(September 2026)
Both watchdogs too weak in powers, and enforcement attitude, to protect financial consumers and investors
The federal government’s Financial Consumer Agency of Canada (FCAC) has a very weak enforcement record since it was created in 2001.
It has made only 150 compliance rulings. Prior to 2019, the FCAC was not allowed to publicly identify a bank even if the bank violated the Bank Act and was fined for its violation The bank could only be identified if the FCAC prosecuted the bank, and since 2001 the FCAC has only prosecuted two banks (neither of them a Big 6 Bank).
The FCAC not only lacks resources by comparison to the similar watchdog agencies in Britain and the U.S., it is also clearly a lapdog compared to these two other agencies.
According to an article by Reuters in March 2017, and Democracy Watch’s research of fines imposed since then, the FCAC has issued fines totalling just $34 million since 2001 in the 150 rulings it has issued. Before 2001, there were essentially no consumer protections, and no penalties for harming consumers, in Canada’s Bank Act. From 2001 to 2007, the FCAC was only allowed to penalize a bank a maximum of $100,000 no matter how much a bank abused or harmed its customers, and no matter how many customers were harmed. The maximum fine was increased to $200,000 in 2007, and then to $500,000 in 2012, and then to maximum $10 million in April 2020. Out of the total of $34 million in fines that the FCAC has imposed since 2001, almost all the fines have been imposed since August 2020 ($31 million has been imposed since September 2022, and another $2.7 million was imposed from August 2020 to December 2021). All of the above facts and figures show just how weak and ineffective the FCAC’s enforcement was before 2020.
However, the FCAC is still weak and ineffective. Given Canada’s Big Banks each make on average more than $10 billion in profits each year, the maximum fines before 2020 were ridiculously low and essentially meaningless, especially if the bank made more than a few hundred thousand dollars by violating the Bank Act. The current maximum $10 million fine is still too low as it is only a possible maximum fine (the FCAC has never fined a bank more than $6.5 millIon), and even if the maximum fine was ever imposed by the FCAC, it would only amount to about 0.1% of the average annual profits of any of Canada’s Big Banks.
This shows clearly that the Liberals and Conservatives, which been the parties running the federal government in Canada became a country, care very little about protecting the 28 million customers of Canada’s Big Banks, and are dedicated instead to protecting multi-millionaire bank executives from accountability for the harms their banks cause to financial consumers.
In contrast, since 2013 when it was created until the end of 2024, Britain’s Financial Conduct Authority (FCA) issued penalties totalling 4.9 billion pounds ($9.15 billion Can.), and since 2011 when it was created up to January 2025, the U.S. Consumer Financial Protection Bureau (CFPB) imposed penalties totalling more than $5 billion U.S. (more than 7 billion Can.) and an additional more than $21 billion U.S. (more than $29 billion Can.) in compensation and cancelled debts for financial consumers that have resulted from CFPB enforcement actions, for a total of more than $34 billion U.S. ($47 billion Can.) in total accountability for U.S. banks.
Key consumer protection rules need to be strengthened, and the FCAC must be required to do unannounced, mystery-shopper audits to find violations, required to publicly identify financial institutions who violate the rules, and required to impose high fines on violators. The FCAC hasn’t done unannounced audits since 2005, tipped off the banks in March 2017 about the audit they did through the rest of 2017 on abuses, and then allowed the banks to see the draft audit results and suggest changes that weakened the report.
Meanwhile, former Finance Minister Jim Flaherty, and former Finance Minister Bill Morneau, did nothing, and former Finance Minister Chrystia Freeland moved as slowly as possible to require TD, Royal, Scotiabank or National Bank to stop using their own complaint judges and return to the Ombudsman for Banking Services and Investments (OBSI — which finally happened in November 2024).
All banks and investment companies should be required to use OBSI, and allow financial consumers and investors to complain directly to OBSI without having to go through a financial institution’s internal complaint system, and OBSI’s rulings on complaints by bank customers and investors must be made binding in every case.
An FCAC report released in February 2020 showed that the banks have a horrible record of dealing with financial consumer and investor complaints, especially the banks that use their own complaint judges.
To ensure all violations of consumer rights and protections are effectively discouraged by high, mandatory penalties, and to ensure the watchdogs actually penalize violations, the OBSI and the FCAC and (in the case of prosecution) the courts must all be required to to impose a minimum fine of at least $1 million for each violation, and to impose a sliding scale of required higher fines that increase based on the seriousness of each violation, and must be required to impose a $50 million fine for each most serious, systemic violation. And they must be required to name and shame the violating bank each time they impose a fine.
The Financial Consumer Agency of Canada (FCAC) and the Ombudsman (OBSI) will continue to be ineffective until the federal government gives them key powers and requires them to use those powers to audit banks and other financial institutions regularly and to penalize every violation with a high fine (there should be minimum fines for various violations of at least $1 million, and the maximum fine should be $50 million) and public naming and shaming.
Finally, the federal government should establish national consumer and individual investor watchdog groups using a proven, low-cost and effective method. To ensure the FCAC and OBSI do their jobs properly, and to ensure that financial consumers and investors have help when complaining to the FCAC and OBSI, require banks, trust and insurance companies to promote in their mailings and emails to customers that they can join an independent, consumer-run Financial Consumer Organization (FCO – as recommended in 1998 by the MacKay Task Force, and the House Finance and Senate Banking committees) so consumers have a place to call for help if they are gouged or treated unfairly, and to get fully independent, expert advice (See details at: https://democracywatch.ca/question-and-answers-about-the-proposed-financial-consumer-organization/). Also, banks and the largest mutual fund companies must be required to promote in their mailings and emails to customers that they can join an independent, consumer-run Individual Investor Organization (IIO – as recommended by an Ontario legislative committee in 2006) so they have have a place to call for help if they are ripped off or treated unfairly, and to get fully independent, expert advice (See details at: https://democracywatch.ca/question-and-answers-about-individual-investor-organization-iio/).
For more information, see Democracy Watch’s
Bank Accountability Campaign
