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For Consumers |
Consumer Protection: Know Your Rights |
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Branch closures
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When closing a branch
Notice requirements
When a notice is not required or the notice period may vary
Community consultation
Have a question or complaint?
When closing a branch
When a financial institution closes a branch, there are varying impacts
on consumers. These can range from the mild inconvenience of having
to switch to a nearby branch of the same or another institution, to
the complete loss of service when the last branch closes in a small
town.
Financial institutions are required to provide advance notice
— at least four months and in some cases six months —
when planning a branch closure. This is to give consumers and communities
time to react and find other service options.
This rule applies to financial institutions with branches where:
- retail deposit accounts are opened
- cash is distributed to customers through an employee
If an institution were to stop providing either of these activities
without closing the branch, it would still have to follow the advance
notice requirements.
Notice requirements
Notice requirements vary depending on where the affected branch is
located.
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Urban or rural area where there is a retail deposit-taking branch of a financial institution within 10 km of the affected branch
No notice is required if the receiving branch is less than 500 metres of the closing branch.
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4 months |
Notice is given to FCAC Commissioner, branch customers and the public. The following information must be posted in a conspicuous place in a public area of the branch and must be sent to each customer of the branch:
- location of the branch;
- proposed date for the closure or cessation of activity;
- address of the branch where customer accounts will be transferred;
- other locations of the institution where customers may obtain service after that date, or a telephone number that customers may call to find out such information;
- how someone may contact the institution regarding the proposed closure or cessation of activity.
The notice must contain the same information
as above, as well as information on how
an individual may contact the FCAC Commissioner
regarding the proposed closure or cessation
of activity.
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Rural area where there is no other retail deposit-taking branch of a financial institution within 10 km of the affected branch
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6 months |
Same as above.
In addition, the institution must:
- provide notice to municipal authorities;
- publish a notice in a locally distributed newspaper.
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When a notice is not required or the notice period may vary
A notice is not required when a branch is sold to
another retail deposit-taking financial institution
but will continue to operate as a branch.
These requirements do not apply in the following
situations:
- events beyond the financial institution's
control (i.e., acts of God);
- temporary disruptions in service that do not
continue for more than 15 business days (e.g.,
renovations);
- relocation of a branch or its consolidation
with one or more other branches where the site
of the relocated or consolidated branch is less
than 500 metres from the site of the closed
branch;
- a closure or cessation required as a result
of supervisory intervention by the Superintendent
of Financial Institutions or the Canada Deposit
Insurance Corporation;
- a proposed closure or cessation in response
to a risk to the safety of personnel or the
public (e.g., repeated robberies at a branch);
- the abrupt termination by the landlord of
a lease arrangement for the branch, where the
landlord has not given the institution enough
notice of the termination to allow it to comply
with the notice requirements;
- relocation of a branch or its consolidation
with one or more other branches involving a
movement of more than 500 metres, but not far
enough from the former location, in the opinion
of the Commissioner, to substantially affect
either the customers served by the branch or
the nature of the business of the branch;
- an instance where the institution would face
undue hardship in complying with the notice
requirements.
Community consultation
It is expected that financial institutions will
consult with communities affected by a branch closing.
However, the Financial Consumer Agency of Canada
can order a meeting between its representatives,
the financial institution and the community to exchange
views about a branch closing.
A meeting can be held if an individual or community
representative requests such a meeting by sending
a letter to the FCAC Commissioner and if the financial
institution has failed to adequately consult the
community about the closure or cessation of activities.
If the Commissioner finds the request valid, the
financial institution may be required to hold
a meeting.
Have a question or complaint?
Call 1-866-461-3222 or contact us via our Web
site. If you believe that a financial institution
has breached a consumer law, click here for information on making a complaint.
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