Appearance before the Standing Committee on Finance (July 7, 2020): Branch closures

Issue

In response to the COVID-19 pandemic, banks have implemented precautionary measures to protect consumers and ensure the health and safety of their employees and communities, such as reduced hours, services, and temporary closures of branch locations.

Background

• On March 17, 2020, the Canadian Bankers Association (CBA) announced precautionary measures being taken by banks to reduce the spread of COVID-19 and protect their staff and consumers.
• Banks closed branches for a variety of reasons: workers’ inability to work, building access, health and safety of employees, etc.
• Open branches often operated with reduced hours.

Data/Quick facts

• Closures varied by Federally Regulated Financial Institution (FRFI), with some banks closing almost 40% of their branches and others closing less than 5% of their branches. Closures were concentrated in urban areas.
• Banks shifted to a “work from home” model. Most staff who have the ability to work from home are now doing so.
• Most bank services are available through other channels (e.g., mobile or online banking).
• Vulnerable groups are often affected disproportionately by branch closures.

Key messages

• Bank branches are important for financial consumers, and vulnerable groups are often affected disproportionately by branch closures.
• Banks have implemented precautionary measures to protect consumers and ensure the health and safety of their employees and communities, such as reducing operating hours and temporarily closing branch locations.
• Banks have also offered special branch times to seniors and vulnerable groups, and focused on keeping branches in rural areas open.
• While banks have started to re-open branches, considering a number of factors such as available staff and health guidelines, there may be concerns that some banks are considering permanently closing branches instead of reopening them. FCAC will monitor this closely and ensure existing laws are applied (e.g. rules for adequate notice and consultations).