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N.B. Senator renews call for interest rate probe; Pierrette Ringuette says tighter controls on debit and credit user fees, interest rates needed

IDNUMBER 200901230070
PUBLICATION: Times & Transcript (Moncton)
DATE: 2009.01.23
SECTION: News;News
COPYRIGHT: © 2009 Times & Transcript (Moncton)

N.B. Senator renews call for interest rate probe; Pierrette Ringuette says tighter controls on debit and credit user fees, interest rates needed

New Brunswick Senator Pierrette Ringuette says the fight against high interest rates and user fees on credit cards and debit cards is gaining strength across the country and she will renew her call for an investigation in the Senate next week.

"I'm not giving up on this," Ringuette said yesterday. "The Office of Consumer Protection is getting so many complaints about high interest rates that they don't know what to do. There is a resounding push from across the country for this."

On December 2, Ringuette tabled a motion in the Senate asking that the Standing Senate Committee on Banking, Trade and Commerce be authorized to examine and report on the credit and debit card systems in Canada and their relative rates and fees, in particular for businesses and consumers.

Ringuette is a former Liberal MLA and MP for the Madawaska. She served as an MLA with former Premier Frank McKenna and was appointed to the Senate by former Liberal Prime Minister Jean Chrétien. Now she is becoming increasingly critical of the Conservative government under Stephen Harper.

She said interest rates on credit cards and fees charged to businesses for debit card transactions are growing higher all the time and something must be done, especially during this time of economic uncertainty.

Her initial motion to the Senate last month proposed an investigation that would expose the impact of rates and fees on businesses and consumers. However, the motion was lost in the red tape shuffle of Ottawa when the House of Commons was prorogued. Parliament will be back in session on Monday with the Speech from the Throne at 1:30 p.m. Finance Minister Jim Flaherty will deliver his budget on Tuesday.

Ringuette says she will file a notice of motion on Tuesday and expects to deliver a speech to the Senate on Wednesday reiterating her call for the probe into debit and credit card fees.

She said her hope is that the investigation will lead to better federal legislation to control interest rates on credit cards.

She said it doesn't make sense that the government would agree to a $75 billion bailout of the banking system when the banks are still making huge profits and able to continue buying other financial institutions in other countries.

"They got the Canadian money, but they are not helping Canadians get through this financial crisis."

She said $75 billion distributed among the Canadian people on a per capita basis would be a nice bonus for everyone. She also noted that a short term loan to the auto industry was doled out on the condition that auto industry employees take pay cuts, but no such condition seemed to apply for the bankers.

"Small and medium-sized businesses are caught in the middle of the cycle by the banks and credit card companies."

She said the banks need to cut their interest rates to help boost consumer confidence and credit card companies should follow suit. She is also afraid that debit card rates could rise if Interac is allowed to change its status from a non-profit co-operative to a for-profit company.

According to Ringuette's original motion filed last month, Canadians hold 64. 1 million credit cards (roughly two for every person in the country), and are paying up to 24.75 per cent interest on them.