Bill 72 and NSF Fees in Quebec: Why Harmonization Across All Lenders Matters

Abstract: Quebec’s Bill 72 caps non-sufficient funds (NSF) fees for non-bank lenders at roughly $2, while federal rules allow banks to charge $10. This two-tier system distorts competition and risks reducing financial inclusion. The solution is sector-wide harmonization: a uniform $10 NSF fee cap across banks and non-bank lenders to ensure fairness, deterrence, and consistent consumer protection.

When a Quebecer’s payment bounces, the cost depends less on behaviour than on the institution. Ottawa caps bank NSF fees at $10, while Quebec’s Bill 72 limits non-bank lenders to about $2—roughly what their own bank charges them. The same event, two regulators, two rules.

Processing failed payments isn’t free: it requires staff time, technology, and risk management. For years, a $45 fee reflected those costs. Federal reforms brought that down to $10—a significant cut that still preserves a meaningful deterrent. Quebec’s $2 cap, by contrast, trivialises the cost of default and shifts unrecoverable expenses onto non-bank lenders, many of whom serve credit-constrained households.

Related: Bill 72 background and lender impacts

Negligible penalties invite missed payments. As delinquencies rise and margins compress, responsible non-bank lenders retreat. The unintended result: fewer safe, regulated options and greater exposure to unlicensed, predatory players. A harmonized $10 NSF cap across all lenders would align incentives, protect consumers, and sustain competitive access to credit.

The larger issue is policy consistency. Ottawa has set a national norm for banks; Quebec applies a far tighter rule to non-banks. That asymmetry rewards incumbents, penalises challengers, and fractures the market. Consumers shouldn’t face different outcomes for the same behaviour because of a regulatory patchwork.

Some provisions risk similar distortions. For example, limiting credit-card membership or renewal fees to once per year may appear protective but can undermine smaller providers’ economics—shrinking choice for consumers who most need it. To its credit, Bill 72 strengthens oversight with permits for revolving credit and tougher enforcement against bad actors. But painting responsible firms with the same brush weakens competition and inclusion.

Regulators should align on a single standard: set the NSF fee cap at $10 for both banks and non-bank lenders. This keeps fees reasonable for consumers, maintains an effective deterrent against defaults, and ensures a level playing field that preserves access to credit.

Five Key Ideas on Bill 72 and NSF Fee Harmonization

• Uneven Regulation: Ottawa caps bank NSF fees at $10; Quebec caps non-bank lenders at $2.
• Market Distortion: Different rules for the same activity penalise competitors and reward incumbents.
• Perverse Incentives: Minimal penalties encourage defaults and raise delinquencies.
• Reduced Access: Non-bank lenders may exit, leaving fewer safe, regulated options.
• Policy Fix: Harmonize at a $10 NSF cap across all lenders to protect consumers and competition.