Appeal by bank from decision of Commissioner of Financial Consumer Agency of Canada finding bank had contravened Cost of Borrowing (Banks) Regulations (Can.), and imposing administrative penalty. Agency had been created pursuant to Financial Consumer Agency of Canada Act. Bank was subject to jurisdiction of agency. Regulations were passed to require financial institutions to include information disclosure boxes in their disclosure documentation for lending products. Agency sent letter to financial institutions indicating they could self-report their compliance and that agency would work with banks that self-reported non-compliance. Bank represented that it was compliant but it was not. Deputy Commissioner issued notice of violation to bank indicating reasonable grounds to believe bank had failed to utilize compliant information disclosure boxes. Bank made submissions. Commissioner found contravention of Regulations and imposed administrative penalty in amount of $12,500. Appeal dismissed. Bank failed to establish reviewable errors. Letter from agency had not contained any commitment, either explicit or implicit, upon which bank could claim expectation of opportunity to remedy deficiencies prior to issuance of notice of violation. Quite to contrary, agency had followed process it had committed to follow. Bank had knowledge of case it had to meet and had been given full opportunity to respond to that case. Agency had not misconstrued requirements in regulations. Strict reading of regulations was more consistent with overriding purpose of Act and Regulations. It was clear and undisputed that bank’s information disclosure boxes had failed to comply with Regulations in number of ways. Commissioner had not erred in her application of defence of due diligence. Steps taken by bank had not amounted to all reasonable steps to avoid non-compliance. Commissioner had not erred in finding some harm arising from bank’s customers having not received benefit of complete and accurate disclosure. Commissioner had properly considered relevant factors when determining penalty.
Mega International Commercial Bank (Canada) v. Canada (Attorney General)
(Apr. 11, 2012, F.C., de Montigny J., File No. T-459-11) 215 A.C.W.S. (3d) 179 (34 pp.).