Federal regulator vows to be ‘more proactive’ in handling Canada’s banks
TORONTO The new head of the Financial Consumer Agency of Canada is promising the federal regulator will be much more active as it prepares to enforce new consumer-protection measures and tries to keep an evolving banking sector in line.
Those changes have made it clear the FCAC needs to “take this time to move to the next stage of our evolution,” said Judith Robertson, who became the agency’s new commissioner in August.
“And we will be more engaged, more proactive and more transparent,” Robertson said in an interview.
The 2019-20 business plan for the FCAC, which is supposed to promote financial literacy and ensure federally regulated financial institutions follow consumer-protection rules, said the agency would continue implementing a new supervision framework and keep building its “capacity to discharge its oversight and enforcement responsibilities.”
“It will give increased focus to proactively identifying emerging risks before they affect consumers and to communicating with financial entities to help them achieve and maintain compliance,” the report added.
This followed an FCAC review, released in 2018, that found that Canada’s six biggest banks had aggressive sales cultures and lacked adequate controls to protect consumers from the resulting risks, including the risk of being misled about products.
Lawyers from one major Canadian law firm, Torys LLP, published a report at the end of October saying that, based on the recent initiatives and activities of the FCAC, they believed enforcement activity “is poised to increase.”
“In the last few weeks, we have been retained by clients who have received proposed notices of breaches and we expect more are likely to be received later this year,” the lawyers wrote.
There were two FCAC decisions on notices of violation published in 2019, compared to four in 2018, three in 2017 and one in 2016.
Robertson said the agency does plan on expanding its approximately 150-person workforce over the next few years, but she poured cold water on any assumption of more enforcement activity.
“I understand that any time there’s a change there is uncertainty and maybe even some concern,” she told the Post. “The FCAC views, and I view, enforcement as one of our tools as a regulator that we use. It needs to be definitely part of our tool kit, but that’s not our sole focus at all.”
Prior to joining the FCAC, Robertson was a commissioner on the Ontario Securities Commission and a director of the Financial Services Regulatory Authority of Ontario.
Her appointment also comes as the federal government has been taking steps to ratchet up consumer-protection measures.
In the wake of the sales practice report, the federal government passed legislation in 2018 intended to toughen up the FCAC’S mandate and give it new powers, including increasing the level of fines the regulator can levy against offending financial institutions, although that change has yet to come into effect.
Another such step is a plan to create a new “Canadian Consumer Advocate,” which the Liberals said in their fall campaign platform would “serve as an independent, single point of contact for people who need help with banking, telecom, or transportation-related complaints, and will be empowered to review complaints and, if founded, impose appropriate penalties.”