Financial Consumer Agency of Canada Act (S.C. 2001, c. 9)
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Assented to 2001-06-14
AMENDMENTS TO ACTS IN RELATION TO FINANCIAL INSTITUTIONS
1991, c. 46Bank Act
Marginal note:1999, c. 28, s. 35(1)
152. The heading before section 567 of the Act is converted from roman type to italics.
153. Section 567 of the Act, as enacted by subsection 35(4) of An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts, being chapter 28 of the Statutes of Canada, 1999, is replaced by the following:
Definition of “cost of borrowing”
567. For the purposes of this section and sections 567.1 to 574, “cost of borrowing” in respect of a loan made by an authorized foreign bank means
(a) the interest or discount applicable to the loan;
(b) any amount charged in connection with the loan that is payable by the borrower to the authorized foreign bank; and
(c) any charge prescribed to be included in the cost of borrowing.
For those purposes, however, “cost of borrowing” does not include any charge prescribed to be excluded from the cost of borrowing.
154. The Act is amended by adding the following before section 573:
Complaints
Marginal note:1999, c. 28, s. 35(1)
155. (1) Paragraph 573(1)(a) of the Act is replaced by the following:
(a) establish procedures for dealing with complaints made by persons having requested or received products or services from the authorized foreign bank;
(2) If this section comes into force before paragraph 573(1)(a) of the Act, as enacted by subsection 35(9) of An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts, being chapter 28 of the Statutes of Canada, 1999, comes into force, then subsection 35(9) of that Act is repealed.
Marginal note:1999, c. 28, s. 35(1)
(3) Subsection 573(2) of the Act is replaced by the following:
Marginal note:Procedures to be filed with Commissioner
(2) An authorized foreign bank shall file with the Commissioner a copy of its procedures established under paragraph (1)(a).
156. The Act is amended by adding the following after section 573:
Marginal note:Obligation to be member
573.1 An authorized foreign bank shall be a member of any body corporate that is designated under subsection 455.1(1).
Marginal note:1999, c. 28, s. 35(1)
157. (1) Section 574 of the Act is replaced by the following:
Marginal note:Information on contacting Agency
574. (1) An authorized foreign bank shall, in the prescribed manner, provide a person requesting or receiving a product or service from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 570(3), a payment, credit or charge card, the disclosure of or manner of calculating the cost of borrowing in respect of a loan, or about any other obligation of the authorized foreign bank under a consumer provision.
Marginal note:Report
(2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act, respecting
(a) procedures for dealing with complaints established by authorized foreign banks pursuant to paragraph 573(1)(a); and
(b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from an authorized foreign bank.
(2) If this section comes into force before subsection 574(1) of the Act, as enacted by subsection 35(10) of An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts, being chapter 28 of the Statutes of Canada, 1999, then subsection 35(10) of that Act is repealed.
Marginal note:1999, c. 28, s. 35(1)
158. (1) Subsections 576.1(1) to (3) of the Act are replaced by the following:
Marginal note:Restriction on tied selling
576.1 (1) An authorized foreign bank shall not impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the authorized foreign bank and any of its affiliates, as a condition for obtaining another product or service from the authorized foreign bank.
Marginal note:Favourable authorized foreign bank product or service tied to other sale
(2) For greater certainty, an authorized foreign bank may offer a product or service to a person on more favourable terms or conditions than the authorized foreign bank would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from any particular person.
Marginal note:Favourable other sale tied to authorized foreign bank product or service
(3) For greater certainty, an affiliate of an authorized foreign bank may offer a product or service to a person on more favourable terms or conditions than the affiliate would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from the authorized foreign bank.
(2) Section 576.1 of the Act is amended by adding the following after subsection (4):
Marginal note:Disclosure
(4.1) An authorized foreign bank shall disclose the prohibition on coercive tied selling set out in subsection (1) in a statement in plain language that is clear and concise, displayed and available to customers and the public at all of its branches and at all prescribed points of service in Canada.
Marginal note:Regulations
(4.2) The Governor in Council may make regulations for the purposes of subsection (4.1) defining “point of service” and prescribing points of service.
159. The Act is amended by adding the following after section 576.1:
Marginal note:Regulations re disclosure
576.2 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by authorized foreign banks or any prescribed class of authorized foreign banks, including regulations respecting
(a) the information that must be disclosed, including information relating to
(i) any product or service or prescribed class of products or services offered by them,
(ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services,
(iii) anything they are required to do or to refrain from doing under a consumer provision, and
(iv) any other matter that may affect their dealings with customers or the public;
(b) the manner, place and time in which and the persons to whom information is to be disclosed; and
(c) the content and form of any advertisement by authorized foreign banks or any prescribed class of authorized foreign banks relating to any matter referred to in paragraph (a).
Marginal note:1999, c. 28, s. 35(1)
160. Section 579 of the Act is replaced by the following:
Marginal note:Effect of writ, etc.
579. (1) Subject to subsections (3) and (4), the following documents are binding on property belonging to a person and in the possession of an authorized foreign bank, or on money owing to a person by reason of a deposit account in an authorized foreign bank, only if the document or a notice of it is served at the branch of the authorized foreign bank that has possession of the property or that is the branch of account in respect of the deposit account, as the case may be:
(a) a writ or process originating a legal proceeding or issued in or pursuant to a legal proceeding;
(b) an order or injunction made by a court;
(c) an instrument purporting to assign, perfect or otherwise dispose of an interest in the property or the deposit account; or
(d) an enforcement notice in respect of a support order or support provision.
Marginal note:Notices
(2) Any notification sent to an authorized foreign bank with respect to a customer of the authorized foreign bank, other than a document referred to in subsection (1) or (3), constitutes notice to the authorized foreign bank and fixes the authorized foreign bank with knowledge of its contents only if sent to and received at the branch of the authorized foreign bank that is the branch of account of an account held in the name of that customer.
Marginal note:Exception
(3) Subsections (1) and (2) do not apply in respect of an enforcement notice in respect of a support order or support provision if
(a) the enforcement notice, accompanied by a written statement containing the information required by the regulations, is served at an office of an authorized foreign bank designated in accordance with the regulations in respect of a province; and
(b) the order or provision can be enforced under the laws of that province.
Marginal note:Time of application
(4) Subsection (3) does not apply in respect of an enforcement notice in respect of a support order or support provision until the second business day following the day of service referred to in that subsection.
Marginal note:Regulations
(5) The Governor in Council may make regulations
(a) respecting the designation by an authorized foreign bank, for the purpose of subsection (3), of a place in any province for the service of enforcement notices in respect of support orders and support provisions;
(b) prescribing the manner in which an authorized foreign bank shall publicize the locations of designated offices of the authorized foreign bank; and
(c) respecting the information that must accompany enforcement notices in respect of support orders and support provisions.
Marginal note:Definitions
(6) The following definitions apply in this section.
“designated office”
« bureau désigné »
“designated office” means a place designated in accordance with regulations made for the purpose of subsection (3).
“enforcement notice”
« avis d’exécution »
“enforcement notice”, in respect of a support order or support provision, means a garnishee summons or other instrument issued under the laws of a province for the enforcement of the support order or support provision.
“support order”
« ordonnance alimentaire »
“support order” means an order or judgment or interim order or judgment for family financial support.
“support provision”
« disposition alimentaire »
“support provision” means a provision of an agreement relating to the payment of maintenance or family financial support.
Marginal note:1999, c. 28, s. 35(1)
161. Subparagraph 582(1)(b)(i) of the Act is replaced by the following:
(i) five million dollars, and
Marginal note:1999, c. 28, s. 35(1)
162. Subsection 594(1) of the Act is replaced by the following:
Marginal note:Auditor’s report to principal officer
594. (1) The auditor of an authorized foreign bank shall make a report to the principal officer of the authorized foreign bank in writing on the annual return not later than five months after the end of the financial year in respect of which the annual return is prepared.
Marginal note:1999, c. 28, s. 35(1)
163. (1) Paragraph 597(1)(b) of the Act is replaced by the following:
(b) accounting records respecting its business in Canada;
(2) Section 597 of the Act is amended by adding the following after subsection (6):
Marginal note:Electronic access
(7) An authorized foreign bank may make the information contained in records referred to in subsection (1) available to persons by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing the records in intelligible written form within a reasonable time.
Marginal note:1999, c. 28, s. 35(1)
164. Subsection 606(1) of the Act is replaced by the following:
Marginal note:Confidential information
606. (1) Subject to sections 608 and 609, all information regarding the business or affairs of an authorized foreign bank, or regarding a person dealing with an authorized foreign bank, that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information, is confidential and shall be treated accordingly.
Marginal note:1999, c. 28, s. 35(1)
165. Section 612 of the Act is replaced by the following:
Marginal note:Report respecting disclosure
612. The Superintendent shall prepare a report respecting the disclosure of information by authorized foreign banks and describing the state of progress made in enhancing the disclosure of information in the financial services industry. The report is to be included in the report referred to in section 40 of the Office of the Superintendent of Financial Institutions Act.
Marginal note:1999, c. 28, s. 35(1)
166. Subsection 613(1) of the Act is replaced by the following:
Marginal note:Examination of authorized foreign banks
613. (1) The Superintendent, from time to time, but, in the case of an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2), at least once in each calendar year, shall make or cause to be made any examination and inquiry into the business and affairs of each authorized foreign bank that the Superintendent considers to be necessary or expedient to determine whether the authorized foreign bank is complying with the provisions of this Act and, after the conclusion of each examination and inquiry, shall report on it to the Minister.
167. The Act is amended by adding the following after the heading “Remedial Powers” after section 614:
Prudential Agreements
Marginal note:Prudential agreement
614.1 The Superintendent may enter into an agreement, called a “prudential agreement”, with an authorized foreign bank for the purposes of implementing any measure designed to protect the interests of its depositors and creditors in respect of its business in Canada.
Marginal note:1999, c. 28, s. 35(1)
168. Subsection 616(1) of the Act is replaced by the following:
Marginal note:Court enforcement
616. (1) Where an authorized foreign bank or a person
(a) is contravening or has failed to comply with a prudential agreement entered into under section 614.1 or a direction of the Superintendent made under subsection 615(1) or (3),
(b) is contravening this Act, or
(c) has omitted to do any thing under this Act that is required to be done by or on the part of the authorized foreign bank or person,
the Superintendent may, in addition to any other action that may be taken under this Act, apply to a court for an order requiring the authorized foreign bank or person to comply with the prudential agreement or the direction, cease the contravention or do any thing that is required to be done, and on the application the court may so order and make any other order it thinks fit.
169. The Act is amended by adding the following after section 617:
Disqualification and Removal of Principal Officers
Marginal note:Application
617.1 (1) This section applies only in respect of an authorized foreign bank
(a) that has been notified by the Superintendent that this section applies to it where the authorized foreign bank is subject to measures designed to protect the interests of its depositors and creditors in respect of its business in Canada, which measures
(i) have been specified by the Superintendent by way of conditions or limitations in respect of the order approving the commencement and carrying on of business in Canada by the authorized foreign bank, or
(ii) are contained in a prudential agreement entered into under section 614.1 or an undertaking given by the authorized foreign bank to the Superintendent; or
(b) that is the subject of a direction made under section 615 or an order made under section 617.
Marginal note:Information to be provided
(2) An authorized foreign bank shall provide the Superintendent with the name of any person who has been selected by the authorized foreign bank for appointment as principal officer, together with such other information about the background, business record and experience of the person as the Superintendent may require.
Marginal note:When information to be provided
(3) The information required by subsection (2) shall be provided to the Superintendent at least 30 days prior to the date of the appointment or within any shorter period that the Superintendent may allow.
Marginal note:Disqualification
(4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold the position of principal officer, the Superintendent may, by order, disqualify the person from being appointed to that office.
Marginal note:Risk of prejudice
(5) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada would likely be prejudiced if the person were to take office.
Marginal note:Representations may be made
(6) The Superintendent must in writing notify the person concerned and the authorized foreign bank of an order that the Superintendent proposes to make under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.
Marginal note:Prohibition
(7) If an order is made under subsection (4) disqualifying a person from being appointed as principal officer, the person shall not be, and the authorized foreign bank shall not permit the person to be, appointed to that position.
Marginal note:Removal
617.2 (1) The Superintendent may, by order, remove a person from office as the principal officer of an authorized foreign bank if the Superintendent is of the opinion that the person is not suitable to hold that office
(a) on the basis of the competence, business record, experience, conduct or character of the person; or
(b) because the person has contravened or, by action or negligence, has contributed to the contravention of
(i) this Act or the regulations made under it,
(ii) a direction made under section 615,
(iii) an order made under section 617,
(iv) a condition or limitation in respect of the order approving the commencement and carrying on of business in Canada by the authorized foreign bank, or
(v) a prudential agreement entered into under section 614.1 or an undertaking given by the authorized foreign bank to the Superintendent.
Marginal note:Risk of prejudice
(2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada have been or are likely to be prejudiced by the person’s holding office as principal officer.
Marginal note:Representations may be made
(3) The Superintendent must in writing notify the principal officer and the authorized foreign bank of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.
Marginal note:Suspension
(4) If the Superintendent is of the opinion that the public interest is likely to be prejudiced by the principal officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the principal officer. The suspension may not extend beyond 10 days after the expiration of that period.
Marginal note:Notice of order
(5) The Superintendent shall, without delay, notify the principal officer and the authorized foreign bank of a removal order or suspension order.
Marginal note:Consequences of removal order
(6) The principal officer ceases to hold that office as of the date the removal order is made or any later date specified in the order.
Marginal note:Appeal
(7) The principal officer or the authorized foreign bank may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.
Marginal note:Powers of Federal Court
(8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.
Marginal note:Order not stayed by appeal
(9) A removal order is not stayed by an appeal.
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