The Financial Consumer Agency of Canada (FCAC) faces a problem in succession planning as its chief of more than five years has relinquished her title — with no one taking over.
The crisis came as former Commissioner Lucie Tedesco ended her tenure recently on June 3, reported the Financial Post. Her term was originally supposed to expire in September 2018; the search for her replacement has been ongoing since last June.
A posting for the newly vacated position on the FCAC website is dangling an annual salary of $242,700 to $285,500 as an incentive for applicants. The position of deputy commissioner, which is generally filled by the commissioner, is also currently open.
Citing an unnamed FCAC spokesperson, the Post said that an assistant commissioner is authorized to fulfil the duties of the commissioner during the period of vacancy in the office. But who the assistant commissioner is, and how they were selected, is unclear.
The void at the helm comes at an inconvenient time for the agency tasked to keep federally regulated financial institutions in line. Following its report on sales practices at Canada’s six largest banks, the FCAC is being afforded new powers to enforce consumer-protection rules.
Expanded powers appear to be necessary as the March 2018 report uncovered an aggressive retail culture that increased the threat of customers being pushed into unsuitable or unnecessary products. As damning as the report was for financial institutions, it stopped short of concluding that there was “widespread mis-selling,” which has irked some consumer advocates.
Among those is Ken Kivenko, president of Kenmar Associates. Aside from maintaining that there has been “virtually zero” progress since the report’s release, he slammed the salary offered for the commissionership, suggesting that it would make it tough to attract candidates who are up to the challenge. As a case in point, at least a handful of officials at the Ontario Securities Commission earn more than the maximum possible salary offered to the next FCAC commissioner.
Kivenko was also dissatisfied with the $500,000 maximum fine limit that the agency could levy against banks, which he said “was a joke.” Thanks to legislation passed last year, the maximum will be raised to $10 million, although that still falls far short of the $150 million Kivenko said investor advocates had recommended.
The FCAC’s 2019-2020 business plan points to other meaningful changes, which include more employees, additional office space, the ability to order banks to refund wrongful charges, and mandatory naming of banks that break the rules.
“The organization took seriously the issues of seniors, as well as other key groups, but on the whole has been quite muted in what they have been able to do,” said Laura Tamblyn Watts, chief public policy officer for CARP, acknowledged that the FCAC. “I think that there’s now a new opportunity for a new commissioner to settle in with comfort and really look at how they can play an important role in consumer protection.”
Aside from its current lack of leadership, the FCAC has to complete two urgent tasks: a review of how banks and external ombudsmen handle customer complaints, as well as creating a code of conduct for how financial institutions deal with seniors. Both projects have a deadline of June 30, and are likely to be key issues on which the watchdog’s reputation can be shaped — or reshaped.
“Until they have a fundamental change in philosophy, the situation will not change,” said Stan Buell, president of the Small Investor Protection Association.
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