Feds call on banks to lower consumer interest rates

Lethbridge Herald (Final)

News | A4

The federal government is asking banks and credit-card companies to lower interest rates for Canadians, many of whom are struggling financially because of the COVID-19 pandemic.

The government is also looking at extending lower-interest credit directly to consumers, Prime Minister Justin Trudeau said, in his daily update to Canadians on Thursday.

"I can assure you that the finance minister has had conversations directly with the banks about credit card interest rates," he said.

"We recognize that they are a significant challenge for many Canadians at this point. That is why we are encouraging them to take action to alleviate the burden for Canadians. At the same time we are looking at our end at making credit more available and less expensive for Canadians to be able to make it through the next few months."

The major banks did not immediately respond to requests for comment.

Earlier this week, however, the Bank of Montreal said it is deferring payments on small business credit cards and credit lines and on the principal of small business loans.

The Bank of Canada has lowered its trendsetting interest rate to try to cushion the blow to business from a slowing economy but credit-card interest rates, the ones that matter most directly to most consumers, remain high.

Many interest rates on credit card debt hover around 20 per cent, though some are as high as 30 per cent.

NDP finance critic Peter Julian and industry critic Brian Masse have been calling on the federal government for days to ask banks and credit-card companies to lower interest rates.

"So far, the government has found ways to help corporations right away, but they are still making Canadians wait weeks," said Masse.

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