Archived - Backgrounder:
Access to Funds Regulations and Negative Option Billing Regulations

Archived information

Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact us to request a format other than those available.

As users of financial services, consumers have a significant stake in almost all financial sector issues. As financial products and practices evolve, the impacts on consumers need to be monitored and consumers’ interests protected through regulatory action.

In Year Two of Canada’s Economic Action Plan, the Harper Government announced it would take action to prohibit negative option billing and require timelier access to funds. The two draft regulations would address these matters.

Access to Funds Regulations

In Year Two of Canada’s Economic Action Plan, the Government announced its continued commitment to ensure affordable access to basic banking services for all Canadians. To provide timelier access to funds, the Access to Funds Regulations would reduce the maximum cheque hold period for retail depositors and small- and medium-sized enterprises. The regulations would also provide retail depositors with timelier access to the first $100 deposited by cheque.

Specifically, the new regulations would reduce the maximum cheque hold period to four business days for cheques not exceeding $1,500. In addition, financial institutions would be required to provide immediate access to the first $100 deposited by cheque in person in a branch, and on the next business day for cheques deposited by any other means (e.g., automated teller machines).

The regulations would apply to regular paper-based cheques drawn on a financial institution located in Canada, deposited in Canada and issued in Canadian dollars.

Negative Option Billing Regulations

Year Two of Canada’s Economic Action Plan announced that the Government would bring forward regulations to prohibit negative option billing in the financial sector and require financial institutions to offer products and services on an opt-in basis only, where consumers have sufficient disclosure about the terms and conditions before accepting. 

The Negative Option Billing Regulations would require federally regulated financial institutions to first obtain consumers’ express consent before providing an individual with a new optional product or service, such as credit balance insurance or fraud alerts. The regulations would set out requirements for financial institutions to disclose a summary of the key information related to the optional product or service prior to obtaining the consumer’s express consent, including related fees and costs.

If consumers sign up for the optional products and services, federally regulated financial institutions would be required to provide comprehensive disclosure of the related terms and conditions. Furthermore, the regulations would require financial institutions to refund charges on a prorated basis following the cancellation of an optional product or service.