The federal government approved RBC’s $13.5 billion takeover of HSBC Canada in the waning months of 2023, despite critics’ concerns that it would stifle competition. banking industry Customers will start seeing what happens next year with this acquisition, which is expected to close in the first quarter.
Here’s a look at some of the other changes you can expect in Canada. banking industry In 2024:
Open banking industry
In its Autumn Economic Statement, the federal government announced that it will introduce legislation into the 2024 budget to establish an open economic environment. banking industry Framework.
Open banking industryor what the government calls “consumer-driven” banking industry” makes it easier for Canadians and small businesses to securely share financial data across services, including options like budgeting apps. For example, a customer can pool various bank accounts all into her one interface, making it easier to add and manage free accounts and other products.
Many people in the financial technology community have been pushing for open technology adoption. banking industry This is to make it easier for consumers to switch bank accounts and try new services. For example, consumers in the UK can instruct their bank to switch their account to a competitor, and all deposit and withdrawal information, including automatic bill payments, will also be transferred.
The federal Liberal Party had made a promise in its 2021 election campaign. banking industry It is expected to be introduced by early 2023 at the latest.
single option banking industry complaint
Consumer advocacy groups have been calling for a single product to be reinstated for years. banking industry The current two options allow banks to choose which service they prefer, without necessarily being the best one for their customers, allowing the ombudsperson to resolve complaints.
The federal government said in its 2022 budget that it would introduce legislation to establish a single grievance redressal authority. In October this year, the government announced: banking industry One of the two existing organizations, Services and Investments, will have jurisdiction over all organizations. banking industry The other company, ADR Chambers, will continue to operate other dispute resolution services.
But consumer advocacy groups such as Democracy Watch have criticized the government for not following through on a promise to give the ombuds the power to impose binding arbitration on government decisions.
faster payments
Payments Canada, a non-profit organization that owns and operates the country’s payments infrastructure, has been working for some time to create a near-instant payment settlement environment. This improvement means things like credit card payments are processed instantly instead of sometimes taking several days on weekends and holidays, and it also improves payment data and transparency.
Payments Canada said in 2018 that the system would be introduced in 2019, but it has not yet been implemented. The group last said it would launch in mid-2023, but then announced a further indefinite postponement citing “delivery delays”. It said it would provide an update on the planned rollout in the first quarter of 2024.
predatory lending
In its 2023 budget, the government lowered the cap on interest rates that lenders can charge. The maximum interest rate will be increased from the equivalent of 47 percent annual percentage rate (APR) to 35 percent annual percentage rate (APR), and the Criminal Code payday loan exemption will be adjusted to allow payday lenders to pay less than $14 per $100 borrowed. Mandatory billing.
The government also launched a consultation in October seeking views on what additional protections against predatory lending are needed. The company also wants to know what types of products are needed to specifically meet the needs that payday lenders currently serve. TD Bank and Canada Post launched the alternative financing service in late 2022, but it was quickly shut down due to processing issues, and the program is now suspended indefinitely.
It is not clear what programs or changes the government will roll out in 2024.
Invisible: Price Review
Democracy Watch recently reported that the federal government is not only only partially fulfilling some of its 2021 election promises, but also that it is “reviewing the prices banks charge and imposing changes where necessary.” He emphasized that no progress has been made on his pledge to “strengthen the authority of the agency.” They are excessive. ”
The government recently announced that it is increasing access to low-cost and free bank account options, as well as pushing for more specific fees, such as insufficient funds fees. Currently, groups such as young people, students, seniors receiving income protection supplements and registered beneficiaries of disability savings plans are eligible for low-cost accounts, but the government says it is working to expand eligibility. .
This report by The Canadian Press was first published Dec. 28, 2023.
