FOR IMMEDIATE RELEASE
STOP MAKING EXCUSES ABOUT SERVICE TO POOR PEOPLE,
SAYS NATIONAL COUNCIL OF WELFARE REPORT ON BANKING
Canada's banks and other financial institutions should stop making
excuses and get serious about providing services to poor people, says a
report by the National Council of Welfare published today.
The Canadian Bankers Association and the head offices of its member
banks have promised repeatedly to make it easy for people to open
accounts or cash cheques, but their commitments are routinely ignored by
branch banks, says the report, Banking and Poor People: Talk Is Cheap.
The basic problem is that too many bank employees at too many branches
refuse to accept the types of identification presented by poor people -
contrary to the policies laid down by their own head offices.
"Survey after survey has shown widespread ignorance and disregard for
head office policies on identification. Most of the survey results are
unequivocal. Breaches of policy are the rule rather than the
exception."
The bankers association is taking more aggressive measures
to bring wayward branches into line with inserts about opening accounts
and cashing cheques that are being mailed with federal government
cheques this summer and fall.
. . ./2 Recipients are being urged to show the inserts to any
bank staff members who seem unaware of their employer's stated
policies. The inserts are issued under the authority of the federal
Minister of Finance and include toll-free numbers to call to complain
about breaches in policy.
The National Council of Welfare says deviations from head office policy
simply should not be tolerated.
The report also calls for financial institutions to start offering
"no-frills accounts" that would guarantee consumers 16 basic
transactions a month for a fee of $2. It urges the federal government
to impose a moratorium on branch bank closings to ensure that access to
service does not deteriorate further, and it recommends that an
independent consumer advocate's office be created to resolve consumer
complaints.
The Council stops just short of calling for an outright ban on bank
mergers. It recommends that no mergers be approved unless the federal
government is "absolutely convinced" that they are in the public
interest.
"The National Council of Welfare can see no public good arising from
the banks' current obsession with mergers, but it
does fear that poor people, poor communities, bank employees and even
bank stockholders could feel the pinch if the merger plans
are not blocked by the federal government," the report says.
One reason for not allowing the mergers proposed earlier this year
would be to curb the financial and political clout of Canada's largest
financial institutions.
"It is disturbing to hear financial analysts already raising questions
about the ability of the federal government - the symbol of our
democratic ideals as a nation - to block mergers of federally chartered
financial institutions. If the Royal Bank
of Canada and the Bank of Montreal are already beyond the control of the
government which issued their charters, imagine what the mega-banks of
tomorrow might do."
. . ./3 One chapter of the report deals exclusively with ways to
make financial institutions accountable to the public for their
decisions on loans and credit. It proposes that all financial
institutions publish detailed information on housing and consumer loans
and loans and lines of credit to small and medium-sized businesses. The
information for personal loans should include applications, approvals
and rejections, and should be available
in each census tract by the sex and income class of applicants. The
information on business loans should be available by census tract and
the type and size of businesses.
The purpose of these sweeping disclosure requirements is
to answer definitively the question of whether banks and other
institutions do a good job of serving the needs of low-income people and
businesses in low-income neighbourhoods.
"If financial institutions are as good as the industry claims, this
kind of information would be proof positive. If they really do not
measure up to their rhetoric, the information would warn consumers and
governments alike that remedial action needs to be taken."
Similar disclosure requirements have been in force in the United States
for many years under the Community Reinvestment Act and the Home
Mortgage Disclosure Act.
The National Council of Welfare is a citizens' advisory group to the
Minister of Human Resources Development.
____________________________________
For further information, contact:
National Council of Welfare
1010 Somerset Street West, 2nd Floor
Ottawa K1A 0J9
(613) 957-2961
--
Joanne Roulston, M.S.W.
Senior Researcher and Policy Advisor/
Conseillère principale en politiques et recherche
National Council of Welfare/Conseil national du bien-être social
Government of Canada/Gouvernement du Canada
1010, rue Somerset Street West/ouest, Ottawa, Ontario K1A 0J9
phone (613) 957-0679, fax/télécopieur (613) 957-0680
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