ACORN’s Statement on a recent announcement by the federal government to lower the NSF Fees is encouraging – ACORN wants it lowered to $10
Posted October 25, 2023
ACORN Canada, a national community union of low- and moderate-income people, is happy to note that the federal government is joining other countries in realising that the Non-Sufficient Fund (NSF) Fee charged by banks is predatory and is taking action to lower it.
In a recent press release by the Department of Finance, the government admits that the NSF fee is an unfair penalty on lower-income people and needs to be reined in.
Donna Bordon, ACORN Canada leader says, “Canada has been falling behind other countries in holding large banks accountable – we are glad to see this step and need NSF fees to be lowered to $10 or eliminated!”
ACORN Canada has been fighting tooth and nail for a lowered NSF fees. One of the key demands of the ACORN’s National Fair Banking Campaign to the federal government has been to lower the NSF fee to $10.
Most big banks in Canada charge a NSF fee anywhere from $45 to $50. This fee hurts low- and moderate-income people the most. In fact, ACORN’s periodic surveys on fair banking have clearly shown that NSF fee often pushes people to take out payday loans that have annual interest rates of 400-500%.
Banks are making millions of dollars every year by collecting fees from low-income people. Fees account for 4-6% of the total revenue for all big banks in Canada**.
In the US, nearly three-fourths of the biggest banks including 27 of the top 30 earners, have eliminated NSF fees and many other banks are following suit. Consumer Financial Protection Bureau data estimates that consumers are saving almost $2 billion annually as a result.
ACORN members want the federal government to immediately lower the NSF fee from $45-50 to $10.
Other ACORN’s fair banking campaign demands:
- ACORN would also like the federal government to urgently lower the interest rate of intsallment loans from 60% to 30% or 20% plus Bank of Canada rate whichever is lower.
- Bring back the payday loans under the ambit of Criminal Code of Canada so it gets regulated federally not provincially.
- Make enforcing violations accessible to borrowers.
- Create a federally funded Fair Credit Benefit so that all low-income people have access to low-cost credit options in case of emergency.
- Support fair lending alternatives like postal banking in all cities.
This figure has been calculated based on the figures given by the banks in their annual reports for 2022. Money earned by banks through fees doesn’t give breakup separately for the NSF fee.