Lobby the Big Five banks to open branches in the inner city
-- City hall and the province haven't raised a stink while banks have repeatedly closed inner-city locations in the last few decades. The only time it was a public issue was about a decade ago when CIBC closed its branch on Main Street, prompting an outcry from the community and NDP MPs such as Pat Martin and Judy Wasylycia-Leis.
Use government funds to create a baseline of deposits for an inner-city bank
-- One way the Assiniboine Credit Union was able to make the numbers work for its new North End branch was thanks to the Winnipeg Foundation and the University of Winnipeg. The U of W and the foundation sit on substantial cash in the form of endowment funds, and they agreed to deposit some of it in the McGregor Street credit union. Governments could do that, too. City hall, for example, has reserve funds it keeps on the side for emergencies such as major snowstorms. That cash could be parked in a community bank or credit union to help the bank count on a minimum amount in deposits. It's an option Consumer Affairs Minister Jim Rondeau said he's willing to consider.
Ramp up federal access-to-basic banking regulations
-- About a decade ago, Ottawa created a set of regulations to guarantee basic banking services to Canadians. Those rules mandate that a bank must open an account for anyone with proper ID, regardless of income, and that banks must cash federal government-issued cheques free. New rules limit the number of days banks can hold personal cheques.
Those regulations could be dramatically expanded, argues Prof. Jerry Buckland in his new book. Ottawa could force banks to immediately cash all government cheques free. And Ottawa could mandate that banks offer a suite of small, short-term loans such as the ones payday-loan shops offer.
The Canadian Bankers Association says the big banks already offer short-term loans at very good rates in the form of overdraft protection, lines of credit and low-rate credit cards.
Tax banks to create an inner-city bank fund
-- In his book, Buckland floats the idea of a small tax, perhaps one per cent, on the profits of the federally regulated banks. That cash could bankroll a "financial inclusion fund" to help set up community banks that cater to the poor. A good example of such a bank is Pigeon Park Savings in Vancouver, a "junior" credit union that opened in 2004. It provides a basic menu of services, with extras tailored to the poor, such as free overdraft protection and bill payment and cheap cheque-cashing. It has been trying to break even just using fees but is often about $100,000 short each year.
A one per cent tax on bank profits might even be overkill. It would have raised $243 million last year, probably enough to open dozens of Pigeon Park Savings.
Ottawa quickly kiboshed the idea, anyway.
"No, there are no plans to introduce such a tax and no plans for a new tax on everyday banking services," a spokeswoman said in an email.