5. Section 3 does not apply in respect of a deposit that is made by an eligible enterprise if the institution has reasonable grounds to believe that there is a material increased credit risk, having regard to factors such as
(a) an escalating overdraft balance that is not being reduced by deposits received;
(b) a negative change in the credit score or other behaviour scores that may impact the credit risk of the enterprise;
(c) an unexplained change in the history of cheques or other instruments deposited to the account;
(d) high numbers of cheques or other instruments deposited that are returned as dishonoured items from other institutions that may impact the available balance in the account; or
(e) notice of bankruptcy or of creditor action against the enterprise.
6. (1) Sections 3 and 4 do not apply in respect of
(a) a deposit that the institution has reasonable grounds to believe is being made for illegal or fraudulent purposes in relation to the depositor’s account;
(b) an account that has been open for less than 90 days;
(c) a cheque or other instrument that has been endorsed more than once; or
(d) a cheque or other instrument that is deposited at least six months after the date of the cheque.
(2) An institution that relies on this section as grounds for refusing to comply with section 3 or 4 must provide the depositor in writing with notice of its refusal and a statement indicating that the depositor may contact the Financial Consumer Agency of Canada if they have a complaint, including contact information for the Agency,
(a) immediately, if the cheque or other instrument was deposited in person with an employee at one of the institution’s branches or points of service; or
(b) upon request, if it was deposited in any other manner.
DISCLOSURE OF POLICY
7. An institution must disclose in writing to any person who opens a retail deposit account to which they may deposit cheques or other instruments
(a) the maximum periods during which the institution may hold funds deposited by cheque or other instruments before making them available for withdrawal, as set out in section 3; and
(b) the institution’s policies concerning the maximum period during which the institution may hold funds deposited by cheque or other instrument in any situation to which section 3 does not apply.
8. An institution must disclose the information referred to in section 7 to its customers and to the public by means of a written notice, copies of which must be displayed and made available at each of the institution’s branches where personal deposit accounts are offered, at each of the institution’s points of service and on each of the institution’s websites through which it offers products and services in Canada.
NOTICE OF CHANGE IN POLICY
9. (1) An institution must disclose any change to the information referred to in section 7
(a) by means of a notice that is displayed, for a period of at least 60 days immediately before the effective date of the change, at each of the institution’s branches where products or services are offered, at each of the institution’s points of service and on each of the institution’s websites through which it offers products and services in Canada; and
(b) by providing every customer in whose name a retail deposit account is kept and to whom a statement of account is provided with a notice in writing at least 30 days before the effective date of the change or, if the customer has instructed the institution in writing to provide such a notice to another person, by providing that other person with the notice in writing at least 30 days before the effective date of the change.
(2) If the change results in a shortened period during which an institution may hold funds deposited by cheque or other instrument, the institution may meet the obligations set out in paragraph (1)(a) and (b) after the effective date of the change.
(3) A notice that is sent to a customer by mail is considered to be provided to the customer on the fifth business day after the postmark date.
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