Set out below is a letter-to-the-editor by Democracy Watch Coordinator Duff Conacher which was published in the January 17, 2011 issue of the Hill Times
Saul Schwartz is correct to be concerned about financial consumer literacy, but the proposal in his article "Canada needs a Consumer Financial Protection Bureau" (Dec. 20) is a little late, as the Financial Consumer Agency of Canada FCAC was established in 2001.
What is needed are more resources and powers for the FCAC, including the right to enclose the FCAC's pampphlet in financial institution mailings to customers at least once each year (because, as with Mr. Schwartz, few financial consumers know the FCAC exists).
As well, much-needed is a requirement that the FCAC conduct "mystery shopper" random audits every year to detect violations and systemic problems; that the FCAC disclose the identity of every financial institution found in violation of consumer protection measures (currently, the FCAC can only disclose if it prosecutes an institution), and; that the FCAC fine violators in every case (and fines must be increased from the current too-low level of $200,000).
As well, as recommended by the 1998 Task Force on Financial Services Industry, and by House and Senate committees that year, the federal government must require financial institutions to enclose a one-page pamphlet in their mailings to customers at least once each year that invites customers to join a financial consumer group that would be funded and directed only by consumers. Forming this broad-based, well-resourced group will not cost government or industry anything, and will help balance the financial services marketplace and make it work much more efficiently and effectively.
The Canadian Community Reinvestment Coalition, made up of 100 citizen groups with a membership of more than three million Canadians, has been advocating these and other financial consumer protection and accountability proposals since 1996 -- when will federal politicians finally enact these measures and stop protecting Canada's large financial institutions from effective accountability?
If these changes had been made a decade ago, we would not have the problems with credit cards outlined in Angelo Persichilli's article "Federal Competition Bureau highlights ugly truths about credit cards, but merchants can help" (Dec. 20).
Hopefully, the federal Task Force on Financial Literacy will recommend these changes in its upcoming report, especially the creation of the financial consumer group using the innovative "pamphlet" method as it is key to solving many systemic problems.
Duff Conacher, Coordinator of Democracy Watch
Chairperson of the Canadian Community Reinvestment Coalition (CCRC)