They Were THIS Close To Doing Something Nice… For Once

Due to the economic and personal financial uncertainty surrounding current events, the six largest banks in Canada announced back in March that they were going to allow affected customers to defer their mortgages for up to six months:

https://www.ctvnews.ca/business/canadian-banks-move-to-help-customers-allow-deferral-of-mortgage-payments-1.4857800

From the article: “The banks urged Canadians or business owners facing hardship to contact their bank directly to discuss options that may be available.”

J and I were really surprised when we heard about this – after all, the banks aren’t known for being helpful or even nice to their personal and small business clients – but I suspected there was another shoe to drop.

And today it did.

It turns out that while yes, the banks are allowing deferrals, they will still be charging interest on the deferred payments and adding it to the outstanding balance. That means that the people who applied for deferrals because they can’t pay their mortgages right now because they’ve been furloughed/lost their jobs/have sudden child care costs/are losing their business, etc, will now have to pay interest ON THE INTEREST on they payments they needed a deferral for:

https://www.cbc.ca/news/business/banks-charge-interest-on-interest-for-mortgage-payment-deferral-1.5529399

This can end up adding thousands of dollars to already vulnerable people, families, and businesses… while making the banks that much extra money. I’m not going to go into how much money these banks made last year (you can look that up if you’re interested), but I suspect that while close to a million Canadians lost their jobs in a week (https://www.bloomberg.com/news/articles/2020-03-25/economic-pain-just-getting-started-in-canada-after-jobless-spike), the banks will have no problem making their shareholders happy.

Policies and decisions like this end up hurting the people they’re purported to help. And those people always seem to be the ones who are already struggling.

And the banks were thiiiiiiiiiiiiiiiiis close to doing something good. But then, they acted like… you know… banks.

Stay safe.

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