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Backgrounder – Full List of Key Bank Accountability Changes

(April 2020)

Democracy Watch’s letter-writing campaign and petition call for the following key bank accountability changes needed to make Canada’s Big Banks give everyone a break on interest rates and fees, pay their fair share in taxes, and treat everyone fairly, now and after the coronavirus crisis is over:
  1. Require banks to cut all their interest rates and fees in half now, and to cut loan payments entirely for anyone who needs it for the next few months, without requiring payment or extra interest later;
  2. Require banks to disclose the profit level of every part of their business (credit cards, mortgages, lines of credit, each other type of loan, bank machines, and investment and insurance divisions) after fully independent audits (overseen by the Auditor General);
  3. Require banks to keep all their interest rates and fees at a level that gives them no more than a reasonable profit (for example, many U.S. states cap credit card interest rates);
  4. Require banks to disclose detailed information how many people and small businesses apply for credit cards and loans or all types, and loan interest rate cuts or other relief, and accounts, and how many are approved and rejected, by type of borrower and customer, and require corrective actions if a bank discriminates against any type of borrower or customer (as the U.S. has required banks to do for 30 years);
  5. Require the Big 6 Banks re-open basic banking branches in neighbourhoods where they closed them in the 1990s to help get rid of predatory pay-day loan companies (and low-cost banking at Canada Post outlets should also be allowed);
  6. 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/);
  7. Strengthen key consumer protection rules, and require the Financial Consumer Agency of Canada (FCAC) to do unannounced, mystery-shopper audits to find violations, and to identify violators and fine them (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);
  8. Require all banks to be covered by the Ombudsman for Banking Services and Investments (the Finance Minister has done nothing to require TD, Royal, Scotiabank or National Bank to stop using their own complaint judges and return to OBSI) and make OBSI’s rulings binding;
  9. Require the FCAC to name every bank and financial institution that it finds has violated any rule and, given the big banks each make billions in profit annually, to fine violators a minimum of $1 million on a sliding scale for various violations, and increase the maximum fine for violations to $50 million, which should be high enough to discourage violations;
  10. Close all the loopholes that allow Canada’s banks (and other big businesses) to evade paying taxes in Canada by pretending they make their money through companies they own in low-tax countries, and impose a special tax (as England and Australia have) on any Canadian business or bank that has excessively high profits like Canada’s Big Banks have had in the past several years, and;
  11. Require the Big Banks and other financial institutions to cut the pay of their CEO and other top executives to no more than 40 times their lowest paid employee (as in some European countries).
For more information, see Democracy Watch’s
Big Bank Coronavirus Accountability Campaign