Decision #35434-838Q204

File: 35434-828Q204

Compliance issue

Accounts – Refusal to open
Bank Act, s 448.1(1)
Access to Basic Banking Services Regulations, ss. 3(1), 4

A bank refused to open a retail deposit account for a consumer despite her having presented four pieces of approved identification.

Subsection 448.1(1) of the Bank Act requires banks which are members of the Canada Deposit Insurance Corporation and which open retail deposit accounts through a natural person to open an account for consumers who meet the requirements set out in section 4 of the Regulations.

Subsection 3(1) of the Regulations sets out exceptions to section 448.1(1) of the Bank Act and stipulates that a bank may refuse to open a bank account if:

• the bank has reasonable grounds to believe that the account will be used for illegal or fraudulent purposes; and/or
• the client has a history of such behaviour in relation to financial services within the past seven years; and/or
• the client knowingly made material misrepresentation in the information provided when opening the account or the institution refused the account in order to protect the customers or employees from physical harm, harassment or other abuse.

Section 4 of the Regulations states that consumers can open a retail deposit account if they go to the bank in person and present acceptable identification.^{Footnote 1}

Decision taken

A Letter of Reprimand^{Footnote 2} , noting one violation against the bank.

Compliance considerations

At the time of the incident, the bank had implemented new procedures and trained employees to ensure that the Regulations were met. The refusal was the result of the actions of one employee who did not follow the bank’s procedures. As such, the case was considered as an isolated incident, and not a systemic problem.

Measures taken by financial institution

As a result of being made aware of the incident by Financial Consumer Agency of Canada (FCAC), the Branch Manager:

• re-trained the employee responsible for the incident on account-opening policies and procedures;
• contacted the customer and invited her to return to open the account;
• reviewed the account-opening process with all branch staff.

Outcomes

The Government of Canada established the Access to Basic Services Banking Regulations because having a bank account is essential to the management of personal finances. Consumers who have access to a bank account are able to participate more effectively in the financial marketplace. As a result of the measures taken by the bank, branch personnel are better trained in meeting their obligations under the law.