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Association of Canadian Financial Corporations' (ACFC) Submission in Response to Finance Canada's 2006 Review of Financial Sector Legislation:
May 31, 2005
Director, Financial Institutions Division
Financial Sector Policy Branch
Department of Finance
L'Esplanade Laurier, 20th Floor, East Tower
140 O'Connor Street
Ottawa, ON K1A 0G5
Dear Mr. Salembier:
Re: Consultation for the 2006 Review of Financial Institutions Legislation
The member companies of the Association of Canadian Financial Corporations (ACFC) have been serving Canadians for more than 70 years.
Membership in the ACFC is open to companies that act as financial intermediaries, or that finance retail installment sales and inventory, make or purchase unsecured and secured loans to consumers or industrial and commercial enterprises, own and lease property, and factor and finance industrial and commercial accounts receivable.
The current members of the Association are: 
- CitiFinancial Canada, Inc.
- HSBC Financial Corporation Limited
- Wells Fargo Financial Corporation Canada
Finance companies provide important financial services to Canadians including such products as small balance loans, private label retail sales financing and mortgages. Combined, the member companies serve 1.74 million customers and have $6.3 billion in assets. CitiFinancial's parent company is Citigroup Inc., Household Financial's parent company is HSBC Holdings plc and Wells Fargo Financial Corporation Canada's parent company is Wells Fargo and Company.
We are responding to the proposals contained in the above-noted consultation document. Our comments are as follows:
1. Electronic Transactions
The paper notes that the government is seeking views on how best to address disclosure and assignment of liability for all forms of electronic transactions.
The Consumer Measures Committee, with representatives from the provincial, territorial and federal government has developed an Internet Sales Contract Template whose basic principles could serve as a model for the development of disclosure rules for consumer Internet transactions for the financial institutions sector. The Committee is also developing a charge-back regime to be adopted by the credit card industry to address assignment of liability in the context of electronic transactions and other forms of remote contracts such as telephone transactions. It is vital to adopt harmonized rules for both provincially and federally regulated financial services sectors, in order to ensure a level playing field, and to enhance consumer protection by providing uniform rules of disclosure and liability. The enactment of different rules may result in consumer confusion and a diminished standard of protection depending on the jurisdiction of or regulatory authority over the transaction.
2. Residential Mortgages Exceeding 75 per cent of Property Value
The government is seeking views on the removal of the statutory restriction on residential mortgages exceeding 75 per cent of the value of the property. The ACFC supports the removal of this restriction.
3. Improvements to the Regulatory Approval Regime
The ACFC is in favour of removing approval requirements for routine transactions. This would ease regulatory and administrative burdens on financial institutions.
4. Consolidation of the Trust and Loan Companies Act and the Bank Act
The ACFC supports the consolidation of the Trust and Loan Companies Act and Bank Act, given the growing trend towards an integrated financial services regulatory framework. This proposal would increase both legislative and regulatory efficiency.
5. Special Security Regime
The ACFC supports the elimination of the Bank Act special security regime. This would ensure a level playing field for all creditors, with all secured transactions being subject to the same provincial or territorial security regime.
Original signed by
cc: ACFC Legal and Legislative Committee