March 9 , 2011
Cheque hold periods to change, other measures announced by Minister of State for Finance
Ottawa--The federal government is "taking decisive action to protect the interests of Canadian consumers of financial products and services", including changing cheque clearing periods.
“The economy remains our government’s top priority,” said Minister Ted Menzies. “We’re protecting Canadian consumers by banning negative option billing for financial products, ensuring greater transparency and making sure consumers have timelier access to their own hard-earned money.”
The Access to Funds Regulations would reduce the maximum cheque hold period for consumers and small- and medium-sized enterprises. The maximum hold period is currently seven business days for all cheque amounts. This ould be reduced to four business days for cheques of $1,500 or less. The regulations would also provide consumers with immediate access to the first $100 deposited by cheque.
The Negative Option Billing Regulations would require federally regulated financial institutions to obtain consumers’ express consent before providing a new optional product or service. Consumers would receive in advance a summary of key information, including related fees and costs, before granting their express consent. The regulations would also prescribe additional disclosure when a consumer agrees to an optional product or service, and require financial institutions to refund charges on a prorated basis following cancellation.
“These measures will give Canadians more freedom and information to effectively manage their personal finances,” said Blaney.
Lower-income seniors, Canadians without significant balances in their accounts, younger Canadians who do not have a long banking history, and people who receive cheques from newer employers or clients are often subject to longer cheque hold periods. These are often the Canadians who most need quick access to their funds.
“The action our government is taking today will protect Canadians and their families from unexpected costs and provide clear information to help them make the right financial decisions,” added Minister Menzies.
The regulations will be published in the Canada Gazette on March 12 for a 30-day comment period. Contact information for forwarding comments is provided with the proposed regulations.