NDP Leader Jack Layton said Tuesday he would cap credit card rates and fees as a way to control the household debt of Canadian families.
Layton announced the party’s first platform plank at a news conference in Brantford, Ont.
The NDP proposal would cap credit card rates at five per cent, plus the prime interest rate, and extend powers to federal regulators to control “excessive fees on credit cards.”
Layton also said he would make a voluntary code of conduct on transaction fees implemented by the Conservative government a law.
“It will allow banks to recoup a profit while keeping family debt loads manageable,” Layton said in his speech.
“And unlike Stephen Harper’s latest idea, my plan will help Canadians families now — not in 2015.”
Layton’s reference to the immediate measure was another shot at Harper’s proposed family tax credit that was announced on Monday.
The proposal would allow families with children under 18 to split as much as $50,000 of their income. The policy would not come into effect until after the federal budget is balanced, which isn’t expected until 2014-15.
Layton said the move is to combat the fact the average family household debt has jumped to more than $100,000 during the recession.
He said many Canadian families are turning to their credit cards to pay for basic needs.
Financial institutions doing ‘just fine’
The NDP leader contrasted the problems he said many Canadian families are having in paying their bills with the latest bank profits.
He said Canadian chartered banks made more than $21 billion in profits last year. When asked whether his plan would eat into those bank profits, Layton said Canada’s financial institutions will have to find a way to continue to make money without “gouging people.”
“The financial institutions will do just fine. I think some control over the rates that they are charging is absolutely essential,” Layton told reporters at his news conference.
“We have very large banks in Canada. There is not a lot of competition one to the other. The result is you need to have a government standing on the side of the people.”
NOTE: Good for Jack and good for Canadians if this type of regulation can be put in place. Financial institutions profits over recent years have been obscene and have come about mainly from excessive user fees and through gouging the most vunerable and disadvantaged in our society. These practices need to stop and I am glad to see at least one party speaking up for those who can’t.
Here’s another example of criminal monolithic corporatocracy at work…
Banks, Visa and MasterCard fixing prices, class action suit claims
VANCOUVER— Two law firms say they have filed a class action lawsuit against Visa, MasterCard, and some of the country’s biggest banks, alleging they worked together to fix prices charged to merchants.
The suit, filed by Branch MacMaster LLP and Camp Fiorante Matthews, claims that the credit card companies and banks force retailers to accept all of their credit cards — even if the cards charge them higher processing fees.
Under the current model, credit card companies and banks take a percentage fee from the merchant that varies depending on the type of card the customer uses.
More basic credit cards have lower fees, while cards that collect points and other rewards often charge retailers higher fees.
The suit claims that merchants are prohibited from charging consumers more for transactions paid for on premium credit cards, and are forced to eat the costs themselves.
None of the allegations has been proven in court.
Named in the suit are numerous Canadian banks, including Bank of Montreal (TSX: BMO), Scotiabank (TSX: BNS), CIBC (TSX: CM), Royal Bank (TSX: RY), TD Bank (TSX: TD) and National Bank (TSX: NA).
Criminal: A person with predatory instincts who has not sufficient capital to form a corporation.