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Bank Act review proposals now before Parliament


November 29, 2006   by Canadian Underwriter


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The Bank Act review continues to go the brokers’ way.
Finance Minister Jim Flaherty recently introduced legislative proposals to Parliament that appear to close the issue of banks retailing insurance for yet another five years.
IBAC praised the government for not giving banks the power to retail and/or provide information about insurance products from their local branches. The banks had lobbied for such power during the recent installment of the Bank Act review, which is mandated every five years.
“The legislation ensures that the balance between the power of the banks and needs of the consumers is maintained,” IBAC CEO Dan Danyluk. “Banks have a privileged place in our economy, and maintaining the current framework that regulates insurance retailing by banks is good for consumers and good for small business.”
IBAC also stressed the need for prompt action on the passage of the legislation. “Consumers and small businesses need certainty in the marketplace and the sooner this issue is formally passed into legislation the more stakeholders can focus on serving customers,” Danyluk said.
The legislative proposals include:
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.
creating a framework for the introduction of electronic cheque imaginga new technology that would reduce the time consumers and small businesses must wait for their cheques to clear.
reducing the cost of mortgages for some borrowers by lowering the mortgage down payment consumers are required to make before the law requires the purchase of mortgage insurance.
making it easier for credit unions to establish cooperative credit associations as a means of expanding their business opportunities.
allowing Canadian financial institutions to add more foreign experts to their boards, as long as the majority of directors remain Canadian residents.
“This legislation will help modernize our regulations, cut red tape and advance the interests of consumers,” Flaherty said of the legislation in a press release.


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