Financial Consumer Agency of Canada

Financial Consumer Agency of Canada

Agence de la consommation en matière financière du Canada
File:FCAC English avatar.jpg Avatar of the Financial Consumer Agency of Canada for use in social media
Agency overview
Formed	2001
Jurisdiction	Government of Canada
Headquarters	Ottawa, Ontario
Employees	54
Annual budget	$10.7M (CAD)
Agency executive	Ursula Menke, Commissioner
Website	www.fcac-acfc.gc.ca

The Financial Consumer Agency of Canada (FCAC) is an independent agency of the Government of Canada that enforces consumer protection legislation, regulations and industry commitments by federally regulated financial entities. It also provides programs and information to help consumers understand their rights and responsibilities when dealing with financial institutions and promotes financial literacy.

The Agency was established in 2001 by the federal government to strengthen oversight of consumer issues and expand consumer education in the financial sector. In July 2010, FCAC was also tasked with the oversight of payment card network operators and their commercial practices.

Mandate

FCAC has a dual mandate, set out in the Financial Consumer Agency of Canada Act. Broadly, these two main elements are:

• ensuring and enforcing compliance by the financial sector with federal legislation and regulations, as well as voluntary codes of conduct and public commitments
• promoting greater financial literacy by informing consumers about their rights and responsibilities when dealing with financial entities and payment card network operators.

Under its compliance mandate, FCAC is responsible for:

• ensuring that the market conduct of federally regulated financial entities complies with federal legislation and regulations
• promoting the adoption of policies and procedures designed to implement legislation, regulation, voluntary codes of conduct and public commitments by federally regulated financial entities
• monitoring federally regulated financial entities’ compliance with voluntary codes of conduct and their own public commitments.

Under financial literacy, FCAC is responsible for:

• informing consumers about their rights and responsibilities when dealing with financial entities and about the obligations of payment card network operators to consumers and merchants
• providing timely and objective information and tools to help consumers understand, and shop for, a variety of financial products and services
• monitoring and evaluating trends and emerging issues that may have an impact on consumers of financial products and services.

Scope

The Financial Consumer Agency of Canada (FCAC) monitors and supervises financial institutions and external complaints bodies that are regulated under federal legislation. These entities include all banks and federally incorporated or registered insurance, trust and loan companies, retail associations, federal credit unions and external complaints bodies.

FCAC does not regulate foreign bank representative offices, fraternal benefit societies or cooperative credit associations. FCAC also supervises payment card network operators to determine whether they are in compliance with the provisions of the Payment Card Networks Act.

A complete list of federally regulated financial institutions is available from the Office of the Superintendent of Financial Institutions (OSFI). As a regulatory agency, FCAC can exercise its enforcement powers to ensure that federally regulated financial entities comply with the consumer provisions of the various federal acts relating to financial services, including:

• the Bank Act
• the Insurance Companies Act
• the Trust and Loan Companies Act
• the Cooperative Credit Associations Act
• the Green Shield Canada Act
• the Payment Card Networks Act
• the Financial Consumer Agency of Canada Act..

In cases of contravention or non-compliance with legislation, FCAC notifies the federally regulated financial entity of a violation. Depending on the severity and frequency of the problem, the Agency may also:

• seek a commitment from the financial entity to remedy the issue within a short time
• impose a monetary penalty
• impose criminal sanctions
• take other actions as necessary.

FCAC reports to the federal Minister of Finance (Canada). Along with OSFI, the Department of Finance Canada, the Bank of Canada, the Canada Deposit Insurance Corporation, it is a member of the Financial Institutions Supervisory Committee, which meets on a quarterly basis to exchange information relating to the supervision of federally regulated financial institutions. meets on a quarterly basis to facilitate the exchange of information on matters relating to the supervision of federally regulated financial institutions

History

In December 1996, the Government of Canada launched the Task Force on the Future of the Canadian Financial Services Sector, one of several initiatives following extensive debate and consultation on reform of the financial sector.

In September 1998, the Task Force presented the federal government with its report, Change, Challenge, Opportunity (known as the MacKay Report). One of the Task Force’s findings was that “the current framework for consumer protection is not as effective as it should be in reducing the information and power imbalance between institutions and consumers.” Two parliamentary committees reviewed the Task Force Report, held public consultations across the country and presented their own recommendations.

A broad consensus on ways to improve the financial sector emerged through this process. In June 1999, the government released a policy paper, Reforming Canada’s Financial Services Sector: A Framework for the Future, containing 57 reform measures. Among them was a proposal to create a financial consumer agency to oversee consumer interests and improve consumer protection. Legislation to implement the reform package was passed on June 14, 2001.

The Financial Consumer Agency of Canada opened its doors in 2001 under the Financial Consumer Agency of Canada Act, to protect and inform consumers about financial services. Its first Commissioner was Bill Knight, a former senior executive and Member of Parliament in the Canadian House of Commons. He retired in 2006.

Ursula Menke became the second Commissioner in 2007,.