Of the many things that frustrate the retail customers of Canada’s federally regulated banks, one of the most egregious has been the practice of putting a hold of as many as seven days on deposited cheques. Now, thanks to new measures recently and rather quietly announced by the federal Department of Finance, that upsetting practice and others are coming to an end.
As of Aug. 1, a bank will only be able to hold a cheque drawn on a Canadian bank in Canadian funds of less than $1,500 for four business days, and it will be obliged to make the first $100 available immediately if the cheque is deposited in person at a branch. If the cheque is deposited via ATM or other means, the first $100 must become available on the next business day.
Another regulation that is still in the proposal stage would ban unsolicited credit-card cheques, which arrive by mail and can cost an uninformed user high interest rates and fees. The government is also proposing a code of conduct obliging federally regulated lenders to provide clear information about mortgage pre-payment penalties. This includes making lenders post financial calculators on their websites that provide an estimate of pre-payment charges. (The code won’t apply to existing mortgages except “where it is feasible to do so”; and the banks have up to 12 months to implement the code once it is adopted.)
Along with other recent changes, such as requiring a customer’s consent before raising her credit card limit, the government has shown a commitment to its promise to improve banking regulations in Canadians’ favour. This is welcome news.Report Typo/Error
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