The newly enhanced powers for the Financial Consumer Agency of Canada have been underway since April 2020. The Financial Consumer Agency of Canada (FCAC) is an independent federal regulatory agency. Its mandate is to help protect Canadian consumers and inform them about financial products and services. It’s responsible for enforcing consumer protection legislation and ensuring that federally regulated entities comply with federal regulations.
As of April 30, 2020, there’s been a major shift in the enforcement powers of the FCAC. In this article, we’ll review the new enforcement powers and how they affect Canadians.
Updating the FCAC Mandate
On December 13, 2018, Bill C-86 received royal assent. Bill C-86 is a significant bill because it provides better consumer protection when working with banks and authorized foreign banks. To accomplish this, the powers of the FCAC have been enhanced. A new section of the FCAC Act helps clarify the mandate of the FCAC. The FCAC’s purpose is to ensure a government agency oversees financial institutions, external complaint bodies, and credit card networks. The main goal is to help enhance the protection of consumers when it comes to financial products and services. In addition, the agency seeks to help improve the financial literacy of Canadians. It explicitly states that the FCAC must help protect the rights and interests of Canadian consumers of financial products and services. However, there is a slight conflict of interest. The FCAC is also responsible for accounting for the needs of financial institutions to manage their businesses in an efficient manner. To improve financial literacy, it’s the FCAC’s role to share trends and emerging issues that may affect consumers.Publicly Naming and Shaming Violators
The FCAC Commissioner now has to publicly name anyone who commits a violation of any regulation. The Commissioner used to be able to do it at his own discretion, however, that discretion was almost never used. This is no longer an issue with the new rules as they currently stand. Regulations also outline circumstances where the Commissioner wouldn’t need to make the name of the violator public. When the Commissioner makes the violation public, he or she can disclose why, facts, analysis, and consideration.Heftier Penalties
The maximum penalty for violations of the Act has increased substantially. The penalties have been upped from $50,000 to $1 million when a natural person did the violation. Penalties increased from $500,000 to $10 million for financial institutions or operators of payment cards. The criteria used for penalties have been extended. They take the following into consideration:- Duration of the violation
- The violator's ability to pay the penalty
- How much harm the violation caused
- The history of previous violations is also considered.