were also announced by the Canadian government. As per these rules, all financial institutions which are federally regulated will need to seek the consent of the consumers before proceeding with any new optional service or product.

And the banks will have to provide details of the various costs and fees involved in such product or service.

This new ruling will prohibit Canadian financial institutions from enrolling consumers without getting their consent.

As per a recent survey by Canadian Payroll Association, nearly 59 percent of workers in Canada admit that a delay in their paycheque by a week might spell big trouble for them. Hence, a quick access to money is a great benefit for the customers.

Aim of new rules—

•    Menzies said the aim of the new rules for Canadian banks is to introduce greater transparency and to ensure that the consumers are aware of the new products or services being offered to them by financial institutions in Canada.

•    Consumers will get timelier access to their own money. This is a huge benefit for new customers of any bank in Canada including new businesses, students etc. who have recently opened their accounts in a bank, Mr. Menzies asserted.

The latest rules are, however, subject to a comment period of one month beginning from Saturday. And the new rules will get implemented soon after this period passes.