The consumer watchdog for Canada’s banking industry has opened a 30-day consultation period for proposed new rules to govern how complaints against the big banks are handled.
The federal government is proposing a set of new standardized rules, and Ottawa is formally giving banks permission to pick who will hear customer disputes.
The new rules follow the departure of the Royal Bank in 2008 and Toronto-Dominion in 2011 from having complaints heard by the federally appointed Ombudsman for Banking Services and Investments in favour of ADR Chambers, an independent dispute-settlement service.
The government will allow other private agencies to enter the field of adjudicating consumer complaints as long as they meet certain standards.
On Friday, the Financial Consumer Agency of Canada announced it has begun consultation on a proposed guide for applicants to become external complaints bodies for the banks, which will run from July 27 to Sept. 10.
It also announced a 30-day consultation period for proposed guidance on the internal dispute resolution procedures of federally regulated financial institutions.
Under the new framework for handling complaints against the bank, expected to come into force following the 30-day consultation process, dispute-settling bodies must be federally approved and will come under the supervision of the Financial Consumer Agency of Canada.
They will also be required to make their decisions sooner and meet standards of independence and transparency.
The Finance Department has said the new rules will give more power to consumers and create a stronger, independent complaint system.