Appearance before the Standing Committee on Finance (July 7, 2020): Reporting information on relief measures

Issue

Many consumers have been financially impacted by the COVID-19 pandemic. Federally regulated financial entities responded by offering financial relief to its customers in large part by extending payment deferrals on a suite of credit products. FCAC has requested and continues to receive data from regulated entities on consumer relief measures as this information contributes towards FCAC’s mandate of supervising and monitoring banks and regulated entities with public commitments that are designed to protect the interests of their customers.

Background

As part of its supervisory activities, FCAC has been in regular contact with conglomerate banks (DSIBs) and small and medium sized banks (SMSBs) on measures implemented due to the COVID-19 pandemic. A standardized template was distributed to banks to provide FCAC with weekly statistics on financial relief offered by banks to consumers impacted by COVID-19. These include payment deferrals on mortgages and other credit products such as loans, lines of credit, and credit cards.

Data/Quick facts

• As of June 12, more than 549,000 credit card deferral requests are in process, and banks provided mortgage deferrals or skip-a-payment to more than 735,693 Canadians.
• Most DSIBs applied 6-month deferrals for mortgages, whereas most SMSBs applied a 3-month deferral initially with the possibility of extension at a later date.
• In contrast to DSIBs, the growth in demand for SMSB credit card deferrals is greater than that of all other SMSB product lines combined, including mortgages.

Key messages

• DSIBs have expressed a willingness to work with impacted consumers who have requested financial relief assistance to find ways to help them through this crisis.
• Some consumers that are not able to take advantage of payment deferrals are generally being offered alternative financial relief on a case by case basis.
• FCAC is proactively working with other federal regulators to reduce the reporting burden of financial institutions during the pandemic, while continuing to ensure the interests of consumers are protected by providing information and tools to help them make informed financial decisions.