Technical Amendments to Certain Bank Act Regulations - Canada Gazette April 2, 2019

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On April 1, 2020, the Canada Gazette[1] published the Regulations Amending Certain Department of Finance Regulations (Miscellaneous Program) (“Regulations”).  These Regulations serve to address issues raised by the Standing Committee for the Scrutiny of Regulations in 2010, related to discrepancies between the English and French versions of the regulator text, duplication, and vague or ambiguous language and typographical/grammatical errors.

The Regulations affect several of the consumer protection regulations under:

Bank Act

  • Cost of Borrowing Regulations
  • Principal Protected Notes Regulations
  • Credit Business Practices Regulations
  • Electronic Documents Regulations
  • Complaints Regulations
  • Negative Options Billing Regulations
  • Registered Products Regulations
  • Deposit Type Instruments Regulations

Insurance Companies Act

  • Credit Business Practices Regulations
  • Complaints Regulations
  • Cost of Borrowing Regulations
  • Electronic Documents Regulations

Trust and Loan Companies Act

  • Cost of Borrowing Regulations
  • Electronic Documents Regulations 

Ambiguous language

  • Credit Business Practices Regulations (Bank Act, Insurance Companies Act):
    • The requirement for information to be provided “without delay” was found to be vague and ambiguous. As a result, the expression was removed from the regulations, as it was found to imply that obligations imposed upon banks should be undertaken in a timely fashion unless a specific time limit is prescribed.

      The expression was also removed from the Complaints Regulations, the Cost of Borrowing Regulations, the Negative Option Billing Regulations and the Principal Protected Notes Regulations.
       
    • The reference to favourable terms in the agreement “such as imposing no penalty or fee for early payment” was replaced by clearer and more succinct language.
       
    • The reference to “pressure” in the Debt Collection Practices section is no longer qualified by “excessive or unreasonable”
       
    • The reference to documents “unlawfully” purporting to originate from a court is replaced with a more accurate adverb, i. e. “falsely”.
       
  • Principal Protected Notes Regulations (Bank Act): The requirement for banks to disclose to consumers “any other information that could reasonably be expected to affect an investor’s decision to purchase the note” was also found to be vague and ambiguous. As such, the requirement was removed from the regulations.
     
  • Cost of Borrowing Regulations (Bank Act, Insurance Companies Act, Trust and Loan Companies Act): The requirement to disclose information such that “sufficient white space is provided around the text” was deemed to be vague and ambiguous. Consequently, the requirement was amended to align with other similar requirements in the same regulation by removing the word “sufficient,” so that text must be clearly visible.

Duplication

  • Electronic Documents Regulations (Bank Act, Insurance Companies Act, Trust and Loan Companies Act) : The requirements related to a consumer’s ability to access and retain a copy of electronic documents where the consumer has provided consent to receive electronic documents is duplicative of the same requirement found in the enabling statute. Therefore, this requirement was removed from the regulations.

Inconsistencies between official languages

  • Credit Business Practices Regulations (Bank Act, Trust and Loan Companies Act, Insurance Companies Act):
    • The English regulatory text identifies certain individuals with whom a debtors may have a relationship but who may not be contacted by institutions for the purposes of collecting the debt (i.e. a debtor, any member of the debtor’s family or household, and any relative, neighbour, friend or acquaintance of the debtor or the debtor’s employer). However the French version identifies a subset of the individuals identified in the English version: “toute personne de sa connaissance — parent, ami, voisin, employeur.” The French version was amended to align with the English version.
       
    • The English version states that institutions are prohibited from communicating with a debtor in a manner that constitutes harassment, including the use of “profane” language. The concept of “profane” is missing from the French version. The French version was amended to align with the English version.
       
  • Electronic Documents Regulations (Bank Act, Insurance Companies Act, Trust and Loan Companies Act):  The English version includes a requirement for electronic documents to be retained for a period of time while the French version does not. As such, the French version was amended to align with the English version.

The Regulations came into effect on March 16, 2020.

 

[1] Part II, Volume 154, Number 7.

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