1. Canada Deposit Insurance Corporation (CDIC)
Canada Deposit Insurance Corporation (CDIC) is a federal Crown corporation created in 1967 to protect certain types of deposits up to $100,000, should a member financial institution go bankrupt.
National Bank of Canada is a member of the CIDC. Covered deposits comprise insurable deposits issued by National Bank. For further information concerning CDIC, please call 1-800-461-CDIC (2342) or visit www.cdic.ca.
2. Canada’s Anti-Spam Legislation (CASL)
Since July 1, 2014, the Anti-Spam Legislation (CASL) regulates the sending of Commercial Electronic Messages (CEMs) including promotional messages and newsletters that solicit engagement in commercial activity. Not respecting the Anti-Spam Law poses serious risks for the Bank: risks of non-compliance, financial risks, and reputational risks. Sanctions are in place for cases of non-compliance that can go up to $1M per violation for individuals, and $10M per violation for the Bank and its subsidiaries.
To be CASL-compliant, electronic messages to a client must contain a compliant signature that clearly identifies the entity who sent the message and an unsubscribe link that allows recipients to withdraw their consent to receive electronic messages from the sender.
Before sending an electronic message to a client, covered by CASL, the bank employees are required to check whether the recipient has consented to receiving such messages at the e-mail address in question.
CASL does not apply to electronic communications between business partners, in their professional capacity, and National Bank of Canada.
3. Cost of Borrowing Regulation: Disclosure Options Offered to Clients
Under the Cost of Borrowing Regulations, co-borrowers are entitled to receive all regulatory information, including statements for all credit accounts (not applicable to bank accounts).
Should a co-borrower wish to receive regulatory information, the following would be sent:
- Welcome letter
- Cost of borrowing disclosure statement under Section 450 of the Bank Act
- Credit account statements
- Other regulatory notices such as notices pertaining to a fee increase or a product change.
Two types of disclosures are available for the applicants:
- Separate disclosure: one copy for each of the co-borrowers (the default option)
- Single disclosure: one copy for all co-borrowers
Once the choice is made, it is always possible to request changes by contacting the Client Service Centre.
4. Cost of Borrowing Disclosure Statement under Section 450 of the Bank Act
The Bank is required to provide the applicant with the Cost of Borrowing Disclosure Statement under Section 450 of the Bank Act:
- Mortgage loans: COB must be provided 48 hours prior to signing the credit agreement as described in the paragraph below
- Credit cards: COB must be provided prior to the activation of the card but the information box must be provided with the credit application.
- Other credit: COB must be provided at the latest when the credit agreement is signed (not the credit application)
This statement ensures the applicant is aware of all the costs related to the credit prior to entering into the credit agreement contained in the Credit Application.
To comply with this regulation, an information box (pertaining to the product selected) is included in the statement of disclosure given to clients to ensure that all the information pertaining to the credit are indicated to all borrowers when the cost of borrowing is disclosed.
The applicant is not required to sign the Cost of Borrowing Disclosure Statement, nor is the Bank to receive a completed copy for their files. However, the Bank shall keep a copy in its files when sending the document to the client. It is only mandatory for the applicants to retain the statement with their copy of the application and all other related documents.
This regulation applies to all credit products including credit cards.
Delivery of the initial Cost of Borrowing Disclosure Statement for Mortgage Loans (Statement of disclosure 48 Hours for mortgage loans)
Whenever the Bank grants a mortgage loan, it must give the client a copy of the Cost of Borrowing Disclosure Statement at least two clear business days before the client’s meeting with the legal professional (lawyer or notary) to sign the credit agreement. The following do not count as clear business days:
5. Commitment to Provide Information on Mortgage Security
- The day on which the Cost of Borrowing Disclosure Statement is delivered,
- The day on which the credit agreement is signed,
- Saturdays, Sundays and holidays.
At the request of the Federal Finance Minister, since September 1, 2014, Canadian banks must provide information on the types of mortgage security available in Canada.
Under this commitment, the Bank is required to provide general information on the different types of mortgages on its website, branches/points of service and on request, and specific information at or before entering into the mortgage loan agreement.
Two brochures are available for clients upon request:
6. Mortgage Loan Indemnities
- Brochure F.29933 Information on the types of mortgages available for purchasing a residential property (general information)
- Brochure F.30025 Information on Your Mortgage (specific information)
On September4, 2012, Federal Finance Minister Jim Flaherty announced the implementation of a Code of Conduct for federally regulated financial institutions on Mortgage Prepayment Information. Some elements of the Code came into force in September 2012 while others came into force March 4, 2013 as the information provided when the borrower is paying a prepayment charge.
In order to comply with this Code of Conduct, the Bank is implementing measures intended to provide clear information and avoid the misleading of clients regarding the indemnities involved when prepaying a mortgage loan.
The Bank must also provide information on the methods available to clients to accelerate repayment of their mortgage without incurring a penalty. The code of conduct is regulatory measures to ensure that financial institutions clearly inform consumers and make them aware of the charges arising from prepaying their mortgage and to help them better appreciate the consequences.
The purpose of an indemnity is to compensate the Bank for any loss in revenue that may be caused by a pre-matured payout or change in conditions; the client agrees to a certain term, interest rate and loan amount, in any situation where one or all of these conditions are decreased, the Bank incurs a loss. Most financial institutions apply similar methods to calculate the indemnity amounts, these being the 3 months interest or the rate differential, depending on certain conditions.
The following tools are available for the clients:
7. Guideline B-20 – Residential Mortgage Underwriting Practices and Procedures
- Information available on the bank website
- Calculators are available on the bank website
- Payout statement containing information on indemnities
- Annual statements including information on indemnities
- Client care center with toll free number for additional questions on indemnities
As part of the requirements from the Office of the Superintendent of Financial Institutions (OSFI) to ensure borrower capacity to service debt obligations on a timely basis, the Bank has implemented automatic control of the mortgage lending ratios allowed for revolving credit.
Summary of the Guideline B-20:
8. Access to funds
- The maximum amount of mortgage financing for revolving (non-amortizing) credit (line of credit) is 65% of the value of the property financed.
- Any mortgage financing with a loan-to-value (LTV) ratio between 65.01% and 80% must be an amortized mortgage loan (ML) in order to respect the approved revolving (non-amortizing) credit limit.
- Any mortgage financing with a loan-to-value (LTV) ratio greater than 80% must be insured.
- The Bank’s system will ensure that the principal repaid does not cause the client to exceed the approved revolving (non-amortizing) credit limit.
The Bank is required by the Access to Funds Regulations to limit the hold on funds deposited by retail clients and eligible enterprises. This hold period can vary depending on the amount of the instrument and whether the deposit is made in person with an employee at one of the Bank’s branches or points of services or in any other manner.
The Bank must also allow the client to withdraw the first $100 of all funds deposited by cheque or other instrument to a retail deposit account:
- Immediately, if it is deposited in person with an employee at one of the Bank’s branches or points of service;
- On the following business day following the day of the deposit, if it is deposited in any other manner, e.g., banking machine.
In addition to complying with the above requirements, the Bank must, via its employees:
9. Dormant Account
- give the client a copy of its “Access to Funds Policy” when opening an account;
- display and make available to its clients and the public its “Access to Funds Policy”, via a written notice in all of its branches, points of service and website;
- In the event that the «Access to Funds Policy» cannot be applied, give the individual (retail client or enterprise):
- A notice of refusal which includes a statement indicating that the individual may contact the Financial Consumer Agency of Canada if he has a complaint, including contact information for the Agency.
An account becomes dormant if no transactions have been carried out for a year. This account may no longer be used by the client and it must be reactivated by contacting the Client Service Centre.
10. Refusal to open an account
The Bank sends a dormant account notice (in January of the 1st, 2nd, 5th and 9th year) to the client to find out what the customer intends to do. If the client replies within 60 days, no fees will be charged.
- If the fees exceed the account balance, the account is automatically closed.
- If the balance is still unclaimed after 9 years, it is transferred to the Bank’s Accounting Department which, in turn, transfers the balance to the Bank of Canada if it has not been claimed at the end of the tenth year. To claim an amount transferred to the Bank of Canada, please refer the client to Client Service Centre. Do not refer the client directly to the Bank of Canada.
Under the Access to Basic Banking Services Regulations, the Bank must open a deposit account for any individual who requests it, upon presentation of pieces of identification.
In some cases, the Regulations make provisions for exceptions that would allow the Bank to refuse to open a deposit account for a client.
The main obligations that the Bank must display and make available to its clients in every branch as well as on its website, the “Access to Basic Banking Services” leaflet stipulating:
- The conditions that must be met to open a deposit account;
- In the event that the Bank refuses to open an account, the individual must be given a notice indicating that the Bank refuses to open the account, including a statement indicating that the individual may contact the Financial Consumer Agency of Canada if he has a complaint, including contact information for the Agency.
11.Complaint Settlement Process for the clients
The Bank is committed to offering outstanding service to its business partners and its clients. The client’s needs and our relationship with them are very important to us. Our clients’ satisfaction is our goal.
We provide a simple and efficient complaint settlement process. The guide “For Better Banking Relations with You” is available to the clients and describes the complaint settlement process. The process is also given to the client when granting a product or service.
The simple complaint settlement process and the presence of the National Bank Ombudsman for clients are concrete proof of our commitment to client satisfaction.
12. Insurance Business
The Insurance Business Regulations prevent banks from promoting and selling non-authorized insurance products on their websites and in branches.
According to the Regulations, none of the web pages on the www.nbc.ca website may, directly or via another web page:
13. Consumer Loan Insurance–Distribution Guide (Quebec only) and Summaries (Outside Quebec and Quebec)
- Feature banners promoting non-authorized insurance products;
- Promote non-authorized insurance products; or
- Contain links that provide direct or indirect access to a page on another website, such as that of an insurer or insurance company, which promotes non-authorized insurance products for banks.
A copy of the Distribution Guide must be given to all new clients who purchase loan insurance.
It explains our loan insurance products, definitions, clauses and exclusions in clear and straightforward language.
For all provinces
According to the Negative Option Billing Regulations, a Summary of the specific financing product chosen must be provided to the client by the advisor along with the loan insurance certificate.
14. Commercial Banking: Identification of Clients when Opening a Product (ICOP)
ICOP has been established in 2009 by the sector of the corporate Compliance to conform to the regulations of Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) for the Commercial Banking. ICOP contains the following information:
- The Legal entity
- The related persons
- The accounts of the legal entity
ICOP also integrates the necessary elements needed to meet tax regulations like FATCA and CRS (please see section 22).
Today, the application is used by all business unit of the Bank, including Partnership, and answers needs beyond the respect for the various regulations. The quality of information entered in the application allows ICOP:
- To identify adequately our clients and their authorized representatives;
- To reduce delays caused by non-compliant inputs;
- To accelerate the processing of the requests of new products with up to date information in the application;
- To serve our customers more effective way.