If you're one of the six in 10 Canadians who live paycheque to paycheque, you probably understand the frustration of having to wait a week for those cheques to clear. That frustration should soon be alleviated by new regulations that reduce the maximum holding period for cheques of $1,500 or less.
Ottawa announced on Tuesday it is implementing the Access to Funds Regulations, which will cut the cheque-hold period from seven business days to four, and will provide consumers with immediate access to the first $100 deposited with a bank teller. For cheques deposited at an ATM, the first $100 will be available the next day. Cheques for more than $1,500 will be subject to the old rules.
In addition, the government also announced new Negative Option Billing Regulations, which will require federally regulated financial institutions to obtain consumers' express consent before providing any new optional product or service. They will be required to state all fees and costs involved up front and will not be allowed to automatically enroll customers.
"All we're saying is we want transparency and we want consumers to know what services they're being offered," said Ted Menzies, Minister of State (Finance).
The new regulations will protect consumers by giving them timelier access to their money, Mr. Menzies said. They will most greatly benefit "those with a new account, like students, new businesses, that maybe aren't long-standing clients of a bank."
Those are often the customers who most need quick access to their money. According to a poll by the Canadian Payroll Association, 59 per cent of Canadian workers say they would be in financial trouble if their paycheque was delayed by just a week.
The new regulations are subject to a 30-day comment period that starts Saturday. Mr. Menzies said once that period has passed, the government plans to implement the new regulations quickly. Financial institutions that are not federally regulated will not fall under the new regulations.