Bill C-38

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First Reading

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	Accounts
Definitions	385.05 The definitions in this section apply in this section, sections 385.1 to 385.13, 385.27 and 385.28.
``member association'' « association membre »	``member association'' means a retail association that is a member institution as defined in section 2 of the Canada Deposit Insurance Corporation Act.
``personal deposit account'' « compte de dépôt personnel »	``personal deposit account'' means a deposit account in the name of one or more natural persons that is kept by that person or those persons for a purpose other than that of carrying on business.
``retail deposit account'' « compte de dépôt de détail »	``retail deposit account'' means a personal deposit account that is opened with a deposit of less than $150,000 or any greater amount that may be prescribed.
Account charges	385.06 A retail association shall not, directly or indirectly, charge or receive any sum for the keeping of an account unless the charge is made by express agreement between the association and a customer or by order of a court.
Disclosure on opening account	385.07 (1) A retail association shall not open or maintain an interest-bearing deposit account in Canada in the name of any natural person unless the association discloses, in accordance with the regulations, to the person who requests the association to open the account, the rate of interest applicable to the account and how the amount of interest to be paid is to be calculated.
Exception	(2) Subsection (1) does not apply in respect of an interest-bearing deposit account that is opened with a deposit in excess of $150,000 or any greater amount that may be prescribed.
Disclosure in advertise- ments	385.08 No person shall authorize the publication, issue or appearance of any advertisement in Canada that indicates the rate of interest offered by a retail association on an interest-bearing deposit or a debt obligation unless the advertisement discloses, in accordance with the regulations, how the amount of interest is to be calculated.
Disclosure regulations	385.09 The Governor in Council may make regulations respecting
	(a) the manner in which and the time at which disclosure is to be made by a retail association of
	(i) interest rates applicable to debts of the association and deposits with the association, and
	(ii) the manner in which the amount of interest paid is to be calculated;
	(b) the manner in which any charges for the keeping of an account are to be disclosed by a retail association to its customers and when the disclosure is to be made; and
	(c) any other matters or things that may be necessary to carry out the requirements of sections 385.06 to 385.08.
Disclosure required on opening a deposit account	385.1 (1) Subject to subsections (2) to (4), a retail association shall not open a deposit account in the name of a customer unless, at or before the time the account is opened, the retail association provides in writing to the individual who requests the opening of the account
	(a) a copy of the account agreement with the association;
	(b) information about all charges applicable to the account;
	(c) information about how the customer will be notified of any increase in those charges and of any new charges applicable to the account;
	(d) information about the association's procedures relating to complaints about the application of any charge applicable to the account; and
	(e) any other information that may be prescribed.
Exception	(2) If a deposit account is not a personal deposit account and the amount of a charge applicable to the account cannot be established at or before the time the account is opened, the retail association shall, as soon as is practicable after the amount is established, provide the customer in whose name the account is kept with a notice in writing of the amount of the charge.
Exception	(3) If a retail association has a deposit account in the name of a customer and the customer by telephone requests the opening of another deposit account in the name of the customer, the retail association shall not open such an account unless it provides the customer orally with any information prescribed at or before the time the account is opened.
Disclosure in writing	(4) If a retail association opens an account under subsection (3), it shall, not later than seven business days after the account is opened, provide to the customer in writing the agreement and information referred to in subsection (1).
Right to close account	(5) A customer may, within 14 business days after a deposit account is opened under subsection (3), close the account without charge and in such case is entitled to a refund of any charges related to the operation of the account, other than interest charges, incurred while the account was open.
Regulations	(6) For the purposes of subsection (4), the Governor in Council may make regulations prescribing circumstances in which, and the time when, the agreement and information will be deemed to have been provided to the customer.
Disclosure of charges	385.11 A retail association shall disclose, in the prescribed manner and at the prescribed time, to its customers and to the public, the charges applicable to deposit accounts with the association and the usual amount, if any, charged by the association for services normally provided by the association to its customers and to the public.
No increase or new charges without disclosure	385.12 (1) A retail association shall not increase any charge applicable to a personal deposit account with the association or introduce any new charge applicable to a personal deposit account with the association unless the association discloses the charge in the prescribed manner and at the prescribed time to the customer in whose name the account is kept.
No increase or new charges without disclosure	(2) With respect to such services in relation to deposit accounts, other than personal deposit accounts, as are prescribed, a retail association shall not increase any charge for any such service in relation to a deposit account with the association or introduce any new charge for any such service in relation to a deposit account with the association unless the association discloses the charge in the prescribed manner and at the prescribed time to the customer in whose name the account is kept.
Application	385.13 Sections 385.1 to 385.12 apply only in respect of charges applicable to deposit accounts with the retail association in Canada and services provided by it in Canada.
	Borrowing Costs
Definition of ``cost of borrowing''	385.14 For the purposes of this section and sections 385.15 to 385.24, ``cost of borrowing'' means, in respect of a loan made by a retail association,
	(a) the interest or discount applicable to the loan;
	(b) any amount charged in connection with the loan that is payable by the borrower to the association; and
	(c) any charge prescribed to be included in the cost of borrowing.
	For those purposes, however, ``cost of borrowing'' does not include any charge prescribed to be excluded from the cost of borrowing.
Rebate of borrowing costs	385.15 (1) If a retail association makes a loan in respect of which the disclosure requirements of section 385.16 apply and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the association shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan.
Exception	(2) The charges to be rebated do not include the interest or discount applicable to the loan.
Regulations	(3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations.
Disclosing borrowing costs	385.16 (1) A retail association shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 385.17, and other prescribed information have in the prescribed manner and at the prescribed time been disclosed by the association to the borrower.
Non-applicati on	(2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans.
Calculating borrowing costs	385.17 The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents.
Additional disclosure	385.18 (1) If a retail association makes a loan in respect of which the disclosure requirements of section 385.16 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the association shall disclose to the borrower, in accordance with the regulations,
	(a) whether the borrower has the right to repay the amount borrowed before the maturity of the loan and, if applicable,
	(i) any terms and conditions relating to that right, including the particulars of the circumstances in which the borrower may exercise that right, and
	(ii) whether, in the event that the borrower exercises the right, any portion of the cost of borrowing is to be rebated, the manner in which any such rebate is to be calculated or, if a charge or penalty will be imposed on the borrower, the manner in which the charge or penalty is to be calculated;
	(b) in the event that an amount borrowed is not repaid at maturity or, if applicable, an instalment is not paid on the day the instalment is due to be paid, particulars of the charges or penalties to be paid by the borrower because of the failure to repay or pay in accordance with the contract governing the loan;
	(c) at such time and in such manner as may be prescribed, any changes respecting the cost of borrowing or the loan agreement as may be prescribed;
	(d) particulars of any other rights and obligations of the borrower; and
	(e) any other prescribed information, at such time and in such form and manner as may be prescribed.
Disclosure in credit card applications	(2) A retail association shall, in accordance with the regulations, at such time and in such manner as may be prescribed, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards and provide prescribed information to any person applying to it for a credit, payment or charge card.
Disclosure re credit cards	(3) If a retail association issues or has issued a credit, payment or charge card to a natural person, the association shall, in addition to disclosing the costs of borrowing in respect of any loan obtained through the use of the card, disclose to the person, in accordance with the regulations,
	(a) any charges or penalties described in paragraph (1)(b);
	(b) particulars of the person's rights and obligations;
	(c) any charges for which the person becomes responsible by accepting or using the card;
	(d) at such time and in such manner as may be prescribed, any changes respecting the cost of borrowing or the loan agreement as may be prescribed; and
	(e) any other prescribed information, at such time and in such form and manner as may be prescribed.
Additional disclosure re other loans	(4) If a retail association enters into or has entered into an arrangement, including a line of credit, for the making of a loan in respect of which the disclosure requirements of section 385.16 apply and the loan is not a loan in respect of which subsection (1) or (3) applies, the association shall, in addition to disclosing the costs of borrowing, disclose to the person to whom the loan is made, in accordance with the regulations,
	(a) any charges or penalties described in paragraph (1)(b);
	(b) particulars of the person's rights and obligations;
	(c) any charges for which the person is responsible under the arrangement;
	(d) at such time and in such manner as may be prescribed, any changes respecting the cost of borrowing under the arrangement as may be prescribed; and
	(e) any other prescribed information, at such time and in such form and manner as may be prescribed.
Renewal statement	385.19 If a retail association makes a loan in respect of which the disclosure requirements of section 385.16 apply and the loan is secured by a mortgage on real property, the association shall disclose to the borrower, at such time and in such manner as may be prescribed, such information as may be prescribed respecting the renewal of the loan.
Disclosure in advertising	385.2 No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 385.18(4), loans, credit cards, payment cards or charge cards, offered to natural persons by a retail association, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement contains such information as may be required by the regulations, in such form and manner as may be prescribed.
Regulations re borrowing costs	385.21 The Governor in Council may make regulations
	(a) respecting the manner in which, and the time at which, a retail association is to disclose to a borrower
	(i) the cost of borrowing,
	(ii) any rebate of the cost of borrowing, and
	(iii) any other information relating to a loan, arrangement, credit card, payment card or charge card referred to in section 385.18;
	(b) respecting the contents of any statement disclosing the cost of borrowing and other information required to be disclosed by a retail association to a borrower;
	(c) respecting the manner of calculating the cost of borrowing;
	(d) respecting the circumstances under which the cost of borrowing is to be expressed as an amount in dollars and cents;
	(e) specifying any class of loans that are not to be subject to section 385.15, subsection 385.16(1) or 385.18(1) or (4) or section 385.19 or 385.2 or the regulations or any specified provisions of the regulations;
	(f) respecting the manner in which and the time at which any rights, obligations, charges or penalties referred to in sections 385.15 to 385.2 are to be disclosed;
	(g) prohibiting the imposition of any charge or penalty referred to in section 385.18 or providing that the charge or penalty, if imposed, will not exceed a prescribed amount;
	(h) respecting the nature or amount of any charge or penalty referred to in paragraph 385.18(1)(b), (3)(a) or (4)(a) and the costs of the retail association that may be included or excluded in the determination of the charge or penalty;
	(i) respecting the method of calculating the amount of rebate of the cost of borrowing, or the portion of the cost of borrowing referred to in subparagraph 385.18(1)(a)(ii);
	(j) respecting advertisements made by a retail association regarding arrangements referred to in subsection 385.18(4), loans, credit cards, payment cards or charge cards;
	(k) respecting the renewal of loans; and
	(l) respecting such other matters or things as are necessary to carry out the purposes of sections 385.15 to 385.2.

Bill C-38

Accounts

Borrowing Costs