For more than 40 years, U.S. government has required banks to disclose lending and service records by race, gender, income and neighbourhood
Canadian governments have done nothing to stop bank discrimination, and are also years behind in key measures to stop police discrimination
FOR IMMEDIATE RELEASE:
Tuesday, June 16, 2020
OTTAWA – Today, Democracy Watch announced that more than 90,000 people from across Canada have joined its letter-writing campaign and/or signed its Change.org petition calling on all federal parties to work together in this minority government situation to enact key measures to stop Canada’s big banks from discriminating against any customer, and to do more to help Canadians and small businesses, and pay their fair share of taxes, now and after the coronavirus crisis.
For more than 40 years, U.S. has required under the Community Reinvestment Act (CRA) banks to disclose their lending and service record by race, gender, income and neighbourhood, and required them to take corrective action if they are found to be discriminating against any of their customers.
The CRA needs to be strengthened, but since the 1980s it has resulted across the U.S. in trillions of dollars of lending to credit-worthy visible minorities, women entrepreneurs, and has also helped ensure low-income neighbourhoods have access to banking services instead of finding only predatory payday lender outlets in their area.
In contrast, despite broad support across Canada for key changes for more than 20 years (mainly by the Canadian Community Reinvestment Coalition (CCRC) organized by Democracy Watch), Canadian governments have done nothing to stop discrimination by our big banks.
Canada’s Big Banks track their lending and service by the characteristics of customers – they could easily be required to disclose this information as part of their annual Public Accountability Statements, just like U.S. banks are required to do annually. In fact, four of Canada’s Big 6 Banks own and operate U.S. banks that are required to comply with the Community Reinvestment Act — Bank of Montreal (BMO) owns BMO Harris Bank, Canadian Imperial Bank of Commerce (CIBC) owns CIBC U.S., Royal Bank of Canada (RBC) owns City National Bank, and Toronto-Dominion Bank (TD) owns TD Bank.
As well Canadian governments have done nothing to stop gouging by our big banks. Canada’s Big 6 Banks reported record profits of more than $46 billion in 2019 – the 10th year in a row, and more than double their 2010 profits. The Big 6 Banks reaped record profits every year for the past 10 years in part by firing thousands of people, shifting jobs overseas (or using temporary foreign workers), cutting services, and hiking fees and credit card interest rates even as the Bank of Canada’s prime rate dropped to record low levels.
The Big 6 Banks also paid their CEOs a total of $75 million in 2019 in salary and bonuses (an average of $12.5 million). (See Canada’s Big Banks Backgrounder)
Finance Minister Bill Morneau has boasted that the federal government negotiated with the Big 6 Banks to temporarily cut some credit card interest rates for some customers (but not for small businesses) who request a deferral for a couple of months, and to process small business loans funded by the government (which are not being used very much by many small businesses), in addition to the up-to-6-month mortgage and loan deferrals and fee reductions the banks have already offered (but again, only for some customers, with the delayed amount still required to be paid later, plus interest).
However, Prime Minister Trudeau stated on April 6th that “we need to see even more action like this going forward because this is a time to think about each other, not about the bottom line.”
“The federal government cannot tell if the banks are still gouging or treating customers unfairly in this crisis, and won’t be able to tell post-crisis, because the banks are allowed to keep secret the profit levels in each area of their business, what type of borrowers they approve and reject for loan and credit relief, and how many complaints they are receiving,” said Duff Conacher, Co-founder of Democracy Watch. “As the U.S. did more than 40 years ago, the federal government must require the banks to disclose this information and more to ensure the banks give everyone who needs it a real break in their loan and credit card payments during the crisis, and serve everyone fairly and well at fair interest rates and fees that give the banks a reasonable profit and not excessive gouging profit levels.”
“The federal Conservatives and Liberals have done nothing since 2010 to stop Canada’s big banks from hiking fees and credit card interest rates to gouge Canadians and more than double their profits to the highest levels of banks world-wide, while reducing service, treating many customers unfairly, and exploiting loopholes to lower the amount they pay in taxes,” said Conacher. “In this time of crisis, and with the minority government, all parties must work together to make key changes to make banks help more now, to finally stop their excessive profits, gouging and abuse of consumers, and to make banks pay their fair share in taxes.”
Just like the initial spending actions taken by the federal and provincial governments were not enough to address the coronavirus crisis, the banks must do more. The Big 6 Banks’ decade of record profits and cuts to their prime lending rates show that they can afford to cut interest rates much more on loans like mortgages etc., and also to cut fees much more, and not raise them again to their gouging, excessive profit levels.
As well, enforcement measures and penalties also need to be strengthened to ensure banks, and other financial institutions, serve everyone fairly and well at fair prices (See Backgrounder on Weak Enforcement).
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FOR MORE INFORMATION, CONTACT:
Duff Conacher, Co-founder of Democracy Watch
Tel: (613) 241-5179
Democracy Watch’s Big Banks Coronavirus Accountability Campaign