Canada to limit bank service charges: NSF fee now capped at $10

 

 

Canada has imposed strict restrictions on the 'non-sufficient funds' fees that banks charge when checks or other pre-authorized payments are returned when there are not enough funds in the account. Under the new law, such penalties are capped at a maximum of $10. This is up from $50 previously.

In addition, the new law prohibits charging NSF fees more than once within two business days on the same account and charging penalties if the account deficit is less than $10. The government estimates that this change will save Canadians more than $600 million annually. Consumer organizations said that this reform is a great relief for low-income and economically disadvantaged people. The practice of banks charging large fines even when there is a small deficit often pushes ordinary people into severe financial difficulties.