DESPITE vociferous concerns from Canada’s privacy commissioner and the Canadian Association of Mutual Insurance Companies, the Senate has passed the federal budget implementation bill without further amendments.
It includes changes to the Bank Act that will give greater flexibility for deposit-taking institutions’ use of financial technology.
The Senate committee on banking, trade and commerce had been studying the bill since early May and heard from insurance industry stakeholders CAMIC and the Insurance Brokers Association of Canada, Privacy Commissioner Daniel Therrien and various banking sector stakeholders.
While IBAC reinforced its main lobbying point to senators — that banks should not be allowed to sell insurance at the point of granting credit — it maintained that the budget bill did not threaten that cornerstone of the federal Bank Act.
However, when IBAC ceo Peter Braid spoke before the committee he said the legislation will need further restrictions through regulation to prevent banks from circumventing the restriction.
“We would like the regulations to clarify that fintech entities will be subject to the same restrictions as banks when it comes to retailing insurance or making referrals,” Mr. Braid told Thompson’s recently.
“Technology moves at a rapid pace, so it will be important to ensure that the legislation and regulations are drafted to take into account future innovations.”
CAMIC is not convinced that regulations are sufficient to stop banks from circumventing the Bank Act and neither is the privacy commissioner.
CAMIC had asked senators to withdraw from the bill two provisions that would allow banks to share customers’ data with financial technology companies. It was CAMIC that brought the matter to the attention of the privacy commissioner, who told senators the budget bill may end up facilitating dealings between banks and financial technology organizations that may not offer enough privacy safeguards.
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