MIL-OSI Translation: Opening speech before the Senate Standing Committee on National Finance (NFFN) by Werner Liedtke, Acting Commissioner

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MIL OSI Translation. Canadian French to English –

Source: Government of Canada – in French

May 28, 2024

Ottawa, Ontario

The speech delivered is authentic

Thank you, Mr. Chairman, for this presentation, and thank you to the committee for inviting us to come and testify before you today.

My name is Werner Liedtke. I am the interim commissioner of the Financial Consumer Agency of Canada, or FCAC.

I will begin by giving you an overview of my organization’s mandate.

The FCAC is an independent federal agency that protects the rights and interests of consumers of financial products and services.

We fulfill our mandate in two main ways.

First, as a regulator, we monitor the compliance of federally regulated financial entities, such as banks, with consumer protection measures set out in legislation, public commitments and codes of conduct.

Second, we strive to strengthen the financial literacy of Canadians by collaborating with stakeholders and conducting research and education activities. In addition, we monitor trends and issues affecting consumers of financial products and services.

At FCAC, we are pleased that the financial well-being of Canadians is such an important part of Budget 2024.

The budget includes several important initiatives that concern our organization. In particular, it gives it a new role and an expanded mandate.

As a leader and innovator in protecting consumers of financial products and services, FCAC is well positioned to take on this new responsibility.

We are working closely with the Department of Finance to advance the Canadian People’s Banking Framework, which prioritizes innovation while providing robust and consistent protections for Canadians who will use banking services for the people.

This new framework is guided by three objectives:

security and solidity,

protecting the financial well-being of the Canadian population,

as well as the promotion of economic growth and international competition.

Banking for People will enable consumers to securely use data-driven financial services that can help them better manage their finances and improve their bottom line.

Over the coming months, we will also work closely with the Ministry of Finance to engage the financial sector and other stakeholders in developing common rules for banking services for people as we move closer to implementation of the Framework.

I would now like to talk about the commitment to low-fee bank accounts and no-fee bank accounts that was mentioned in the budget.

In the fall of 2023, the Minister of Finance asked FCAC to work with banks to update the original 2014 commitment on low-fee and no-fee accounts.

We were given the mission to expand the features of low-fee accounts to reflect modern banking needs, to make no-fee accounts accessible to a greater number of Canadians, and to ensure that the list of financial institutions who subscribe to the commitment extends for the updated version.

FCAC met with financial institutions, consumer financial experts and other stakeholders. She also solicited public input and conducted research on consumer awareness and needs.

Our research shows that vulnerable consumers, in particular, clearly want access to fee-free accounts.

We are committed to moving forward and are hopeful that, through industry collaboration, an enhanced commitment can be voluntarily implemented.

Regarding people in vulnerable situations, Budget 2024 also includes a commitment to strengthen the Canadian Mortgage Charter to provide more support to Canadians facing mortgage difficulties.

Although the Mortgage Charter is a Ministry of Finance initiative, it is complementary to FCAC’s Guideline on Existing Consumer Mortgages in Exceptional Circumstances, which came into force in July 2023.

The Mortgage Charter reinforces the expectation of the Department of Finance and the FCAC that banks should support mortgage holders facing financial difficulties.

The additional measures proposed to strengthen the application of the criminal interest rate by making amendments to the Criminal Code and intensify the government’s fight against predatory loans are other budgetary commitments that interest us greatly.

Although payday loans fall under provincial and territorial jurisdiction, we conduct research to better understand the issues and trends affecting Canadian consumers of financial products and services.

FCAC research shows that payday loan users are often unaware of the high cost of these loans compared to other sources of credit.

The proposed amendments to the Criminal Code and the plans to crack down harder on predatory lending are important measures to better protect consumers of financial products and services, particularly those in more vulnerable situations.

At the same time, the budget also mentions measures to cap non-sufficient funds charges and other similar charges.

FCAC welcomes this decision and will work with the Department of Finance to better understand how the updates planned in the budget fit with FCAC’s own work, including the Financial Consumer Protection Framework .

Finally, I would like to mention the budget proposal to provide Prosper Canada with funding of $60 million over five years.

FCAC has long emphasized the need to fund community organizations like Prosper Canada that work directly with Canadians to help them improve their financial well-being.

Prosper Canada is an important partner in delivering FCAC’s National Financial Literacy Strategy.

This proposed initiative is part of the National Strategy’s “ecosystem” approach, and will provide Canadians with access to the tools and information they need to strengthen their financial resilience.

In conclusion, Budget 2024 includes many important and timely initiatives related to FCAC that touch on either the regulatory or financial literacy aspects of our mandate.

I look forward to your questions. Thank you for your attention.

EDITOR’S NOTE: This article is a translation. Apologies should the grammar and/or sentence structure not be perfect.

MIL Translation OSI