Opening statement to the Senate Standing Committee on National Finance (NFFN) by Interim Commissioner Werner Liedtke

May 28, 2024

Ottawa, Ontario

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Thank you, Mr. Chair, for the introduction, and to the Committee for inviting us to appear before you today.

My name is Werner Liedtke. I am the Interim Commissioner of the Financial Consumer Agency of Canada, or FCAC.

I will start with a brief overview of my Agency’s mandate. 

FCAC is an independent federal agency that protects the rights and interests of consumers of financial products and services.  

We deliver on our mandate in two principal ways. 

First, as a regulator, we supervise the compliance of federally regulated financial entities, such as banks, with consumer protection measures set out in legislation, public commitments and codes of conduct. 

Second, we work to strengthen the financial literacy of Canadians through collaboration with stakeholders, and through research and education. We also monitor trends and issues that affect financial consumers.

We, at FCAC, were delighted that our organization featured so prominently in Budget 2024.  

There were several important initiatives in the Budget relevant to our agency, including a new role with an expanded mandate. 

As a leader and innovator in financial consumer protection, FCAC is well positioned to take on this new responsibility.

We are working closely with the Department of Finance to advance the Consumer-Driven Banking Framework, which prioritizes innovation and includes strong and consistent protections for Canadians who will use consumer-driven banking. 

This new framework is guided by three objectives:

• safety and soundness

• protecting the financial well-being of Canadians

• and advancing economic growth and international competitiveness.  

Consumer-driven banking will enable consumers to securely use data-driven financial services that can help them better manage their finances and improve their financial outcomes.

Over the coming months we will be engaging with the financial sector and other stakeholders on common rules for consumer-driven banking as we move towards implementation of the Framework.

I would like to turn next to the low-cost/no-cost bank account commitment that was referenced in the Budget.

In fall 2023, the Minister of Finance had directed FCAC to work with banks to update the 2014 original Low-cost and No-cost Commitment.   

We were tasked with expanding the features of low-cost accounts to reflect modern banking, expanding the accessibility of no-cost accounts to more Canadians, and expanding the list of financial institutions that sign on to the updated commitment.     

FCAC has been meeting with financial institutions, experts in the field of financial consumers, and other stakeholders. We have also been inviting public views and conducting research into consumer awareness and needs. 

Our research shows that vulnerable consumers in particular clearly want access to no-cost accounts. 

We are committed to moving forward and optimistic that, with industry collaboration, an improved commitment can be implemented voluntarily.  

Speaking of those in vulnerable situations, Budget 2024 also included a commitment to strengthen the Canadian Mortgage Charter to provide additional support to Canadians facing mortgage hardship.

While the Mortgage Charter is a Department of Finance initiative, it complements FCAC’s Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances introduced in July 2023. 

The Mortgage Charter reinforces the Department of Finance’s and FCAC’s expectation that banks should support mortgage-holders facing financial difficulty. 

Another Budget commitment which is of great interest to us is the additional measures proposed to enhance enforcement of the criminal rate of interest through amendments to the Criminal Code, and strengthen the government’s crackdown on predatory lending. 

While payday loans fall under provincial and territorial jurisdiction, we do conduct research to better understand the issues and trends affecting Canadian financial consumers.

FCAC’s research shows that payday loan users are often unaware of the high costs of these loans, versus other sources of credit.

The proposed amendments to the Criminal Code and plans to further crack down on predatory lending are important steps to further protect financial consumers, especially those in more vulnerable situations. 

In the same vein, the Budget also references work to cap NSF fees and other similar charges.  

FCAC welcomes this move and will work with the Department of Finance to better understand how the updates included in the Budget align with FCAC's own work, including the Financial Consumer Protection Framework.

Finally, I would like to mention the Budget proposal to provide Prosper Canada with $60 million in funding over five years. 

FCAC has long  advocated for the need to fund community organizations, such as Prosper Canada, that work directly with Canadians to help them improve their financial well-being.

Prosper Canada is an important partner in advancing the FCAC’s National Financial Literacy Strategy.  

This proposed initiative aligns with the National Strategy’s “ecosystem” approach and will provide Canadians access to the tools and information they need to build financial resilience.

To close, Budget 2024 included many timely and important initiatives related to FCAC, on both the “regulatory” and “financial literacy” sides of our mandate.

I look forward to your questions. Thank you.