OTTAWA - Canada's banks have been warned to work together to respond to customer complaints about credit card practices or face regulations they "are probably not going to like."
Conservative MP Ted Menzies, the parliamentary secretary to Finance Minister Jim Flaherty, told representatives of Canada's banks today that constituents have been complaining to politicians enough that something has to be done.
The industry has until June 13 to respond to Flaherty's new regulations on the card industry, which include a mandatory 21-day grace period before interest is charged on new purchases, even for cardholders with outstanding balances.
As well, the new rules would require the banks to give advance notice of interest rates increases and be more transparent.
However, the government has made no moves to put a ceiling on the interest banks can charge on outstanding balances, or on so-called interchange rates that impose fees on merchants for card purchases.
Canadian Bankers Association president Nancy Hughes Anthony said the regulations are not needed and are painful for banks already challenged by the deep recession.
Hughes Anthony said the mandatory grace period will cost the banks considerably more than the "tens of millions" estimated by the finance minister, although she did not give a figure.
"For my part, rather than introduce regulations, the best approach is for choice, and for competition and good understand for all participants of the benefits and responsibilities," she said.