Financial Consumer Protection Framework in Bank Act

Summary#

Order Fixing June 30, 2022 as the Day on Which Certain Provisions of that Act Come into Force: SI/2021-42 sets June 30, 2022 as the day when parts of the Budget Implementation Act, 2018, No. 2 take effect to put a new Financial Consumer Protection Framework into the Bank Act. The change requires banks to adopt new internal practices and consumer-protection measures; the supporting Financial Consumer Protection Framework Regulations come into force the same day.

What it does#

• Brings into force sections 315 to 330, 333 to 335, and subsection 336(2) of the Budget Implementation Act, 2018, No. 2 on June 30, 2022.
• Puts a new Financial Consumer Protection Framework into the Bank Act, with rules that focus on how banks deal with customers and the public.
• Requires banks to strengthen internal practices, for example:
  • boards to have a committee with clear oversight of consumer-protection obligations;
  • policies and procedures to consider consumers’ financial needs when offering or selling products;
  • a whistleblowing program that protects employees from retaliation and keeps reporters’ identities confidential.
• Adds customer-facing protections, for example:
  • electronic alerts to help consumers manage fees;
  • bans on undue pressure, misleading information, and taking advantage of consumers;
  • stronger complaint-handling rules, including requiring banks’ complaint policies to be approved and external complaint bodies to publish reasoning for their decisions.
• Keeps many existing consumer protections in place (for example: rights to cancel some products, express consent before selling, basic account-opening rules, membership in external complaint bodies, and key product disclosures).

Who's affected#

• Banks operating under the Bank Act will need to change governance, policies, IT systems, and staff practices.
• Bank customers and the general public may see different sales practices, fee alerts, and improved complaint handling.
• Bank employees, particularly those who report wrongdoing, will be affected by new whistleblower protections.
• External complaint-handling organizations and the Financial Consumer Agency of Canada (FCAC) will be involved in implementing and supervising the new rules.
• Provincial and territorial consumer-protection regimes remain in place; the source notes potential overlap but says provinces retain their regulatory powers.

Why it matters#

• Customers could get clearer, fairer treatment from banks and easier ways to manage fees and complaints.
• Banks must update systems and governance, which can mean visible changes to how products are sold or how complaints are handled.
• The date fixed — June 30, 2022 — gave banks and the FCAC time to make technical and operational changes before the rules took effect.
• The changes aim to make banking relationships safer and more transparent, especially for people who may be vulnerable to aggressive sales or confusing product information.