BILL C-426: An Act to amend the Bank Act and other Acts (cost of borrowing for credit cards)

TEXT OF THE BILL

Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

BANK ACT

1. Section 452 of the Bank Act is amended by adding the following after subsection (2):

(2.1) No bank shall charge the holder of a credit card issued by the bank a rate per annum in respect of the cost of borrowing that exceeds by more than five per cent the current Bank of Canada target for the overnight rate.

2. Section 570 of the Act is amended by adding the following after subsection (2):

(2.1) No authorized foreign bank shall charge the holder of a credit card issued by the bank a rate per annum in respect of the cost of borrowing that exceeds by more than five per cent the current Bank of Canada target for the overnight rate.

COOPERATIVE CREDIT ASSOCIATIONS ACT

3. Section 385.18 of the Cooperative Credit Associations Act is amended by adding the following after subsection (3):

(3.1) No retail association shall charge the holder of a credit card issued by the retail association a rate per annum in respect of the cost of borrowing that exceeds by more than five per cent the current Bank of Canada target for the overnight rate.

INSURANCE COMPANIES ACT

4. Section 482 of the Insurance Companies Act is amended by adding the following after subsection (2):

(2.1) No company shall charge the holder of a credit card issued by the company a rate per annum in respect of the cost of borrowing that exceeds by more than five per cent the current Bank of Canada target for the overnight rate.

TRUST AND LOAN COMPANIES ACT

5. Section 438 of the Trust and Loan Companies Act is amended by adding the following after subsection (2):

(2.1) No company shall charge the holder of a credit card issued by the company a rate per annum in respect of the cost of borrowing that exceeds by more than five per cent the current Bank of Canada target for the overnight rate.

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