On October 25, 2016, Bill C-29 received first reading. Division 5 of Part 4 of Bill C-29 amends the Bank Act to consolidate and streamline provisions that apply to a bank or an authorized foreign bank in relation to the protection of customers and the public. The proposed amendments set out the principles upon which the provisions are based as well as their purpose, and implement enhancements in the areas of corporate governance, access to basic banking services, disclosure of information, business practices and public reporting. Bill C-29 also makes a consequential amendment to the Financial Consumer Agency of Canada Act.

Dealings with Customers and Public

Bill C-29 amends the Bank Act by adding a new Part XII.2 titled “Dealings with Customers and Public” and, as the name suggests, this new part consolidates the existing consumer protection provisions as well as introduces new provisions.

The purpose of this new Part is stated as, among other things, to set out a comprehensive and exclusive regime in relation to an institution’s dealings with its customers and the public in relation to banking products and services in order to (a) provide those customers and the public with uniform protection on a national level; (b) allow the institution to carry on the business of banking, consistently and efficiently on a national level; and (c) ensure the uniform supervision of institutions and enforcement of provisions relating to the protection of their customers and of the public.

Unsurprisingly perhaps to most commentators and observers, one of the purposes of these amendments is to provide an “exclusive” federal consumer protection regime (in the relevant part, Bill C-29 introduces the following language to the Bank Act: “This Part is intended to be, except as otherwise specified under it, paramount to any provision of a law or regulation of a province that relates to the protection of consumers or to business practices with respect to consumers.”).

Implications

The proposed amendments to the Bank Act require further analysis to fully assess the impact on Canadian banks and authorized foreign banks. At a high level, if the amendments work as they are intended, they would eliminate some uncertainty on the question of whether banks are required to be dual compliant with both federal and provincial consumer protection laws. We will be conducting further analysis on this topic in the coming days.