Financial Consumer Protection Framework Regulations (SOR/2021-181)

Marginal note:Non-application — paragraph 627.89(1)(a) of Act

53 Paragraph 627.89(1)(a) of the Act does not apply in respect of a line of credit.

Marginal note:Initial disclosure

• 54 (1) For the purposes of paragraph 627.89(1)(e) of the Act, the following information is prescribed information in relation to a line of credit:

  • (a) the initial credit limit, if it is known at the time the disclosure is made;

  • (b) the annual interest rate, or the method for determining it if it is variable;

  • (c) the nature and amounts of any non-interest charges;

  • (d) the minimum payment during each payment period or the method for determining it;

  • (e) each period for which a statement of account is to be provided;

  • (f) the date on and after which interest accrues and information concerning any grace period that applies;

  • (g) particulars of the charges or penalties referred to in paragraph 627.89(1)(c) of the Act, including any default charges that may be imposed under section 627.3 of the Act;

  • (h) a description of the property, if any, over which the institution takes a security interest under the credit agreement;

  • (i) information about any optional service in relation to the credit agreement that the person accepts, the charges for each optional service and the conditions under which the person may cancel the service if that information is not disclosed in a separate statement before the optional service is provided;

  • (j) a local or toll-free telephone number, or a telephone number with a prominent indication that collect calls are accepted, that the person may use to get information about the account during the institution’s regular business hours; and

  • (k) any charge for a broker, if the broker’s fees are included in the amount borrowed and are paid directly by the institution to the broker.

• Marginal note:Subsequent disclosure of credit limit

  (2) If the initial credit limit is not known on the day on which the initial disclosure statement is provided, then, for the purposes of subsection 627.89(4) of the Act, the credit limit is prescribed information.

• Marginal note:Manner of disclosure

  (3) The prescribed information referred to in subsection (2) must be disclosed in

  • (a) the first statement of account provided to the person; or

  • (b) a separate statement that the person receives on or before the date on which they receive the first statement of account.

Marginal note:Subsequent disclosure

• 55 (1) For the purposes of subsection 627.89(4) of the Act, the following information is prescribed information in relation to a line of credit:

  • (a) the period covered by the disclosure and the opening and closing balances in the period;

  • (b) an itemized statement of account that discloses each amount credited or charged, including interest, and the dates when those amounts were posted to the account;

  • (c) the sum for payments and the sum for credit advances and non-interest and interest charges;

  • (d) the annual interest rate that applied on each day in the period and the total of interest charged under those rates in the period;

  • (e) the credit limit and the amount of credit available at the end of the period;

  • (f) the minimum payment and its due date;

  • (g) the person’s rights and obligations regarding any billing error that may appear in the statement of account; and

  • (h) a local or toll-free telephone number, or a telephone number with a prominent indication that collect calls are accepted, that the person may use to get information about the account during the institution’s regular business hours.

• Marginal note:Frequency of disclosure

  (2) Subject to subsections (3) and (4), the prescribed information must be disclosed in a disclosure statement that is provided at least once a month.

• Marginal note:No statement required

  (3) The disclosure statement need not be provided for a period in which there are no advances or payments and

  • (a) there is no outstanding balance at the end of the period; or

  • (b) the person has received notice that their credit agreement has been suspended or cancelled due to default and the institution has demanded payment of the outstanding balance.

• Marginal note:Quarterly statement

  (4) The disclosure statement may be provided once in a three-month period, either in respect of that period or the last month of it, if, during that period,

  • (a) there have been no advances or payments;

  • (b) there is an outstanding balance of less than $10; and

  • (c) no interest or fee is being charged or accrued.

Marginal note:Waiver offer

56 An institution that, under a credit agreement for a line of credit, offers to waive a payment must, in a prominent manner, disclose in the offer whether interest will continue to accrue during any period covered by the offer if it is accepted.

Marginal note:Advertisements

• 57 (1) For the purposes of section 627.91 of the Act, a representation of the annual interest rate, amount of any payment or amount of any non-interest charge in relation to a loan involving a line of credit is a prescribed representation.

• Marginal note:Information

  (2) For the purposes of section 627.91 of the Act, the annual interest rate on the date of the advertisement and any initial or periodic non-interest charges are prescribed information.

• Marginal note:Presentation of information

  (3) For the purposes of section 627.63 of the Act, the prescribed information must be presented at least as prominently as the prescribed representation and in the same manner, whether visually or aurally, or both.

Credit Cards

Marginal note:Agreement by telephone

58 For the purposes of subparagraph 627.55(2)(a)(ii) of the Act, the information referred to in subsection 65(1) of these Regulations is prescribed information in relation to an application form for a credit card.

Marginal note:Information box — application form

59 For the purposes of subsection 627.57(1) of the Act, the following information is prescribed information in relation to an application form for a credit card:

• (a) the applicable annual interest rate or, if it is a variable rate that is determined by adding or subtracting a fixed percentage interest rate to or from a public index, the name of the public index and the fixed percentage rate to be added to or subtracted from that index and the date on which that rate takes effect;

• (b) the length of the interest-free grace period in days, if any, and the circumstances in which it applies or, if no interest-free grace period applies, an indication to that effect;

• (c) the amount of the minimum payment required in each payment period and a brief description of the method for determining the amount of the minimum payment;

• (d) the foreign currency conversion rate, a brief description of how it is determined and the date on which it is applied;

• (e) the amount of any non-interest charges that are levied on an annual basis and the date on which they are levied or, if no annual charges are levied, an indication to that effect; and

• (f) a list of the types and amounts of any other non-interest charges that indicates the dates on which they are applied.

Marginal note:Information box — agreement

60 For the purposes of subsection 627.57(1) of the Act, the following information is prescribed information in relation to a credit card:

• (a) the initial credit limit, if it is known on the date of the disclosure statement;

• (b) the applicable annual interest rate or, if it is a variable rate that is determined by adding or subtracting a fixed percentage interest rate to or from a public index, the name of the public index and the fixed percentage rate to be added to or subtracted from that index and the date on which that rate takes effect;

• (c) the length of the interest-free grace period in days, if any, and the circumstances in which it applies or, if no interest-free grace period applies, an indication to that effect;

• (d) a brief description of the manner in which interest is calculated and the date on which that calculation is made;

• (e) the amount of the minimum payment required in each payment period and a brief description of the method for determining the amount of the minimum payment;

• (f) the foreign currency conversion rate, a brief description of how it is determined and the date on which it is applied;

• (g) the amount of any non-interest charges that are levied on an annual basis and the date on which they are levied or, if no annual charges are levied, an indication to that effect; and

• (h) a list of the types and amounts of any other non-interest charges that indicates the dates on which they are applied.

Marginal note:Solicitation of applications

61 If an institution that issues credit cards solicits applications for them in person, by mail, by telephone or by any electronic means, the institution must disclose the information referred to in subsection 65(1) at the time of solicitation.

Marginal note:Initial disclosure statement

62 If the initial disclosure statement for a credit card is part of the application for its issuance, then the initial disclosure statement must be set out in a consolidated manner in a single location and the information box required under subsection 627.57(1) of the Act must be set out at the beginning of the application.

Marginal note:Non-application — paragraph 627.89(1)(a) of Act

63 Paragraph 627.89(1)(a) of the Act does not apply in respect of a credit card.

Marginal note:Initial disclosure

• 64 (1) For the purposes of paragraph 627.89(1)(e) of the Act, the following information is prescribed information in relation to a credit card:

  • (a) the information referred to in paragraphs 54(1)(a) and (c) to (k) of these Regulations;

  • (b) the manner in which interest is calculated and the information referred to in paragraphs 65(1)(a) and (b) of these Regulations;

  • (c) if the person is required by the credit agreement to pay the outstanding balance in full on receiving a statement of account,

    • (i) a mention of that requirement,

    • (ii) the grace period by the end of which the person must have paid that balance, and

    • (iii) the annual interest rate charged on any outstanding balance not paid when due;

  • (d) a statement that, if the credit card, credit card account information or personal authentication information created or adopted in relation to the credit card or credit card account is used in an unauthorized manner, the maximum liability to the person is $50 unless the person has demonstrated gross negligence or, in Quebec, gross fault in safeguarding the credit card, credit card account information or personal authentication information; and

  • (e) a statement that, if the person reports to the institution that the credit card, account information of the credit card or the personal authentication information created or adopted in relation to the credit card or credit card account has been lost or stolen or is otherwise at risk of being used in an unauthorized manner, the person will not be liable for any unauthorized use following the receipt of that report.

• Marginal note:Subsequent disclosure of credit limit

  (2) If the initial credit limit is not known on the day on which the initial disclosure statement is provided, then, for the purposes of subsection 627.89(4) of the Act, the credit limit is prescribed information.

• Marginal note:Manner of disclosure

  (3) The prescribed information referred to in subsection (2) must be disclosed in

  • (a) the first statement of account provided to the person; or

  • (b) a separate statement that the person receives on or before the date on which the person receives the first statement of account.

Marginal note:Application forms

• 65 (1) For the purposes of subparagraph 627.89(3)(a)(iv) of the Act, the following information is prescribed information in relation to an application form for a credit card:

  • (a) the annual interest rate if it is a credit card with a fixed interest rate;

  • (b) the public index and the fixed percentage rate to be added to or subtracted from it, if the credit card is a credit card with a variable interest rate that is determined by adding or subtracting a fixed percentage interest rate to or from a public index; and

  • (c) the amount of any non-interest charges.

• Marginal note:Exception

  (2) This section does not apply if the information box required under subsection 627.57(1) of the Act is included in the application form or in the related document prepared by the institution for the issuance of the credit card.

Marginal note:Subsequent disclosure

• 66 (1) For the purposes of subsection 627.89(4) of the Act, the following information is prescribed information in relation to a credit card:

  • (a) the information referred to in paragraphs 55(1)(a) and (d) to (h) of these Regulations;

  • (b) an itemized statement of account that describes each transaction and discloses each amount credited or charged, including interest, and the dates when those amounts were posted to the account or that permits the person to verify each transaction described by linking it with a transaction record provided to the person;

  • (c) the amount that the person must pay, on or before a specified due date, in order to have the benefit of a grace period;

  • (d) the sum for payments and the sum for purchases, credit advances and interest and non-interest charges;

  • (e) subject to subsection (3), an estimate of the length of time in months and years that would be required to pay in full the outstanding balance set out in the disclosure, based on the assumption that

    • (i) the minimum payment set out in that statement and in each subsequent disclosure will be made on its corresponding due date,

    • (ii) the annual interest rate that applies on the date of the disclosure in respect of purchases of goods or services or that, based on the information available on that date, is expected to apply in respect of such purchases after a period during which a promotional or special introductory interest rate applies, will be applied to the outstanding balance until it is paid,

    • (iii) the outstanding balance is rounded up to the nearest hundred dollars for the purpose of arriving at that estimate, and

    • (iv) a year is considered to consist of not less than 360 days and not more than 366 days; and

  • (f) if the annual interest rate that applies on the date of the disclosure, other than a variable interest rate disclosed to the person under subparagraph 627.89(3)(a)(iv) of the Act or an interest rate disclosed to the person under paragraph 627.89(5)(b) of the Act, could increase in the next period, the circumstances that would give rise to that increase and any new interest rate that would apply in the next period as a result of the increase.

• Marginal note:Frequency of disclosure

  (2) Subject to subsections (4) and (5), the prescribed information must be disclosed as a statement that is provided at least once a month.

• Marginal note:No estimate required

  (3) The estimate referred to in paragraph (1)(e) is not required to be provided if the person is required to pay the outstanding balance in full on receiving a statement of account.

• Marginal note:No statement required

  (4) For the purposes of subsection 627.34(1) of the Act, the statement need not be provided for a period during which there have been no advances or payments and

  • (a) there is no outstanding balance at the end of the period; or

  • (b) the person has received notice that their credit agreement has been suspended or cancelled due to default and the institution has demanded payment of the outstanding balance.

• Marginal note:Quarterly statement

  (5) For the purposes of subsection 627.34(1) of the Act, the statement may be provided once in a three-month period, either in respect of that period or in respect of the last month of it, if, during that period,

  • (a) there have been no advances or payments;

  • (b) there is an outstanding balance of less than $10; and

  • (c) no interest or fee is being charged or accrued.