Canadian banks urged to do more to lower fees and credit card interest rates
TORONTO -- When COVID-19 took hold over a year ago, Canadian banks were urged to offer deferrals for mortgages, credit cards and other loans to help people through the pandemic.
But Canada’s big banks are back to making record profits and some groups say they could do more to help their customers.
ACORN Canada held protests in more than a dozen cities across the country on Tuesday, including in Toronto’s financial district.
Protesters say that Canadian bank presidents made an average of almost $11 million each during 2020 and several banks saw their profits more than double.
It comes at a time when some banks are raising fees.
ACORN, which represents low- and moderate-income families, said customers are being gouged with unfair fees for their accounts, non-sufficient fund cheques (NSF) fees and high credit card interest charges.
“We are asking the bank to stop the NSF fees. We are asking them to stop the fees for accounts that have less than $4,000" bank customer and protester Marva Burnett told CTV News Toronto on Tuesday.
Another bank customer and protester, Sheila Prosper, asked, “If you're a dollar short in your bank account, why should they be able to charge you a $48 NSF fee?”
ACORN is calling on banks to lower (NSF) fees to $10 at least or to not charge them all together.
It said banks should provide low-interest or zero-interest loans to low-income people and should stop financing predatory lenders.
“We get charged NSF cheques, we get charged for not having enough money in the bank and we even get charged for taking out our own money,” bank customer Toni Corrado told CTV News Toronto.
According to ACORN, Canadian banks charge some of the highest fees in the world and the group Democracy Watch based in Ottawa agrees.
“Four out of six Canadian banks in 2020 were among the top 50 most profitable banks in the world, even though they are much smaller than a lot of other banks, they still made more money” Duff Conacher, co-founder of Democracy Watch, said.
Conacher said that there are more consumer protections for bank customers in the United States, alongside more competition when it comes to fees and caps on credit card interest.
“Our banks have been protected by foreign competition and subsidized and allowed to dominate every sector of the financial services marketplace by the government,” Conacher said.
Conacher said high banking costs should be a federal election issue.
“It's going to take a finance minister and a political party in power who actually cares about 25 million bank customers instead of protecting a few bank CEOs and their multimillion dollars salaries,” Conacher said.
Democracy Watch has also started a petition, which has amassed 120,000 signatures of Canadians calling on the federal government to do more to stop excessive fees.
CTV News reached out to Canada’s five largest banks and we have statements from them below.
STATEMENT FROM RBC
Given the financial challenges many Canadians are facing during this pandemic, RBC has chosen not to increase any fees on retail bank accounts and we have no plans to make any increases in 2021. We understand the financial needs and expectations of our clients are constantly evolving and we’re continuing to create ways to help them save money and manage their finances more effectively. One way is by simplifying our account offering to focus on the core banking features that Canadians want. Our new RBC Advantage Banking account offers clients no minimum balance, unlimited debit transactions in Canada, and no RBC fee to use another bank’s ATM, among other benefits. As always, clients are encouraged to contact us with any questions or concerns to ensure they have the banking options and advice that best meet their needs.
STATEMENT FROM BMO
We offer a range of competitive banking plans designed to fit the everyday needs of Canadians and look for opportunities to provide added value with our plans including an identity theft protection service, free credit score review, and a Family Bundle that helps families under the same roof save on fees. In addition, we’re proud to provide several groups across Canada with no-fee banking options – including youth, students, seniors eligible for the Guaranteed Income Supplement, and members of the Canadian military and defence community. Over the course of the pandemic, we have provided financial relief to hundreds of thousands of Canadians including payment deferrals on mortgages and credit products and have waived fees for personal banking customers experiencing financial challenges. We continue to work with Canadians on an individual basis to help them during this time.
STATEMENT FROM CIBC
Our fees are among the lowest of the major Canadian banks and we’re available any time to discuss a range of plans and offers that can help our clients save money. Many fees are avoidable and most account plans are unaffected by the upcoming changes
STATEMENT FROM SCOTIABANK
We encourage our customers with questions or concerns regarding their banking products and services to contact us to discuss their options and to ensure that they have the products and services that best meet their needs.
STATEMENT FROM TD BANK
In this case, we'd defer to the CBA to provide a response on behalf of the industry.
STATEMENT FROM THE CANADIAN BANKING ASSOCIATION
Canada’s banks have provided bedrock support to customers at every step during the pandemic, standing by Canadians to manage financial hardship and to position the country for a strong, sustainable recovery. Banks have instituted sweeping relief programs to help affected customers, including nearly 800,000 mortgage deferrals, deferred payments on more than 1.2 million customer accounts for other credit products, and between March 2020 and February 2021 waived more than $112 million in fees for personal accounts.