Bank Act (S.C. 1991, c. 46)

Marginal note:Rebate of borrowing costs

• 449.1 (1) Where a bank makes a loan in respect of which the disclosure requirements of section 450 apply, and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the bank shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan.

• Marginal note:Exception

  (2) The charges to be rebated do not include the interest or discount applicable to the loan.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations.

Marginal note:Disclosing borrowing costs

• 450. (1) A bank shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 451, and other prescribed information have been disclosed by the bank to the borrower at the prescribed time and place and in the prescribed form and manner.

• Marginal note:Non-application

  (2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans.

Marginal note:Calculating borrowing costs

451. The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents.

Marginal note:Additional disclosure

• 452. (1) Where a bank makes a loan in respect of which the disclosure requirements of section 450 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the bank shall disclose to the borrower, in accordance with the regulations,

  • (a) whether the borrower has the right to repay the amount borrowed before the maturity of the loan and, if applicable,

    • (i) any terms and conditions relating to that right, including the particulars of the circumstances in which the borrower may exercise that right, and

    • (ii) whether, in the event that the borrower exercises the right, any portion of the cost of borrowing is to be rebated, the manner in which any such rebate is to be calculated or, if a charge or penalty will be imposed on the borrower, the manner in which the charge or penalty is to be calculated;

  • (b) in the event that an amount borrowed is not repaid at maturity or, if applicable, an instalment is not paid on the day the instalment is due to be paid, particulars of the charges or penalties to be paid by the borrower because of the failure to repay or pay in accordance with the contract governing the loan;

  • (c) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement;

  • (d) particulars of any other rights and obligations of the borrower; and

  • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

• Marginal note:Disclosure in credit card applications

  (1.1) A bank shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards and provide prescribed information to any person applying to it for a credit, payment or charge card.

• Marginal note:Disclosure re credit cards

  (2) Where a bank issues or has issued a credit, payment or charge card to a natural person, the bank shall, in addition to disclosing the costs of borrowing in respect of any loan obtained through the use of the card, disclose to the person, in accordance with the regulations,

  • (a) any charges or penalties described in paragraph (1)(b);

  • (b) particulars of the person’s rights and obligations;

  • (c) any charges for which the person becomes responsible by accepting or using the card;

  • (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and

  • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

• Marginal note:Additional disclosure re other loans

  (3) Where a bank enters into or has entered into an arrangement, including a line of credit, for the making of a loan in respect of which the disclosure requirements of section 450 apply and the loan is not a loan in respect of which subsection (1) or (2) applies, the bank shall, in addition to disclosing the costs of borrowing, disclose to the person to whom the loan is made, in accordance with the regulations,

  • (a) any charges or penalties described in paragraph (1)(b);

  • (b) particulars of the person’s rights and obligations;

  • (c) any charges for which the person is responsible under the arrangement;

  • (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing under the arrangement; and

  • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.