Advocacy groups applaud Canada’s new cap on bank NSF fees

Advocacy groups say they’re happy the federal government has capped non-sufficient funds (NSF) fees, but they’re still advocating for greater transparency.

“There’s still some key pieces that we need to fight for, but that’s what we’re here for, and we’re not quitting,” Jordan Smith of ACORN’s London chapter told the London Free Press Wednesday. 

“This is not something we can let go.”

The federal government implemented a rule in 2025 to cap NSF fees for personal chequing and savings accounts at Canada’s banks and credit unions. 

All financial institutions must cap their fees starting today.

The “fees are charged by banks when there are insufficient funds in a bank account to cover a cheque or pre-authorized debit and the consumer does not have overdraft protection,” said the federal government.

“They… represent a source of financial hardship for consumers. These fees disproportionately impact the financial well-being of low-income Canadians who do not have access to overdraft protection and can perpetuate debt cycles by reducing the amount of available funds with which a consumer could pay their bills.”

ACORN, which advocates for low-and moderate-income people, has been fighting the fees for years. The group says some banks charged fees as high as $48 per declined transaction, which they say is predatory.

“These changes will directly benefit millions of Canadians—especially renters, single parents, gig workers, and people living paycheque to paycheque—by preventing fees from spiralling into deeper financial hardship,” the group said in a press release.

ACORN said the new policy not only caps fees at $10 but also prevents banks from stacking multiple charges within a two-business-day period and prevents NSF fees altogether if an account is short by less than $10.

The group said the cap will save Canadians $400 million a year.

However, ACORN said two provisions they wanted in the legislation were removed, including requiring banks to alert customers about the fees before issuing them and requiring banks to publicly disclose how much revenue is generated by NSF fees. 

The Canadian Bankers Association, which represents more than 60 financial institutions operating in Canada, told media their members are ready to implement the changes.

“We encourage Canadians to regularly monitor their account balances, set up balance alerts and consider overdraft protection services to avoid paying NSF fees,” they said in a statement.

“The restrictions on NSF fees will bring down the costs of banking for many Canadians,” said Shereen Benzvy Miller, commissioner of the Financial Consumer Agency of Canada. 

“FCAC will oversee compliance with the new NSF fee requirements, making sure that the rights and interests of financial consumers are protected.”

The federal government said that consumers who want to further reduce their banking fees have options.

“Fourteen federally regulated financial institutions, including Canada’s six largest banks, have signed on to a modernized Commitment on Low-Cost and No-Cost Accounts,” said the government. 

The commitment says banks will promote low or no-cost accounts alongside their more expensive counterparts and train their staff to offer these accounts. 

Some groups automatically qualify for no-cost chequing accounts at Canada’s major banks, but they have to ask the bank to make the switch if they’re currently paying.

Those groups include seniors receiving the Guaranteed Income Supplement (GIS), Registered Disability Savings Plan beneficiaries, youth 18 and under, students and newcomers to Canada for the first year.