Bill C-419: An Act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act (credit cards)

Bill C-419 If you have any questions or comments regarding the accessibility of this publication, please contact us at [email protected]. First Reading LEGISinfo Bilingual view XML PDF Skip to Document Navigation Skip to Document Content Short Title Bank Act Trust and Loan Companies Act Insurance Companies Act Cooperative Credit Associations Act Coming into Force First Session, Forty-second Parliament, 64-65-66-67 Elizabeth II, 2015-2016-2017-2018 HOUSE OF COMMONS OF CANADA BILL C-419 An Act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act (credit cards) FIRST READING, October 31, 2018 Ms. Harder 421546 SUMMARY This enactment amends the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act to implement a number of measures respecting credit card accounts. Available on the House of Commons website at the following address: www.ourcommons.ca 1st Session, 42nd Parliament, 64-65-66-67 Elizabeth II, 2015-2016-2017-2018 HOUSE OF COMMONS OF CANADA BILL C-419 An Act to amend the Bank Act, the Trust and Loan Companies Act, the Insurance Companies Act and the Cooperative Credit Associations Act (credit cards) Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: Short Title Short title 1 This Act may be cited as the Credit Card Fairness Act. 1991, c. 46 Bank Act 2 The Bank Act is amended by adding the following after section 451: Calculating interest re credit card 451.‍1 (1) If, in respect of purchases of goods or services made on a credit card during a particular billing cycle, the borrower pays at least 95% of the outstanding balance owing on the credit card account on or before the due date for that cycle, the bank may only charge interest on the difference between the outstanding balance on the due date and the amount of all payments made on or before that due date. Different interest rates (2) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the bank shall apply, in respect of each of those amounts, the lesser of the interest rate applicable during that billing cycle and the interest rate applicable at the time of the purchase of the goods or services. Credit card statement (3) If a bank has issued a credit card to a natural person, the bank shall set out in the statement of account for that card, in a clear and prominent manner, the total of all amounts of interest paid by the person for the previous 12 billing cycles. Allocation of payments 451.‍2 If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the bank shall first allocate any payment made by the borrower that is greater than the minimum payment required for that billing cycle to the amount in respect of which the interest rate is highest and then allocate any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates. Consent for increase in credit limit 451.‍3 (1) A bank may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent. Confirmation in writing (2) If the borrower’s consent to the increase is given verbally, the bank shall, not later than the date of the first statement of account that is provided after the day on which verbal consent is obtained, provide confirmation of that consent to the borrower in writing, in paper or electronic form. Online banking – changes to account 451.‍4 If a bank provides online banking, it shall make available to a borrower an electronic means to decrease the credit limit on their credit card account or to close their account. Confirmation in writing 451.‍5 If a borrower requests that the credit limit on their credit card account be decreased or that their account be closed, the bank shall provide the borrower with confirm­ation in writing – in paper or electronic form – of the decrease or closure, as the case may be. 3 Section 453 of the Act is renumbered as subsection 453(1) and is amended by adding the following: Advertising re credit card (2) If the advertisement relates to a credit card, the following information shall be clearly and prominently displayed, easily legible and in distinct contrast to any other information shown on the advertisement: (a) the annual interest rate; (b) the annual fees charged in connection with the credit card; and (c) if there is a discount on the annual interest rate that is applicable to the credit card account, its dur­ation and the interest rate that is applicable once the discount ceases to apply. 4 The Act is amended by adding the following after section 569: Calculating interest re credit card 569.‍1 (1) If, in respect of purchases of goods or services made on a credit card during a particular billing cycle, the borrower pays at least 95% of the outstanding balance owing on the credit card account on or before the due date for that cycle, the authorized foreign bank may only charge interest on the difference between the outstanding balance on the due date and the amount of all payments made on or before that due date. Different interest rates (2) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the authorized foreign bank shall apply, in respect of each of those amounts, the lesser of the interest rate applicable during that billing cycle and the interest rate applicable at the time of the purchase of the goods or services. Credit card statement (3) If an authorized foreign bank has issued a credit card to a natural person, the authorized foreign bank shall set out in the statement of account for that card, in a clear and prominent manner, the total of all amounts of interest paid by the person for the previous 12 billing cycles. Allocation of payments 569.‍2 If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the authorized foreign bank shall first allocate any payment made by the borrower that is greater than the minimum payment required for that billing cycle to the amount in respect of which the interest rate is highest and then allocate any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates. Consent for increase in credit limit 569.‍3 (1) An authorized foreign bank may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent. Confirmation in writing (2) If the borrower’s consent to the increase is given verbally, the authorized foreign bank shall, not later than the date of the first statement of account that is provided after the day on which verbal consent is obtained, provide confirmation of that consent to the borrower in writing, in paper or electronic form. Online banking – changes to account 569.‍4 If an authorized bank provides online banking, it shall make available to a borrower an electronic means to decrease the credit limit on their credit card account or to close their account. Confirmation in writing 569.‍5 If a borrower requests that the credit limit on their credit card account be decreased or that their account be closed, the authorized foreign bank shall provide the borrower with confirmation in writing – in paper or electronic form – of the decrease or closure, as the case may be. 5 Section 571 of the Act is renumbered as subsection 571(1) and is amended by adding the following: Advertising re credit card (2) If the advertisement relates to a credit card, the following information shall be clearly and prominently displayed, easily legible and in distinct contrast to any other information shown on the advertisement: (a) the annual interest rate; (b) the annual fees charged in connection with the credit card; and (c) if there is a discount on the annual interest rate that is applicable to the credit card account, its dur­ation and the interest rate that is applicable once the discount ceases to apply. 1991, c. 45 Trust and Loan Companies Act 6 The Trust and Loan Companies Act is amended by adding the following after section 437: Calculating interest re credit card 437.‍1 (1) If, in respect of purchases of goods or services made on a credit card during a particular billing cycle, the borrower pays at least 95% of the outstanding balance owing on the credit card account on or before the due date for that cycle, the company may only charge interest on the difference between the outstanding balance on the due date and the amount of all payments made on or before that due date. Different interest rates (2) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the company shall apply, in respect of each of those amounts, the lesser of the interest rate applicable during that billing cycle and the interest rate applicable at the time of the purchase of the goods or services. Credit card statement (3) If a company has issued a credit card to a natural person, the company shall set out in the statement of account for that card, in a clear and prominent manner, the total of all amounts of interest paid by the person for the previous 12 billing cycles. Allocation of payments 437.‍2 If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the company shall first allocate any payment made by the borrower that is greater than the min­imum payment required for that billing cycle to the amount in respect of which the interest rate is highest and then allocate any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates. Consent for increase in credit limit 437.‍3 (1) A company may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent.‍ Confirmation in writing (2) If the borrower’s consent to the increase is given verbally, the company shall, not later than the date of the first statement of account that is provided after the day on which verbal consent is obtained, provide confirmation of that consent to the borrower in writing, in paper or electronic form. Online banking – changes to account 437.‍4 If a company provides online banking, it shall make available to a borrower an electronic means to decrease the credit limit on their credit card account or to close their account. Confirmation in writing 437.‍5 If a borrower requests that the credit limit on their credit card account be decreased or that their account be closed, the company shall provide the borrower with confirmation in writing – in paper or electronic form – of the decrease or closure, as the case may be. 7 Section 439 of the Act is renumbered as subsection 439(1) and is amended by adding the following: Advertising re credit card (2) If the advertisement relates to a credit card, the following information shall be clearly and prominently displayed, easily legible and in distinct contrast to any other information shown on the advertisement: (a) the annual interest rate; (b) the annual fees charged in connection with the credit card; and (c) if there is a discount on the annual interest rate that is applicable to the credit card account, its dur­ation and the interest rate that is applicable once the discount ceases to apply. 1991, c. 47 Insurance Companies Act 8 The Insurance Companies Act is amended by adding the following after section 481: Calculating interest re credit card 481.‍1 (1) If, in respect of purchases of goods or services made on a credit card during a particular billing cycle, the borrower pays at least 95% of the outstanding balance owing on the credit card account on or before the due date for that cycle, the company may only charge interest on the difference between the outstanding balance on the due date and the amount of all payments made on or before that due date. Different interest rates (2) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the company shall apply, in respect of each of those amounts, the lesser of the interest rate applicable during that billing cycle and the interest rate applicable at the time of the purchase of the goods or services. Credit card statement (3) If a company has issued a credit card to a natural person, the company shall set out in the statement of account for that card, in a clear and prominent manner, the total of all amounts of interest paid by the person for the previous 12 billing cycles. Allocation of payments 481.‍2 If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the company shall first allocate any payment made by the borrower that is greater than the min­imum payment required for that billing cycle to the amount in respect of which the interest rate is highest and then allocate any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates. Consent for increase in credit limit 481.‍3 (1) A company may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent. Confirmation in writing (2) If the borrower’s consent to the increase is given verbally, the company shall, not later than the date of the first statement of account that is provided after the day on which verbal consent is obtained, provide confirmation of that consent to the borrower in writing, in paper or electronic form. Online banking – changes to account 481.‍4 If a company provides online banking, it shall make available to a borrower an electronic means to decrease the credit limit on their credit card account or to close their account. Confirmation in writing 481.‍5 If a borrower requests that the credit limit on their credit card account be decreased or that their account be closed, the company shall provide the borrower with confirmation in writing – in paper or electronic form – of the decrease or closure, as the case may be. 9 Section 483 of the Act is renumbered as subsection 483(1) and is amended by adding the following: Advertising re credit card (2) If the advertisement relates to a credit card, the following information shall be clearly and prominently displayed, easily legible and in distinct contrast to any other information shown on the advertisement: (a) the annual interest rate; (b) the annual fees charged in connection with the credit card; and (c) if there is a discount on the annual interest rate that is applicable to the credit card account, its dur­ation and the interest rate that is applicable once the discount ceases to apply. 10 The Act is amended by adding the following after section 600: Calculating interest re credit card 600.‍1 (1) If, in respect of purchases of goods or services made on a credit card during a particular billing cycle, the borrower pays at least 95% of the outstanding balance owing on the credit card account on or before the due date for that cycle, the foreign company may only charge interest on the difference between the outstanding balance on the due date and the amount of all payments made on or before that due date. Different interest rates (2) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the foreign company shall apply, in respect of each of those amounts, the lesser of the interest rate applic­able during that billing cycle and the interest rate applic­able at the time of the purchase of the goods or services. Credit card statement (3) If a foreign company has issued a credit card to a natural person, the foreign company shall set out in the statement of account for that card, in a clear and promin­ent manner, the total of all amounts of interest paid by the person for the previous 12 billing cycles. Allocation of payments 600.‍2 If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the foreign company shall first allocate any payment made by the borrower that is greater than the minimum payment required for that billing cycle to the amount in respect of which the interest rate is highest and then allocate any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates. Consent for increase in credit limit 600.‍3 (1) A foreign company may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent. Confirmation in writing (2) If the borrower’s consent to the increase is given verbally, the foreign company shall, not later than the date of the first statement of account that is provided after the day on which verbal consent is obtained, provide con­firmation of that consent to the borrower in writing, in paper or electronic form. Online banking – changes to account 600.‍4 If a foreign company provides online banking, it shall make available to a borrower an electronic means to decrease the credit limit on their credit card account or to close their account. Confirmation in writing 600.‍5 If a borrower requests that the credit limit on their credit card account be decreased or that their account be closed, the foreign company shall provide the borrower with confirmation in writing – in paper or electronic form – of the decrease or closure, as the case may be. 11 Section 601.‍2 of the Act is renumbered as subsection 601.‍2(1) and is amended by adding the following: Advertising re credit card (2) If the advertisement relates to a credit card, the following information shall be clearly and prominently displayed, easily legible and in distinct contrast to any other information shown on the advertisement: (a) the annual interest rate; (b) the annual fees charged in connection with the credit card; and (c) if there is a discount on the annual interest rate that is applicable to the credit card account, its dur­ation and the interest rate that is applicable once the discount ceases to apply. 1991, c. 48 Cooperative Credit Associations Act 12 The Cooperative Credit Associations Act is amended by adding the following after section 385.‍17: Calculating interest re credit card 385.‍171 (1) If, in respect of purchases of goods or services made on a credit card during a particular billing cycle, the borrower pays at least 95% of the outstanding balance owing on the credit card account on or before the due date for that cycle, the retail association may only charge interest on the difference between the outstanding balance on the due date and the amount of all payments made on or before that due date. Different interest rates (2) If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the retail association shall apply, in respect of each of those amounts, the lesser of the interest rate applic­able during that billing cycle and the interest rate applic­able at the time of the purchase of the goods or services. Credit card statement (3) If a retail association has issued a credit card to a natural person, the retail association shall set out in the statement of account for that card, in a clear and promin­ent manner, the total of all amounts of interest paid by the person for the previous 12 billing cycles. Allocation of payments 385.‍172 If different interest rates apply to different amounts owing for a particular billing cycle on a credit card account, the retail association shall first allocate any payment made by the borrower that is greater than the minimum payment required for that billing cycle to the amount in respect of which the interest rate is highest and then allocate any remaining portion of the payment to the other amounts in descending order, based on their applicable interest rates. Consent for increase in credit limit 385.‍173 (1) A retail association may not increase the credit limit on a borrower’s credit card account without first obtaining the borrower’s express consent. Confirmation in writing (2) If the borrower’s consent to the increase is given verbally, the retail association shall, not later than the date of the first statement of account that is provided after the day on which verbal consent is obtained, provide con­firmation of that consent to the borrower in writing, in paper or electronic form. Online banking – changes to account 385.‍174 If a retail association provides online banking, it shall make available to a borrower an electronic means to decrease the credit limit on their credit card account or to close their account. Confirmation in writing 385.‍175 If a borrower requests that the credit limit on their credit card account be decreased or that their account be closed, the retail association shall provide the borrower with confirmation in writing – in paper or electronic form – of the decrease or closure, as the case may be. 13 Section 385.‍2 of the Act is renumbered as subsection 385.‍2(1) and is amended by adding the following: Advertising re credit card (2) If the advertisement relates to a credit card, the following information shall be clearly and prominently displayed, easily legible and in distinct contrast to any other information shown on the advertisement: (a) the annual interest rate; (b) the annual fees charged in connection with the credit card; and (c) if there is a discount on the annual interest rate that is applicable to the credit card account, its dur­ation and the interest rate that is applicable once the discount ceases to apply. Coming into Force Six months after royal assent 14 This Act comes into force on the day that, in the sixth month after the month in which it receives royal assent, has the same calendar number as the day on which it receives royal assent or, if that sixth month has no day with that number, the last day of that sixth month. Published under authority of the Speaker of the House of Commons Publication Explorer Publication Explorer ParlVU