Ted Menzies: Personal Cheques Can't Be Held By Banks For Over 4 Days, Conservatives Say


First Posted: 03/ 4/2012 3:32 pm Updated: 03/ 4/2012 5:50 pm

OTTAWA - The Conservatives are making good on a two-year-old budget promise by ensuring banks can't hold personal cheques for more than four business days before freeing up the funds.

Ted Menzies, the junior finance minister, has announced several consumer-friendly changes that were promised by the federal government as far back as the 2010 budget.

In addition to ensuring that cheques under $1,500 can't be held more than four days.

The changes ensure that cheques worth less than $100 must be cashed immediately in person or reimbursed the following day if deposited in a bank machine.

Banks also will no longer be able to send out unsolicited credit card cash advances under the new rules, which come into force this August.

The government also announced a new code of conduct for mortgage lenders first promised in 2010.

The voluntary measures include having financial institutions inform their customers how they can pay down their mortgages faster without wracking up penalties.

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    Canada's household debt burden climbed to yet another record high in the third-quarter, prompting Bank of Canada Governor Mark Carney to call it <a href="http://www.montrealgazette.com/business/Mark+Carney+again+sounds+alarm+rising+Canadian+household+debt/5856418/story.html" target="_hplink">"the greatest risk to the domestic economy</a>." At 150.8, <a href="http://www.reuters.com/article/2011/12/14/us-economy-debt-idUSTRE7BC2DY20111214" target="_hplink">Canada's debt-to-income ratio is now higher than in the U.S. or the U.K</a>. Meanwhile, household net worth fell, which, as many observers have warned, has made Canadians more vulnerable to adverse economic shocks.


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    When TD cut its 2012 outlook for the Canadian economy earlier this week to 1.7 per cent, the bank cited a deepening fiscal crisis in the eurozone as one of the primary factors. More bearish than BMO, which on Thursday held its expectation for Canada's GDP growth next year at two per cent, TD is forecasting "a deterioration of financial conditions and a significant European recession in the first half of next year." "<a href="http://www.td.com/document/PDF/economics/qef/qefdec11_can.pdf" target="_hplink">A deepening recession in the region will exert a significant drag on the global economy</a>," the bank maintained. "Canada will be negatively impacted through weaker commodity prices, confidence and export growth. Labour markets will also soften as a result." (ERIC FEFERBERG/AFP/Getty Images)


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