The Minister of Finance yesterday released the federal government’s white paper updating financial institutions legislation.
The government says its proposals aim to enhance the interests of consumers and businesses, increase legislative and regulatory efficiency, and adapt the framework to new developments.
However, the white paper makes no mention of the long-standing demand from Canada’s banks that they be allowed to promote and sell insurance through their extensive branch network.
The proposed changes include:
- providing greater and more timely disclosure to consumers in areas such as deposit-type investment products and complaint-handling procedures;
- streamlining ministerial transaction approvals to make the process more efficient;
- allowing for the introduction of electronic cheque imaging;
- lowering the mortgage down payment consumers are required to make before the law requires mortgage insurance; and
- making it easier for credit unions to establish cooperative credit associations as a means of expanding their business opportunities.
The government will now proceed to draft legislation to implement the policy proposals laid out in the white paper so that the legislation can be introduced in the House of Commons this fall.
Jim Flaherty, Minister of Finance, said, “The proposed recommendations will go a long way towards eliminating red tape, improving disclosure to consumers and fostering a strong and dynamic financial sector. Proposals will also allow new technology to benefit consumers and small businesses through reduced maximum holding periods for cheques.”
In order to provide Parliament with sufficient time to consider this legislation, the government extended the sunset date for the financial institutions statutes by six months from Oct. 24, 2006 to April 24, 2007.
Comments on the paper are due by July 21.