Today, the Honourable Chrystia Freeland, Deputy Prime Minister and Minister of Finance, announced new measures to ensure Canadians are treated fairly by their banks. These measures include protecting Canadians from rising mortgage payments, enhancing low-cost banking options, lowering non-sufficient fund (NSF) fees and ensuring Canadians have an impartial advocate when they have complaints with their bank. These newest measures to make banking more affordable continue the government's action to bring down inflation and stabilize prices for Canadians.
First, to protect Canadians from rising mortgage payments, the Deputy Prime Minister reported that on October 6, 2023, she met with the CEOs of Canada's largest banks and outlined her expectations that they abide by the government's new mortgage guideline issued by the Financial Consumer Agency of Canada (FCAC). The government's expectations for financial institutions are outlined in FCAC's Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances, which directs banks to proactively work with mortgage holders at risk of default on their principal residence to provide tailored mortgage relief. The Deputy Prime Minister emphasized to the bank CEOs that she will be closely monitoring the banks' compliance.
Second, to make banking more affordable for Canadians, the Deputy Prime Minister announced that the government is taking action to secure enhanced low-cost and no-cost account options from Canada's banks. The Deputy Prime Minister has directed FCAC to work with financial institutions to improve the features of low-cost accounts to reflect the realities of modern banking, such as providing additional debit transactions, online bill payments, and e-transfers with no extra fees. FCAC will also work to expand no-cost account eligibility to more Canadians, as well as to expand these enhanced affordable banking options to more banks.
Third, the government is making progress in cracking down on junk fees, starting with the NSF fees charged by banks, which particularly impact low-income Canadians. These fees, currently as high as $50, disproportionately impact the financial well-being of Canadians who may be living paycheque to paycheque, or do not have access to overdraft protection when their bills come due. The Deputy Prime Minister has issued direction to lower NSF fees and an update on this work and further actions to crack down on junk fees will be announced in the Fall Economic Statement.
Fourth, to support Canadians who believe they have been treated unfairly by their bank, the Deputy Prime Minister has designated an independent and transparent not-for-profit organization, the Ombudsman for Banking Services and Investments (OBSI), as the single external complaints body for Canada's banking sector. For too long, banks have been able to choose who adjudicated complaints that Canadians have had with their bank. Canadians deserve an impartial advocate that will work on their behalf. Over the next year, OBSI will transition to better serve Canadians in dealing with their complaints in a timely, effective, and fair manner. Starting November 1, 2024, the strengthened OBSI will have jurisdiction to resolve complaints at all Canadian banks.
The government will continue fighting for Canadians by using every available tool to help bring down inflation and make life more affordable.
