Canada banks push for access to autos and insurance
By Cameron French
TORONTO (Reuters) - Canadian banks are pushing the federal government for a broad review of the financial sector in the hope of gaining the right to sell insurance in their branches and to provide leases to car buyers.
The recommendations to knock down regulatory hurdles is in the run-up to a regular five-year review of Canada's Bank Act that the government's finance department will conduct in 2012.
Finance Minister Jim Flaherty has said the coming review will deal with fine-tuning the current framework, rather than looking at sweeping changes.
But Canada's banks hope to keep the long-standing issue of insurance reform on the radar, and they think the recent turmoil in the auto industry might help persuade the government to give them access to the leasing business.
"A number of the auto lessors either pulled out of the market or significantly retrenched and pulled back (during the recent crisis)," said Terry Campbell, vice-president of policy at the Canadian Bankers Association.
"That left consumers with fewer options, it left dealers with fewer options, and it left manufacturers with fewer options."
He noted that the finance department began its own consultations last year to weigh whether to abolish the 29-year bank on banks providing car leasing.
Ian Lee, a professor at Ottawa's Carleton University and a former banker, says allowing banks into auto leasing and other areas currently serviced by unregulated lenders would be good for borrowers and for the auto industry in general. Continued...