Given the complexity of the issues surrounding cheque cashing fees and the diversity in the needs and circumstances of the low-income Ontarians who use cheque cashing services, there is no single solution.

The LCO has recommended a package of reforms that combine pragmatic short-term initiatives to address immediate needs, with recommendations for addressing the underlying causes of the problem over the longer-term. In order for law reform on this issue to be effective, it must be supported by complementary public and private sector initiatives to broaden options, provide information and increase access to financial services for recipients of social benefits.

The LCO has therefore recommended:

1. Regulation of the cheque cashing industry: enactment of legislation that is modeled on and harmonized with Ontario’s recently passed payday loans legislation, and that includes:
• licensing and disclosure requirements,
• a process for setting maximum fee rates, and
• a compliance mechanism;

2. Access to low-cost identification: passage of legislation to provide Ontarians with low-cost official photo-identification that is an alternative to the driver’s license and that can be used to access financial services;

3. Consumer education: initiatives to increase education and access to information for low-income consumers regarding cheque cashing and financial services;

4. Indemnity agreements: negotiation of an indemnity agreement between the Government of Ontario and mainstream financial institutions to ensure that recipients of government benefits can cash their cheques at banks and credit unions, at no cost and without delay;

5. Addressing the unique circumstances of remote communities: development of a pilot project to explore the use of benefit cards as a means of providing government benefits to remote communities that do not have access to mainstream financial institutions;

6. Encouraging use of banks and credit unions by low-income Canadians: cooperative efforts by government, mainstream financial institutions and community organizations to increase usage of mainstream financial services by marginalized communities; and

7. Monitoring: collection of data by the Government of Ontario to monitor the success of these initiatives.