In British Columbia many of the Credit Unions, Insurance Companies and Trust Companies operate under the Financial Institutions Act (“FIA”). In addition to providing a regulatory framework these financial institutions in B.C., FIA seeks to provide consumer protection. Every 10 years the British Columbia Ministry of Finance undertakes a review of the Act. A couple of months ago the Ministry released its Initial Public Consultation Paper and there are a couple of themes that Estate & Trust practitioners may find interesting.
One of the issues under discussion is financial literacy. As they note in the public consultation paper, Governments in Canada and around the world are focusing on financial literacy; and B.C. in particular already has an initiative focused on protecting seniors: “Together to Reduce Elder Abuse – BCs strategy”. Many financial institutions are training staff to detect and report financially abusive situations. Here are some of the questions raised by the Ministry;
What role should the provincial government have with respect to promoting financial literacy?
Should legislative changes be introduced to bolster financial literacy and/or protect consumers from financial abuse?
The federal government has tabled legislation to permit federally regulated entities to report concerns about financial abuse to next of kin in specific circumstances. Should similar changes be considered with respect to BC financial institutions?
The other area that may be of interest to readers is that the Ministry recognizes the proliferation of trust services through the internet and other means that are aimed at seniors. Generally Trust companies and lawyers are regulated and have accountabilities in common law. However, these newer services offered by unregulated service providers have caused the Ministry to pose certain questions in connection with consumer protection issues.
Should financial institutions legislation be expanded to regulate (subject to exemptions) trust business carried on by individuals or associations?
If legislation were expanded to regulate trust business what exemptions should be provided (lawyers, Real estate agents, bankruptcy trustees)?
Should a distinction be made between trust activities for personal and business related purposes.
It will be interesting to see what comes of this Consultation Paper.