VI. SUMMARY OF RECOMMENDATIONS

The LCO recommends that:

1. Legislation be enacted to regulate cheque cashing services. The LCO recommends that this legislation be modeled on and harmonized with the Payday Loans Act, 2008, and specifically that this legislation:

Require cheque cashing businesses to obtain a license to operate;
Require cheque cashing businesses to provide full and fair disclosure of their fees;
Include a mechanism for setting maximum fees for cashing cheques issued by provincial or municipal government to individuals. Ideally, this process is arm’s length, expert and open to public input; however, the process adopted under Payday Loans Act offers a viable practical solution;
Apply to all institutions, including both formal and informal cheque cashing services;
Fairly reflect the costs and risks associated with cashing government cheques, ensuring that cheque cashing services continue to receive a fair return for their services; and
Include provisions for a compliance mechanism.

2. The Government of Ontario amend the provisions of the Payday Loans Act, 2008 with respect to the Ontario Payday Lending Education Fund to specify that education initiatives may address issues related to cheque cashing, as well as broader needs related to financial capability.

3. Legislation be enacted, whether through Bill 85 or otherwise, to provide a form of photo identification that is an alternative to the driver’s license and that:

A. Is available to all Ontarians who do not have a driver’s license;

B. Will qualify as identification under the federal Access to Banking Regulations;

C. Is low cost for all low-income Ontarians, and that is free of charge for persons in receipt of social assistance benefits; and

D. Is reasonably simple to obtain in terms of administrative requirements.

4. The Government of Ontario enter into an indemnity agreement with mainstream financial service providers that will allow both bank and non-bank customers to cash government cheques immediately upon presentation of appropriate identification. The LCO recommends that this indemnity agreement:

A. Provide coverage for cheques issued by the Provincial Government, and specified service delivery agents, such as the delivery agents for the Ontario Works program;

B. Indemnify cheques for up to $2,000, in order to encompass the range of benefits received by social assistance recipients; and

C. Ensure that training on the indemnity agreement is provided to front-line staff at participating financial institutions and front-line government staff providing services to low-income individuals.

5. The Ministry of Community and Social Services and its delivery agents continue with the current voluntary direct deposit program.

6. The Ministry of Community and Social Services work with Northern communities to develop a pilot project exploring the use of benefit cards as a means of providing funds to remote communities that do not have mainstream financial institutions. The LCO recommends that this program ensure that:

A. Recipients are able to easily access their funds;

B. The fees for accessing funds from such benefit cards do not exceed the fees paid when accessing funds through a bank account;

C. The privacy of recipients is protected and respected;

D. Consideration is given to the risks of exploitation of benefit card recipients; and

E. Recipients receive appropriate training and support to enable them to effectively use the cards.

7. Mainstream financial institutions, including banks and credit unions, take additional steps to reach out to low-income and marginalized communities and to encourage access to and use of their services, including:

A. Providing no-fee accounts for social assistance recipients similar to those that some financial institutions currently provide for students and older adults;

B. Working with community groups to provide services targeted to specific needs of marginalized communities, modeled on the initiatives undertaken by RBC through its Cash & Save outlets or PACU’s partnership with CAMH; and

C. Working with community groups to raise the profile of their institutions and services in Aboriginal, newcomer, disability and low-income communities.

8. The Government of Ontario work in partnership with the Canadian Bankers Association, credit unions, and First Nations communities to explore means of improving access to financial services in remote communities.

9. The Government of Ontario collect data to monitor the success of initiatives related to cheque cashing fees.