Regulations Amending Certain Department of Finance Regulations (Miscellaneous Program): SOR/2020-47

Canada Gazette, Part II, Volume 154, Number 7

Registration
SOR/2020-47 March 16, 2020

BANK ACT

INSURANCE COMPANIES ACT

TRUST AND LOAN COMPANIES ACT

P.C. 2020-139 March 13, 2020

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Regulations Amending Certain Department of Finance Regulations (Miscellaneous Program) pursuant to

Regulations Amending Certain Department of Finance Regulations (Miscellaneous Program)

Bank Act

Cost of Borrowing (Banks) Regulations

1 Paragraph 6(2.4)(c) of the Cost of Borrowing (Banks) Regulations footnote 31 is replaced by the following:

2 Subsection 6.1(4) of the Regulations is replaced by the following:

(4) If the consent referred to in subsection (2) or (3) is given orally by a borrower, the bank must provide confirmation of that consent to the borrower in writing, in paper or electronic form.

3 Paragraph 7(2)(d) of the Regulations is replaced by the following:

4 Paragraph 16(1)(b) of the Regulations is replaced by the following:

Cost of Borrowing (Authorized Foreign Banks) Regulations

5 Paragraph 6(2.4)(c) of the Cost of Borrowing (Authorized Foreign Banks) Regulations footnote 32 is replaced by the following:

6 Subsection 6.1(4) of the Regulations is replaced by the following:

(4) If the consent referred to in subsection (2) or (3) is given orally by a borrower, the authorized foreign bank must provide confirmation of that consent to the borrower in writing, in paper or electronic form.

7 Paragraph 7(2)(d) of the Regulations is replaced by the following:

8 Paragraph 16(1)(b) of the Regulations is replaced by the following:

Principal Protected Notes Regulations

9 Paragraph 3(m) of the Principal Protected Notes Regulations footnote 33 is repealed.

10 The portion of section 8 of the Regulations before paragraph (a) is replaced by the following:

Detailed information

8 The information referred to in paragraphs 3(a) to (l) respecting the principal protected notes offered by an institution must be disclosed by the institution in a full and complete manner

11 The portion of section 9 of the Regulations before paragraph (a) is replaced by the following:

Information — current value

9 An institution must disclose the following information to an investor who makes an inquiry concerning the value of their principal protected note on a specified day:

12 Section 11 of the Regulations is replaced by the following:

Information — index or reference points

11 If a principal protected note ceases to be linked to an index or reference point that was to be used to determine the interest payable under the note and, as a result, no interest will be paid, the institution must disclose that fact to the investor.

Credit Business Practices (Banks, Authorized Foreign Banks, Trust and Loan Companies, Retail Associations, Canadian Insurance Companies and Foreign Insurance Companies) Regulations

13 Subsection 3(1) of the Credit Business Practices (Banks, Authorized Foreign Banks, Trust and Loan Companies, Retail Associations, Canadian Insurance Companies and Foreign Insurance Companies) Regulations footnote 34 is replaced by the following:

3 (1) A statement of account in respect of a billing cycle for a credit card must be sent by an institution to the borrower after the last day of that billing cycle.

14 (1) The portion of subsection 7(2) of the Regulations before paragraph (a) is replaced by the following:

(2) An institution may not communicate or attempt to communicate with a debtor, any member of a debtor’s family or household, any relative, neighbour, friend or acquaintance of the debtor or the debtor’s employer by any means, or in any manner or with a frequency that constitutes harassment, including:

(2) Paragraph 7(2)(a) of the French version of the Regulations is replaced by the following:

(3) Paragraph 7(2)(b) of the Regulations is replaced by the following:

(4) The portion of subsection 7(3) of the French version of the Regulations before paragraph (a) is replaced by the following:

(3) Sauf pour obtenir l’adresse ou le numéro de téléphone du débiteur, l’institution ne peut communiquer ou tenter de communiquer avec tout membre de sa famille, toute personne qui habite dans sa résidence ou ses voisins, amis ou connaissances à moins que, selon le cas :

(5) Paragraph 7(4) of the Regulations is replaced by the following:

(4) If the consent referred to in paragraph (3)(b) is given orally by the debtor, the institution must provide confirmation of that consent to the debtor in writing, in paper or electronic form.

(6) The portion of subsection 7(7) of the French version of the Regulations before paragraph (a) is replaced by the following:

(7) Sauf si le débiteur y a consenti par écrit, l’institution ne peut communiquer avec le débiteur, tout membre de sa famille, toute personne qui habite dans sa résidence ou ses voisins, amis, employeurs, connaissances ou garants :

(7) Subsection 7(14) of the Regulations is replaced by the following:

(14) An institution may not, for the purpose of attempting to collect a debt, use any document that falsely purports to originate from any court within or outside Canada.

Electronic Documents (Banks and Holding Companies) Regulations

15 (1) Paragraph 5(2)(c) of the French version of the Electronic Documents (Banks and Holding Companies) Regulations footnote 35 is replaced by the following:

(2) Subsection 5(3) of the Regulations is repealed.

(3) Subsection 5(5) of the Regulations is replaced by the following:

(5) If the addressee’s consent is provided orally, the originator or the person acting for the originator shall provide the addressee in writing, in paper or electronic form, with the information referred to in subsection (2) and confirm the information referred to in subsection (4).

16 Subsections 6(2) and (3) of the Regulations are replaced by the following:

(2) If the addressee revokes their consent, the originator or the person acting for the originator must provide the addressee with confirmation, in writing, in paper or electronic form, of the revocation specifying when revocation of consent takes effect.

Deposit Type Instruments Regulations

17 Subsection 3(2) of the Deposit Type Instruments Regulations footnote 36 is replaced by the following:

Exception: agreements entered into by telephone

(2) In the case of an agreement for the issuance of a deposit type instrument that is entered into by telephone, the institution is not required to provide the disclosure referred to in subsection (1) in writing on or before entering into the agreement. However, the institution must provide the written disclosure after entering into the agreement.

Registered Products Regulations

18 Subsection 2(3) of the Registered Products Regulations footnote 37 is replaced by the following:

Accounts opened by telephone

(3) An institution that only provides information orally in accordance with paragraph (2)(a) must provide the same information in writing after opening the account or entering into the agreement.

Negative Option Billing Regulations

19 Subsection 3(2) of the Negative Option Billing Regulations footnote 38 is replaced by the following:

(2) If the consent is provided orally, the institution must provide the person with confirmation in writing of their express consent for the new product or service.

20 Subsection 5(2) of the Regulations is replaced by the following:

(2) An institution that provides the initial disclosure statement orally must also provide it in writing.

21 Section 7 of the Regulations is replaced by the following:

7 Any disclosure statement made in relation to an optional product or service that is provided on an ongoing basis, other than one provided in relation to a credit agreement, must specify that the person may cancel the product or service by notifying the institution that it is to be cancelled, that the cancellation will be effective as of the last day of the billing cycle or 30 days after the notification is received, whichever is earlier, and that on receipt of the notice, the institution must refund or credit the person with the amount of any charges paid by the person for any part of the product or service that is unused as of the day the cancellation takes effect, to be calculated in accordance with the formula set out in section 9.

22 Paragraph 8(2)(b) of the Regulations is replaced by the following:

23 The portion of section 9 of the Regulations before the formula is replaced by the following:

9 An institution that receives from a person a notice of cancellation of an optional product or service that is provided on an ongoing basis, other than one provided in relation to a credit agreement, must refund or credit the person with the amount of any charges paid by the person for any part of the product or service that is unused as of the day the cancellation takes effect, calculated in accordance with the formula

Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations

24 (1) Paragraph 7(e) of the Complaints (Banks, Authorized Foreign Banks and External Complaints Bodies) Regulations footnote 39 is replaced by the following:

(2) Paragraph 7(g) of the Regulations is replaced by the following:

(3) The portion of paragraph 7(h) of the Regulations before subparagraph (i) is replaced by the following:

(4) Paragraph 7(i) of the Regulations is replaced by the following:

(5) Paragraph 7(o) of the Regulations is replaced by the following:

25 Section 9 of the Regulations is replaced by the following:

Information relating to complaints

9 A bank or an authorized foreign bank must provide the external complaints body of which it is a member with all information in its possession or control that relates to a complaint after the external complaints body notifies it that the complaint has been received in respect of it.

Insurance Companies Act

Cost of Borrowing (Canadian Insurance Companies) Regulations

26 Paragraph 6(2.4)(c) of the Cost of Borrowing (Canadian Insurance Companies) Regulations footnote 40 is replaced by the following:

27 Subsection 6.1(4) of the Regulations is replaced by the following:

(4) If the consent referred to in subsection (2) or (3) is given orally by a borrower, the company must provide confirmation of that consent to the borrower in writing, in paper or electronic form.

28 Paragraph 7(2)(d) of the Regulations is replaced by the following:

29 Paragraph 16(1)(b) of the Regulations is replaced by the following:

Cost of Borrowing (Foreign Insurance Companies) Regulations

30 Paragraph 6(2.4)(c) of the Cost of Borrowing (Foreign Insurance Companies) Regulations footnote 41 is replaced by the following:

31 Subsection 6.1(4) of the Regulations is replaced by the following:

(4) If the consent referred to in subsection (2) or (3) is given orally by a borrower, the foreign company must provide confirmation of that consent to the borrower in writing, in paper or electronic form.

32 Paragraph 7(2)(d) of the Regulations is replaced by the following:

33 Paragraph 16(1)(b) of the Regulations is replaced by the following:

Electronic Documents (Insurance and Insurance Holding Companies) Regulations

34 (1) Paragraph 5(2)(c) of the French version of the Electronic Documents (Insurance and Insurance Holding Companies) Regulations footnote 42 is replaced by the following:

(2) Subsection 5(3) of the Regulations is repealed.

(3) Subsection 5(5) of the Regulations is replaced by the following:

(5) If the addressee’s consent is provided orally, the originator or the person acting for the originator shall provide the addressee in writing, in paper or electronic form, with the information referred to in subsection (2) and confirm the information referred to in subsection (4).

35 Subsections 6(2) and (3) of the Regulations are replaced by the following:

(2) If the addressee revokes their consent, the originator or the person acting for the originator must provide the addressee with confirmation, in writing, in paper or electronic form, of the revocation specifying when revocation of consent takes effect.

Trust and Loan Companies Act

Cost of Borrowing (Trust and Loan Companies) Regulations

36 Paragraph 6(2.4)(c) of the Cost of Borrowing (Trust and Loan Companies) Regulations footnote 43 is replaced by the following:

37 Subsection 6.1(4) of the Regulations is replaced by the following:

(4) If the consent referred to in subsection (2) or (3) is given orally by a borrower, the company must provide confirmation of that consent to the borrower in writing, in paper or electronic form.

38 Paragraph 7(2)(d) of the Regulations is replaced by the following:

39 Paragraph 16(1)(b) of the Regulations is replaced by the following:

Electronic Documents (Trust and Loan Companies) Regulations

40 (1) Paragraph 5(2)(c) of the French version of the Electronic Documents (Trust and Loan Companies) Regulations footnote 44 is replaced by the following:

(2) Subsection 5(3) of the Regulations is repealed.

(3) Subsection 5(4) of the French version of the Regulations is replaced by the following:

(4) Si le consentement est donné par écrit, sur support papier ou électronique, il mentionne le nom du système de traitement de l’information désigné pour la réception et est accompagné de la liste, sur support papier ou électronique, des avis, documents et autre information à l’égard desquels il est donné.

(4) Subsection 5(5) of the Regulations is replaced by the following:

(5) If the addressee’s consent is provided orally, the originator or the person acting for the originator shall provide the addressee in writing, in paper or electronic form, with the information referred to in subsection (2) and confirm the information referred to in subsection (4).

41 Subsections 6(2) and (3) of the Regulations are replaced by the following:

(2) If the addressee revokes their consent, the originator or the person acting for the originator must provide the addressee with confirmation, in writing, in paper or electronic form, of the revocation specifying when revocation of consent takes effect.

Coming into Force

42 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

In 2010, the Standing Joint Committee for the Scrutiny of Regulations (SJCSR) raised a number of issues regarding provisions in various financial consumer protection regulations. The issues raised relate to discrepancies between the English and French versions of the regulatory text, duplication, and vague or ambiguous language. The SJCSR has recommended that these issues be addressed.

Objective

The amendments have the following objectives:

Description

The Regulations Amending Certain Department of Finance Regulations (Miscellaneous Program) [the Amending Regulations] modify the financial consumer protection regulations to address vague or ambiguous language, reduce duplication, and address discrepancies between the English and French versions of the regulatory texts.

Examples of changes that address vague or ambiguous language are as follows:

In light of the SJCSR’s review raising concerns that “without delay” is an ambiguous term, Finance Canada identified the following regulations that also contain this term; they will also be amended accordingly: Complaints Regulations, Cost of Borrowing Regulations, Negative Option Billing Regulations and Principal Protected Notes Regulations.

An example of a change that would reduce duplication between a regulatory provision and its enabling legislative authority is as follows:

Examples of changes that would improve consistency between the French and English versions of these regulations are as follows:

“One-for-One” Rule

The “One-for-One” Rule does not apply to these amendments, as there is no change in administrative costs or burden to business.

Small business lens

The small business lens does not apply to these amendments, as there are no costs to small business.

Rationale

The amendments are a response to the SJCSR’s review of the regulations. The amendments help to correct or improve regulations and do not impose any costs on the government or financial institutions.

Contact

Julien Brazeau
Director General
Financial Services Division
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1P 5E9
Telephone: 613‑369‑3698
Email: julien.brazeau@canada.ca