The importance of our civil service and government institutions has been under relentless attack from libertarian politicians and neo-liberal think tanks for so long that it’s been baked into the psychic of most middle- and lower-class voters. Which shouldn’t come as a surprise given individuals 60 years old and younger weren’t adults or even born when the role of our government was to look after and protect its citizens.
The vast majority of citizens only know government’s role as a facilitator of market efficiency and economic growth.
Yet, who really thinks major airlines, banks, insurance companies, oil companies, investment companies, big pharma and telecoms, to name a few, really care about their employees and customers? Have we really come to believe that these ‘giants’ don’t need regulations or oversight and that they work on our behalf? Have you never felt ‘taken’ by one of these aforementioned industry groups?
One of the government’s most important roles should be to protect its citizens from fraud and unfair business practices. Something that all Canadian governments, regardless of their political strip, have continually abdicated in favour of commerce and profits. But every once in a while, a government steps up to stop predatory practices.
Such was the case when the federal government introduced new regulations to protect banking customers. As of June 30, banks are now legally required to protect the interests of their customers by selling products and services that are appropriate for each individual customer’s financial situation.
In other words, the size of commission or ‘orders from on top’ can no longer be the reason to push certain products on customers. It is a first step to stop the predatory nature of banks that flourished after employee compensation became more heavily weighted to commissions rather than salaries.
Another aspect of the new law is that banks must be pro-active in telling the customer the best deals on fees and give automatic notices when fees kick in because of, say, an overdraft.
The complaint’s mechanism has been improved as well with much shorter timelines for resolution.
It is a piece of legislation that finally has caught up to the 21st century. It takes a bite out of the ‘buyer-beware’ principle or Caveat Emptor that became a precedent in law during a 1603 case in England. Putting the onus on buyers may have made sense during a time when individuals and small vendors were buying and selling physical items face-to-face.
Today, it’s an outdated principle as consumers purchase tangible and intangible items—much of which is beyond our technical understanding—from invisible owners of multi-national, billion-dollar corporations, shielded by the internet, a battery of high-priced lawyers and multi-page legal disclaimers.
These new banking regulations rightfully put the onus on both the buyer and the seller.
Governments and their institutions once protected their citizens from the excesses of corporate ‘shareholder capitalism’. Yet all democratic governments changed their focus after the reign of Margaret Thatcher in the U.K., Jean Chretien in Canada and Ronald Reagan in the U.S. That’s precisely the political era when governments changed their focus from serving the needs of citizens to serving the needs of the market and economy.
We are now suffering the long-term consequences—extreme income inequity, unaffordable housing, worker shortages in critical, lowly-regarded-service industries and societal discontent.
The revised banking regulations is a small step towards re-balancing power within the markets. It’s a small step towards the concept of ‘stakeholder capitalism’ which levels the playing field ensuring more positive outcomes for all stakeholders, not just shareholders.
Our governmental institutions are absolutely critical to maintaining peace and order by protecting the little guy—you and me—and small and medium-sized businesses.
Those politicians who continually ‘mouth off’ about the evils of the civil service and government institutions aren’t working for you, they are simply the mouth piece for big Corp, foreign shareholders and the millionaire/billionaire club.