Flaherty shifting his focus to credit card companies?

Flaherty shifting his focus to credit card companies?

Flaherty shifting his focus to credit card companies?
Mortgage brokers’ prayers may finally have been answered – Finance Minister Jim Flaherty is raising the possibility that he will attack the credit card problem from a regulatory front.
 
This move by Flaherty comes on the heels of a major case brought against Visa Canada and MasterCard that was dismissed by the Competition Tribunal – a decision that came with the suggestion a “proper solution” will have to come from the government.
 
“I will be carefully reviewing the Competition Tribunal’s decision and also monitoring any potential appeal,” Flaherty told reporters after the anti-trust body rejected the Competition Bureau’s arguments against the credit card giants. The bureau had alleged that they were imposing undue fees on retailers.
 
Brokers are all-too familiar with Ottawa’s intervention in the mortgage sector over the past few years through ever-tightening regulations. Requests to ease or reverse previous decisions from associations like CAAMP have slowed that pace. Nor has the government directly answered criticism levelled at the major banks about a “laissez-faire attitude” towards consumer credit cards. 
 
“Recognizing the importance of this issue to all involved,” says Flaherty, “I have also asked that a special meeting be convened of the government’s FinPay committee – a consultative committee on payments issues that includes representatives from the credit card industry, small business, retailers, consumers, and many more – to discuss this matter and next steps.”
 
Brokers have repeatedly cried foul that the mortgage and housing sector were being unfairly targeted by the finance minister – while personal debt continued to spiral upwards with seemingly no regulation on how many cards a consumer could have, or how high the credit limit.
 
Any intervention being considered by Flaherty is likely to stop short of addressing those concerns.
 
Although not speaking directly on the ruling, the minister issued a statement that “as job creators and drivers of economic growth, Canada’s small business owners and entrepreneurs – along with consumers – deserve clear information and fair and transparent rules on the type of payment system they use.”
 
9 Comments
  • Paolo Di Petta | dipettamortgage.com 2013-07-24 9:16:43 AM
    Good to see Flaherty tackling the next big issue.

    He was prudent to deal with mortgages first - had he initially gone after credit cards, there's a very good chance that all we would have seen was a bunch of people transfering unsecured debt to secured debt via refinances.

    Now with the new mortgage rules in place, he has some leverage - the Credit Card companies can't offload debt onto people's homes and now they'll have to play ball.
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  • Ken Lankin 2013-07-24 9:28:20 AM
    Well no poop !! Is about time. Between the CC co's and the banks dishing out unsecured LOC's like candy - fees that a Manhattan lawyer couldn't figure out - the buck MUST stop here. Many of us have barked up this tree yet Flaherty continued to slam mortgages when his focus should have been right here 2 years ago. Lets hope Paolo is right and we can grab some more biz from what we have already lost !
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  • Kent Farnsworth, Meridian Simply Mortgages 2013-07-24 9:33:47 AM
    It's about time. Maybe that was his plan all along. personally I don't think he's that intelligent though. That being said, there has been plenty of other changes that has been made to mortgage regulations that didn't apply to refinancing. These changes has had significant impact on my business and I'm sure most other brokers as well. It is nice to finally see the feds go after one of the real problems with household debt though. Hopefully next they'll start to regulate the auto finance business.
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