Citing feds’ proposal to ban insurance sales on bank Web sites, bankers’ association calls for improved dialogue with legislators

The Canadian Bankers Association (CBA) is cautioning Canadian legislators not to “get caught up in a wave of ‘regulation-mania’” in the wake of the financial crisis, later telling the media that one example would be Finance Minister Jim Flaherty’s efforts to prohibit banks from selling insurance products on their Web sites.
CBA president Nancy Hughes Anthony spoke at The Economic Club of Canada on Dec. 7. In the text of her prepared speech, she advocated continued co-operation and co-ordination between banks, regulators and the government.
“As we move forward, we need to build on this type of positive working relationship,” Hughes Anthony said in the notes to her speech. “We need more dialogue. Fewer unpleasant and inconsistent policy surprises.
“Let’s not rush into making policy decisions without fully understanding their long-term implications. On this point, I would suggest that we need to pause and recognize the cumulative impact of recently introduced policies.”
Hughes Anthony’s speech does not identify any specific examples of  “policy surprises” or “recently introduced policies.”
Speaking to the media after her speech, however, Hughes Anthony told reporters she was referencing the federal government’s stated intention to prohibit banks from selling insurance products on their Web sites.
Banks are not allowed to sell insurance products in their branches. Earlier this year, the Office of the Superintendent of Financial Institutions (OSFI) ruled that Web sites do not count as “branches” under the Bank Act legislation.
Finance Minister Jim Flaherty announced his intention in October 2009 to introduce legislation making it clear that the prohibitions against banks selling insurance products in their branches would also be applied to the banks’ Web sites.
“This indication by the minister that he wants to change some of the rules took us by surprise and we’re going to have to see where we come out at the end of the day,” Hughes Anthony told Bloomberg.com.
She also said banks believe they are “operating in the spirit” of existing legislation.