With the impact of the affordability crisis being felt across the income spectrum, there has been significant federal government attention to the cost of living, consumer protection and ensuring people are treated fairly by their banks. Prosper Canada has continued to elevate the impact that the affordability crisis is having on people with low incomes to the federal government.
Over the past few months, Prosper Canade made submissions to three separate government consultations, including:
Consultation on Upholding the Integrity of Canada’s Financial Sector
Consultation on Cracking Down on Predatory Lending Faster by Further Lowering the Criminal Rate of Interest and Increasing Access to Low-Cost Credit
Recommendations for improved low-cost bank accounts
As part of our response to Finance Canada’s consultation on upholding the integrity of the financial sector, we are encouraging Finance Canada, and the Government of Canada more broadly, to widen its policy aperture and to consider actions that are needed to help financially struggling households weather the current storm and, over the longer term, rebuild their financial stability, health, and resilience against future economic shocks.
Our proposal outlines key concerns and makes recommendations with respect to:
Making household financial health a central policy focus for the federal government
Closing Canada’s financial help gap for people with low incomes
Broadening financial inclusion to better protect consumers
Accelerating digital inclusion efforts to support financial inclusion.
In Budget 2023, the government indicated their intention to reduce the criminal rate of interest and has held further consultations on lowering the criminal rate of interest, as well as opportunities to increase access to low cost, small value credit and reducing junk fees that can negatively affect low-income consumers. We know that predatory lenders take advantage of some of the most vulnerable people in society. Our submission to the Consultation on Cracking Down on Predatory Lending Faster by Further Lowering the Criminal Rate of Interest and Increasing Access to Low-Cost Credit outlines the need to have a whole of ecosystem perspective on how to curtail predatory lending, including the availability of safe alternative product in the marketplace and shares some examples we can learn from.
Finally, Prosper Canada shared with the Financial Consumer Agency of Canada (FCAC) our recommendations for improved access to low-cost bank accounts. Our recommendations draw heavily on the highly successful BankON Account standards developed in the U.S. which has specific recommended account features designed to be safe and affordable for consumers.