Financial Consumer Agency of Canada

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Our programs

Compliance Supervision and Enforcement

Ensuring the rights and interests of financial consumers are respected

To help protect consumers of financial products and services, the federal government has enacted a number of laws and regulations. These ensure that regulated financial entities provide the information needed by consumers to make sound financial decisions, and that the entities meet a high standard in business practices that affect their customers.

One of FCAC's key responsibilities is to monitor and enforce compliance with the laws and regulations, and we meet this responsibility through our Compliance Supervision and Enforcement program. Program activities include:

• monitoring and investigating compliance issues at an industry-wide level as well as the level of individual financial entities;
  
  
• undertaking annual and on-site examinations;
  
  
• engaging with financial entities to promote greater compliance in the marketplace, and encouraging them to develop effective internal policies and practices and to implement consumer-centred compliance measures;
  
  
• monitoring the codes of conduct and voluntary public commitments to which financial entities have agreed to adhere; and
  
  
• engaging with other regulators within the Canadian financial services sector on key compliance matters and providing input to the federal government on regulatory initiatives that affect financial consumers.
  
  

Performance

As a regulator, FCAC uses a risk-based approach to supervise the conduct of financial entities, working with them to identify and resolve compliance issues. During 2010–11, we investigated 860 cases for potential compliance violations, up from 821 the previous fiscal year. We also carried out a record 77 compliance measures to address situations of non-compliance. These measures included on-site examinations, compliance agreements and action plans. In most cases, institutions took the steps needed to achieve compliance. FCAC also undertook a number of enforcement actions amounting to 36 findings of violation, which resulted in $175,000 in penalties being received and processed during fiscal year 2010–11.

In carrying out our Compliance Supervision and Enforcement mandate, we hold ourselves to high standards of service and efficiency. FCAC succeeded in meeting these standards in 2010–11. For results, please see the performance summary.

Major Initiatives

• Launch of Risk Assessment Model. We launched our new Risk Assessment Model (RAM), designed to help FCAC better assess financial institutions' compliance risks. This internal tool allows us to evaluate the comparable risk for each institution relative to all other financial institutions as well as to subsets, or "peer groups," of firms engaged in comparable activities. Key work last year included finalizing and testing the technical programming of the model, training staff, collecting data from financial institutions, and initiating the first run of RAM reports. The results will help us refine and enhance the model.
  
  
• Integration of new supervisory responsibilities. The federal government passed important legislation that gave FCAC two new oversight responsibilities:
  
  
  • for the Payment Card Network Act, which governs payment card network operators (PCNOs) such as Visa, MasterCard, Interac, American Express, The Exchange and Discover; and
    
    
  • for the Code of Conduct for the Credit and Debit Card Industry in Canada(CDC Code), which sets out principles to be followed by PCNOs and members of their networks in delivering payment card services to merchants in Canada.
    
    
  FCAC worked to integrate these additional functions into our supervisory systems and processes. We also informed PCNOs and their members about FCAC's role, the impact of the regulatory changes and their new responsibilities, and we worked with them to implement all the elements set out in the CDC Code.
  
  
• Proactive compliance. One of our ongoing priorities is to ensure compliance with recent consumer protection requirements set out in the Cost of Borrowing Regulations and the Credit Business Practices Regulations. We undertook supervisory activities to confirm the compliance responses provided by financial entities during our initial assessment process, and to address any identified compliance deficiencies.
  
  
• Refinement of Compliance Framework. In an effort to deliver a strong, consistent and effective compliance program, we continued to refine and modernize FCAC's Compliance Framework. Last year, we evaluated our compliance processes to identify areas for improvement. We documented and communicated the procedures that we are required to follow to ensure that they are understood by both employees and external stakeholders, and we strengthened our communications with financial entities.
  
  

Benefits to Canadians

In 2010–11, FCAC's Compliance Supervision and Enforcement program produced the following benefits:

• Through our case management process and ongoing improvements to it, we helped ensure that consumer complaints and key systemic compliance issues were identified and addressed by the relevant financial entities.
  
  
• Using our array of compliance tools (compliance agreements, action plans, etc.), we were successful in triggering positive behavioural changes at a number of financial entities, as well as an overall improvement in their compliance with applicable legislation and regulations.
  
  
• With implementation of a risk-based approach to supervision, we have become more targeted, proactive and timely in dealing with possible compliance matters.
  
  
• We took a proactive approach to educating financial entities about new regulatory requirements, such as the Cost of Borrowing Regulations and the Payment Card Network Act. The approach helped to minimize non-compliance and to limit any negative impact on financial consumers.
  
  
• With a robust and responsive regulatory framework in place, we were able to protect financial consumers and foster competition in the marketplace.
  
  

Consumer Information and Development of Financial Skills

Ensuring financial consumers understand their rights and responsibilities and make informed decisions

FCAC's Consumer Information and Development of Financial Skills program focuses on increasing the financial abilities of Canadians. Two sub-activities work together to meet this broad goal:

• Our Consumer Education program helps Canadians better understand specific financial products and services, such as mortgages and credit cards. It also helps familiarize them with the rights and responsibilities of consumers in their dealings with financial institutions, and with the obligations of payment card network operators.
  
  
• Our Financial Literacy program helps Canadians build their basic or foundational knowledge, skills and confidence in money management so that they can make sound decisions about such things as spending, saving and investing.
  

Through both, we offer free educational resources and tools designed to provide timely and objective financial information that enables Canadians to actively and confidently participate in the financial marketplace.

Examples of FCAC resources for Canadians

Consumer Education

Through FCAC's Consumer Education program, we offer Canadians objective information about commonly used financial products and services, and increase consumers' awareness of their rights and responsibilities in the financial marketplace.

To reach as many Canadians as possible, we:

• develop and distribute information resources in a variety of formats (print, electronic, Web);
  
  
• collaborate with public, private and not-for-profit organizations across the country to target specific groups, particularly more vulnerable consumers such as those with lower literacy levels and/or lower incomes;
  
  
• build solid relationships with the media, which help us share financial information quickly and cost-effectively; and
  
  
• maintain a Consumer Contact Centre and a Correspondence Unit to assist Canadians who have questions or concerns about financial products, services and issues.
  
  

Performance

In 2010–11, our Consumer Education program continued to have a positive impact as more and more Canadians accessed information provided by FCAC. Public opinion research showed that overall consumer satisfaction with FCAC's publications and interactive tools remained strong, exceeding our target of 3.5 on a 5-point scale. Ratings for our interactive online tools were particularly high, ranging from 4.1 to 4.8 out of 5. In the case of our new budget tool, the average consumer rating for clarity and ease of understanding was 4.8 out of 5. The research also confirmed that Canadians find FCAC's publications and interactive tools to be clear and understandable.

For more details, please see the performance summary.

Major initiatives

• Updates to consumer resources. We reviewed most of our consumer education resources and made revisions as necessary to ensure that they met FCAC's new clear language and presentation principles. We also revised our website and several publications to reflect the credit card and loan regulations that came into force on September 1, 2010. New resources launched last year included a tip sheet on prepaid cards, a primer about insurance and an interactive budget tool.
  
  
• Home buyers campaign. We launched a public awareness campaign to target first-time home buyers and young families renewing mortgages. The initiative consisted of helpful mortgage information and interactive tools, as well as targeted Internet advertising and ads in public transit in Toronto, Vancouver and Ottawa. (Our research identified the three cities as having the highest appetite for this information.)
  
  
• Web renewal strategy. The Internet is a key distribution channel for FCAC. Our Consumer Education team helped to design FCAC's website, making it more powerful, interactive, accessible and navigation-friendly. The revamped site organizes information according to key life events. With this format, it is easier and faster for users to find what they need to know to make informed financial decisions.
  
  
• External Stakeholder Advisory Committee. To obtain timely information on financial consumer trends and issues, we set up an External Stakeholder Advisory Committee. The members are consumer organization representatives, financial sector experts, analysts, academics and financial journalists.
  
  
• Community outreach. We researched and actively pursued outreach opportunities to promote the Agency and its financial education resources. FCAC representatives participated in eight speaking engagements and five consumer shows, and delivered 26 presentations to current and potential partners in the voluntary sector. We also exhibited at seven mortgage industry trade shows, allowing us to highlight FCAC as a leading source of reliable and unbiased mortgage information.
  
  
• Google AdWords campaign. The objective of this campaign was to increase Canadians' awareness of FCAC and our resources relating to debt management and mortgages. The campaign ran for four months and successfully generated 20,500 unique visits to FCAC's website during that time.
  

Benefits to Canadians

In 2010–11, FCAC's Consumer Education program produced the following benefits:

• Canadians from all walks of life were able to access free information on diverse financial topics through several channels.
  
  
• More Canadians learned about their rights and responsibilities, and became better equipped to make informed financial decisions.
  
  
• FCAC helped foster a more transparent, fair and secure financial services marketplace for Canadians.
  

Financial Literacy

A main priority for FCAC is improving Canadians' financial literacy—the knowledge, skills and confidence they need to make responsible financial decisions. To realize this ambitious goal, we have created a multi-faceted financial literacy strategy, supported by federal government funding.

In 2008, FCAC launched two programs targeting youth. The first is The City: A Financial Life Skills Resource. Developed in partnership with the British Columbia Securities Commission, this is an innovative curriculum for high school students and teachers. The second is Financial Basics, a financial workshop for youth aged 19 to 29. FCAC developed this together with George Brown College in Toronto, the Investor Education Fund of Ontario, and financial author and journalist Ellen Roseman. To support FCAC's youth-oriented financial literacy initiatives, we designed a new Web portal for youth called The Money Belt (themoneybelt.gc.ca), also launched in 2008.

Building on this foundation, we expanded our Financial Literacy program in 2010–11 to reach adult Canadians and young people with specific needs.

Performance

As a result of strong partnerships, focused awareness campaigns and innovative distribution channels, our Financial Literacy program made significant headway during 2010–11. For instance, schools in all provinces and territories used The City, and students and teachers alike embraced and commended it. For more details, please see the performance summary.

Major initiatives

• The City. FCAC was busy on many fronts to support and promote The City. Our Financial Literacy team continued to assist teachers who wanted to bring the resource into the classroom, offering them free training via Web-based seminars ("webinars"), face-to-face sessions or a self-directed video seminar.
  
  FCAC also launched an advertising campaign to increase awareness and use of The City within the teaching community. The campaign included two national contests—one for teachers, with the prize of an interactive electronic whiteboard; and one for students, with three laptop computers as prizes. Contestants had to correctly answer a follow-up quiz based on The City.
  
  In New Brunswick, FCAC worked with Partners For Youth, a not-for-profit community organization, on a peer-to-peer training pilot project. Students learned to use The City and then trained others their age.
  
  Finally, FCAC completed its pilot train-the-trainer program for community-based organizations. In partnership with Social and Enterprise Development Innovations, we delivered the program to 77 community-based organizations across Canada. They in turn delivered the program to their own target audiences.
  
  
• YourMoney. FCAC developed YourMoney in partnership with the Canadian Bankers Association. This financial literacy program for young people includes Web-based resources and a free, non-commercial, in-class seminar. YourMoney was created to bring financial literacy to life in homes and classrooms. Students learn about how to use money wisely to reach their goals. Teachers can register online for a seminar, which is presented by a volunteer from a local financial institution. The seminar complements The City modules because the presenter can give an inside perspective on the financial issues covered in FCAC's educational resource. Parents can access resources to help them teach financial literacy at home. In the past year, 220 seminars were held in classrooms across Canada, attended by 6,612 students.
  
  
• Financial Basics. Following the success of the original 2008 pilot project, FCAC updated the content of the Financial Basics workshop together with the Investor Education Fund of Ontario and author-journalist Ellen Roseman. The revised materials for facilitators and participants were then made available for order online in 2010–11. Financial Basics is a five-hour, hands-on workshop designed for young adults aged 19 to 29. Participants learn how to make a budget, manage expenses, understand credit and debt management, protect themselves from fraud, and save for the future.
  
  From September 2010 to March 2011, we received over 700 requests for materials and sent out more than 17,000 workbooks. Since 2008, over 1,100 individuals have participated in the workshop at George Brown College and Ryerson University in Toronto. More recently, FCAC teamed up with the Association of Canadian Community Colleges to bring the workshop to postsecondary students at 10 colleges. We expect more institutions to offer the workshop during the 2011–12 school year. The results of the partnership with the Association have been very positive:
  
  
  • 9 out of 10 colleges said they would try to host another workshop in the near future.
    
    
  • The most useful topics, according to participants, were budgeting, credit and debt management, and savings and investing.
    
    
  • 94 percent of participants said the workshop met their expectations.
    
    
  • 87 percent of participants said they would recommend the workshop to others.
    
    
• MoneyApps. FCAC and the Investor Education Fund of Ontario partnered with the Toronto District School Board to tailor Financial Basics into a 90-minute workshop for Grade 12 students. Called MoneyApps, the interactive presentation provided valuable tips, strategies, resources and tools to help graduating students develop good money habits and refresh their money management skills. The knowledge will help the students to navigate the many financial choices and decisions facing them when they enter the workforce, attend a postsecondary institution, or join a training or apprenticeship program. Students, teachers and Toronto District School Board representatives took part in the MoneyApps pilot sessions, held at Seneca College and the University of Toronto in April 2011. The response was very positive, and interest has been expressed in expanding the program and making it more widely available.
  
  
• Your Financial Toolkit. In collaboration with Quebec's Autorité des marchés financiers and the Investor Education Fund of Ontario, FCAC began working on a comprehensive financial education resource aimed at increasing the financial life skills of adult Canadians. We formed a committee of subject-matter experts to provide input for the content development process. The resource will be available in print and Web format for use in community-based organizations and the workplace; self-learners can access it online. The target launch date is spring 2012.
  
  
• Financial Literacy Newsletter. FCAC continued to publish its Financial Literacy Newsletter twice-yearly. We post the newsletter on our website and send it electronically to approximately 1,200 subscribers. The newsletter showcases financial literacy success stories and best practices in the public, private and not-for-profit sectors in Canada and internationally.
  

Benefits to Canadians

Over the past fiscal year, the activities and initiatives of our Financial Literacy program produced the following benefits:

• Teachers and facilitators within high schools, postsecondary institutions and community-based organizations across Canada were able to access free, bilingual, easy-to-use resources that they could incorporate into their curricula and use with students and members of their communities.
  
  
• Students and youth throughout the country were able to access free, easy-to-understand learning resources on money management and financial issues.
  
  
• FCAC empowers Canadians by helping them develop the knowledge, skills and confidence to make sound financial decisions.
  
  

INTERNAL SERVICES

Ensuring FCAC and its programs operate effectively and efficiently

Internal Services consists of FCAC's corporate services groups, which support the effective and efficient administration and delivery of our programs.

Internal Services ensures that FCAC adopts and applies best practices to manage its programs and human resources, and that it implements the appropriate policies, procedures and reporting structure.

Performance

During 2010–11, we made significant progress in implementing our action plan to strengthen the Agency's management and administration in three key areas. In a 2008–09 Management Accountability Framework self-assessment, these had been identified as offering opportunities for improvement. Progress in these areas during the past fiscal year included the following:

• Corporate performance framework. We updated our robust Management, Resources and Results Structure to ensure that the Agency's strategic outcomes and key performance indicators remained pertinent given FCAC's expanded mandate. We also reviewed and updated, as appropriate, several performance indicators and key outputs associated with the Agency's programs.
  
  
• Program evaluation. We continued modifying our case management system and other tools to capture and analyze critical data that will be used for program evaluation—particularly the formative evaluation of the Financial Literacy program planned for 2011–12.
  
  
• IT governance structure. We completed an assessment of the Agency's information technology infrastructure, drafted service standards for all IT services and finalized a process for managing IT incidents.

For more details, please see the performance summary.

Major initiatives

• International Financial Reporting Standards (IFRS). In 2008, we initiated a multi-year transition to the use of International Financial Reporting Standards. As part of the process, FCAC established a formal project governance structure. In 2010–11, we completed the implementation phase; this involved conducting testing and remediation, and ensuring that our financial systems and processes were able to capture and report IFRS information.
  
  
• IM/IT strategic direction and governance review. We documented and examined our current information management and information technology systems. The aim was to identify ways of improving key processes and workflows so as to better support the Agency's strategic priorities.
  
  
• Orientation program for new employees. We introduced a comprehensive employee orientation program, personalized by category of position (manager, non-supervisory employee, student or casual worker). To date, the response to the program has been very positive.
  
  
• Accommodations. To support its expanded mandate, FCAC began preparations for relocating to a larger office space. We worked with other federal departments and consultants to identify optimal design, spacing and leasing requirements, and to draft architectural drawings.

Benefits to Canadians

In 2010–11, Internal Services contributed to FCAC's progress toward all of its strategic outcomes, priorities and activities by enabling the Agency's programs to operate more effectively and efficiently.

Date Modified:

2011-10-11