Skip to main content

Globe editorial: Chartered banks should not be allowed to pick their own referees

Canada’s banks are rock-solid, immensely profitable and occasionally hell to deal with.

Ask anybody with a chequing or savings account: Ironing out a problem with one’s financial institution is no longer as simple as strolling into the local branch manager’s office.

So the news that yet another big bank is opting to break with the country’s not-for-profit national banking ombudsman is not great for consumers.

Story continues below advertisement

The Bank of Nova Scotia is following the lead of the Royal Bank of Canada and Toronto-Dominion Bank and withdrawing from the Ombudsman for Banking Services and Investments (OBSI) in favour of a private, for-profit customer-complaint arbiter.

This is happening because federal rules allow it. Groups representing a range of interests, from consumer advocates and seniors’ activists to shareholder-rights organizations, argue it’s time Ottawa changed those rules.

They’re right. Our banks should not be allowed to choose their own umpires. Ottawa should make them stick with the OBSI.

There are good reasons for this. The indispensability of banks already puts customers at a disadvantage. As well, Canada’s chartered banks are robust and stable in large part because of the federal rules that both heavily regulate them and shield them from competition. Canadian consumers are owed a mechanism for dispute resolution that is not only fair but is perceived to be fair.

According to the OBSI, consumer complaints about things like excessive fees, unsatisfactory service and inscrutable mortgage penalties rose 28 per cent in 2017. At the same time, successful petitions for redress amounted in total to $165,000 in compensation last year. The OBSI is not exactly pushing banks to the brink of insolvency.

Plus, the pace of change is accelerating in the industry. A 2017 Canadian Bankers Association survey found 51 per cent of us primarily conduct financial transactions on the internet. Another 17 per cent rely on mobile devices.

Modern banking requires little human contact these days, which is all the more reason customers need someone they can rely on when they need help.

Story continues below advertisement

Editor’s note: An earlier version of this online editorial referred to the Canadian Banking Association. It is the Canadian Bankers Association. This version has been corrected.
Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter