Archived - Consultation Questions at a Glance: Canada’s Financial Consumer Protection Framework Consultation

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This consultation paper seeks views from all Canadians on elements that could strengthen Canada’s financial consumer protection framework and seeks input on key policy issues. Respondents are encouraged to respond directly to the proposed questions highlighted in the consultation paper.

The federal government will provide a summary of views gained from this consultation process in summer 2014, and input from Canadians will be used in developing consumer protection policies.

The Government of Canada is seeking views on three key areas, summarized as follows:

1. Establishing a Comprehensive Set of Principles for Consumer Protection

To achieve a framework that is more adaptable to changes in the financial marketplace, products and technology, the government is considering the merits of adopting standards or principles to anchor the financial consumer code.

  • Should the government adopt a set of principles to govern financial consumer protection that would be applicable even where specific regulations have not been enacted?
  • If so, how should a set of principles be administered?
  • What should be included in a set of principles that would form the basis for financial consumer protection?
  • What elements should be set out under each principle to ensure that the principles are meaningful, measurable and fair to consumers and financial institutions?


2. Possible Enhancements to Existing Regime

In the context of developing a comprehensive consumer code, the government is interested in hearing from Canadians with respect to enhancing protection for consumers, including:

a) Addressing the Needs of Seniors and Vulnerable Canadians

Some Canadians may face particular challenges in accessing financial services and in assessing the most appropriate financial products for their needs. Geography, cultural and financial literacy or capacity to process information may pose obstacles to some groups.

  • What are the unique challenges faced by vulnerable populations?
  • How should the consumer code address these challenges?

b) Responsibility of Financial Institutions to Consumers

The existing consumer protection regime is detailed and prescriptive in nature and does not contain a general expectation for the degree of responsibility financial institutions should have to consumers. This can lead to uncertainty regarding financial institutions’ obligations to consumers when new products or services are developed, including an assessment of the risks these products or services may pose to consumers.

  • Would it be useful to have in legislation a broad standard of responsibility for financial institutions to consumers  and, if so, what level of care should consumers expect from financial institutions?
  • How should this standard be administered or enforced?
  • How should financial institutions’ business practices be evaluated to ensure that they are meeting their responsibilities to consumers?

c) Supervisory Powers for Accountability and Enforcement

The FCAC was established  to strengthen oversight of consumer issues and expand consumer education in the financial sector.  The supervisory agency plays an important role in consumer protection using its administration and enforcement powers. The government is considering whether changes are needed to the legislative framework in order to allow the FCAC to better supervise and enforce consumer protection provisions.

  • What tools and authorities will the FCAC need in order to effectively supervise and enforce the implementation of a principles-based financial consumer protection framework?
  • Should consumers have greater access to recourse, beyond the FCAC, in the federal consumer protection framework?

d) Innovation

Banking products and services have evolved significantly over the last few decades as financial systems have grown and the number and variety of financial products  in the marketplace has expanded. Digital innovation has also led to an increase in consumer choice for accessing financial products and services.

  • How should the consumer protection framework accommodate emerging technologies and financial products?

e) Disclosure About Financial Products and Services

The government has used disclosure requirements as a key tool to provide Canadians with information to make responsible financial decisions. In an effort to be comprehensive and enable consumers to make responsible financial decisions, the government is seeking views on what key information elements are needed and what are the most effective forms of disclosure to help consumers to understand and compare products.

  • What key information do consumers need and how should it most effectively be presented to allow consumers to make informed financial decisions?
  • Are there particular products or circumstances in which disclosure is not sufficient to provide consumers with the information needed to make responsible financial decisions? What enhancements to disclosure would provide Canadians with information to make responsible financial decisions?

f) Access to Financial Services

The government continues to be committed to facilitating affordable access to basic banking services for all Canadians.

  • How could the code ensure reasonable access to basic banking services for all Canadians?
  • Are there examples where access to financial services is difficult or constrained? How could these situations be addressed in the consumer code?

g) Comprehensiveness

The financial consumer code should comprehensively protect consumers of financial products and services. In addition to addressing the elements described above, the government seeks views on any other elements that could be considered in order to achieve the objective of a comprehensive consumer code.

  • What needs to be included in order to achieve the objective of a comprehensive financial consumer code?


3) Continuing the Conversation: Engagement

By working together we can continue to position Canada as a leader in financial services regulation, including financial literacy, financial inclusion and financial consumer protection policy. To do so will require the active engagement of all stakeholders, including individual Canadians, financial institutions and consumer groups.

  • Should the government consider mechanisms for enhancing engagement among stakeholders in regulatory, supervisory and compliance processes related to consumer protection?
  • How could consumers and consumer groups best contribute to these processes, and what might their role be?