Doing business with a bank means having to comply with regulations often stricter than the ones that are governing many other sectors of our economy. In the end, National Bank's compliance with these regulations are in your clients' best interests, even if this implies a certain rigidity in our work processes. Rest assured that we are doing our best to simplify the business relationship that unites all of us: the Bank, you and your clients.
Below is some important information to understand regarding our compliance with regulations. If you have any questions, please do not hesitate to contact one of the advisors at our Advisor Distribution Banking Center.
Identification of each Applicant and Guarantor
The “Proceeds of Crime (Money Laundering) and Terrorist Financing Act” (the Act) requires financial institutions to meet certain standards for identifying applicants wishing to open an account or benefit from a financial service.
In the presence of the individual to be identified
In order to establish an applicant’s identity, the Advisor must obtain two original identity documents from the individual to be identified. The description of these identity documents must be written in the appropriate section of the credit application.
The identity documents used to identify the applicants must be legible, valid and unexpired originals in good condition. Photocopies are not acceptable.
Please refer to one of our advisors to obtain the most recent list of identity documents for identification purposes.
It is required to determine if the requested product is to be on behalf of a person other than the applicants. When it is the case, it must be indicated in the proper section of the credit application and “Third party information appendix” (form 25536) must be completed and signed. This information is meant to allow the Bank, in accordance with the law, to determine if the Applicants open the account for their own financial activities or the financial activities of another person or entity.
Financial Consumer Agency of Canada (FCAC) Regulation
According to a new regulation from the Financial Consumer Agency of Canada (FCAC), which has been in effect since January 1st 2008, co-borrowers will be entitled to receive all regulatory information, including account statements.
Should that option be selected, the co-borrowers will receive the following:
- Welcome letter
- Cost of borrowing disclosure statement under Section 450 of the Bank Act
- Account statements
- Cost of Borrowing Disclosure Statement under Section 450 of the Bank Act
It is now required to provide to the applicant the Cost of Borrowing Disclosure Statement under Section 450 of the Bank Act at the time the credit application is completed and signed. This statement ensures the applicant is aware of all the costs related to the loan prior to entering into the loan agreement contained in the Credit Application.
Applicants are not required to sign the Cost of Borrowing Disclosure Statement, nor is National Bank to receive a completed copy for their files. It is only mandatory for the applicants to retain the statement with their copy of the application and all other related documents.
Note: The disclosure statement is a separate document from the credit application. The first section relates to the type of credit product and the clients. The second section is the Information box and the third section is the Cost of Borrowing Disclosure Statement.
FATCA stands for the Foreign Account Tax Compliance Act. FATCA is part of the U.S. HIRE Act, signed into law on March 18th, 2010 by President Obama.
The objective of this legislation is to identify U.S. persons who may evade U.S. taxes by placing assets in foreign (non-U.S.) accounts -- either directly or indirectly through certain foreign entities such as corporations or trusts
Canada's Department of Finance announced on February 5, 2014 that Canada and the United States have signed an Inter-Governmental Agreement (IGA) to improve international tax compliance and to implement the Foreign Account Tax Compliance Act (FATCA).