Bank NSF Fees Capped at $10

Summary#

The Regulations Amending the Financial Consumer Protection Framework Regulations (SOR/2025-96) limit bank non-sufficient funds (NSF) charges for personal accounts. They cap NSF fees at $10, stop repeated charges on the same account within two business days, and prevent fees for overdrafts of less than $10. The regulations were registered on March 12, 2025 and take effect one year later on March 12, 2026.

What it does#

• Caps the NSF charge a bank may impose on a personal deposit account at $10 per declined cheque or pre-authorized debit.
• Prohibits charging more than one NSF fee on the same personal deposit account within two business days.
• Prohibits charging an NSF fee when the account is overdrawn by less than $10.
• Applies to personal accounts held by natural persons, including joint accounts. It does not apply to business accounts or to fees charged by merchants or lenders.
• The final rules removed earlier draft requirements to give customers a short "grace period" and to publish NSF-fee disclosures after consultation with banks.
• The federal regulator, the Financial Consumer Agency of Canada (FCAC), will supervise compliance.

Who's affected#

• Consumers who use cheques or pre-authorized debits. The Department estimated about 15.8 million NSF transactions in 2023, and that roughly 34% of Canadians incur an NSF fee in a year.
• People with low or unstable incomes are most likely to benefit. The government analysis highlights groups that are over-represented among those who struggle financially, including women, lone-parent households, recent immigrants, and Indigenous peoples.
• Federally regulated banks and authorized foreign banks. The Department estimates 79 institutions are affected, with the biggest banks bearing most of the revenue loss (the six largest banks account for about 97% of service‑charge revenue).
• Federally regulated credit unions are included. Provincially regulated credit unions and merchants’ dishonoured-payment fees are not covered.

Why it matters#

• Lower costs for consumers: NSF fees that were typically around $45–$48 at major banks will be capped at $10, reducing the financial hit when a payment is declined.
• Better protection for people on tight budgets: limiting stacking of fees and small-dollar penalties should reduce situations where a small mistake leads to large charges and debt cycles.
• Banks lose NSF revenue and will incur implementation costs. The government’s cost–benefit analysis estimates a net benefit to society of $94.1 million over 10 years, but it relies on assumptions and limited data (including comparisons with U.S. data).
• Some uncertainty remains: the Department flagged data gaps and modelling choices, and noted banks might respond by changing other fees or overdraft products. The rules are enforceable by the FCAC once they come into force on March 12, 2026.