BCSC on Prepaid Cards

A recent decision out of British Columbia drew attention to a novel situation: are prepaid cash cards issued by a financial institution deposit accounts?

All Trans Financial Services Credit Union Limited sold prepaid Visa and Mastercards to customers, who could then use the payment cards wherever Visa and Mastercard were accepted. When the Financial Institutions Commission (FIC) investigated, they determined that this was an unauthorized deposit business, contrary to s.81 of the Financial Institutions Act. The FIC  ordered All Trans to cease selling these prepaid cards within 30 days of the release of the order. All Trans appealed to the BCSC, where the order was overturned.

This decision is currently under appeal. As noted in commentary by Robert Dawkins and D. Ross McGowan of Borden Ladner Gervais: Prepaid Cards: Deposit Accounts? Or Something Else?

…  The decision on appeal may have a significant impact on financial institutions seeking to use creative FinTech approaches to expand their reach and service offerings, as well as FinTech start-ups.  Careful consideration to program design is critical to ensure that issuers and program managers structure their card products to meet the regulatory needs for their specific goals.

Other commentary:

Deposit Accounts – Payment Cards (The Lawyers Daily)

 

Case Summary – Homestead Rights

[3] …  Do joint tenants who are spouses have homestead rights?  At what point can a homestead cease being a homestead?  Do homestead rights continue after the untimely death of one of the spouses even though the spouses were separated and had engaged in a course of dealing sufficient to make it clear that they intended their property to be divided equally?

These are the issues defined by Dunlop, J. in Siwak v. Siwak, 2018 MBQB 9. The parties were married and had purchased a home in joint tenancy. They were separated and in the middle of dividing their assets when Mrs. Siwak died. A previous decision (2016 MBQB 61) had severed the property into a tenancy in common. Mrs. Siwak’s estate is seeking partition and sale of the property in order to distribute the assets to her beneficiaries. Mr. Siwak claims he has established an estate for life flowing from his initial homestead rights.

[28]      Even though Mr. Siwak and Mrs. Siwak lived separate and apart for almost one year and nine months before Mrs. Siwak died and despite the fact that they engaged in a course of dealing sufficient to sever the joint tenancy, it is clear that on a strict reading of the Act, Mr. Siwak had homestead rights at the time of Mrs. Siwak’s passing.  One of the primary goals of homestead legislation is to provide a surviving spouse with a life estate in a homestead.  Upon the death of Mrs. Siwak, Mr. Siwak realized a life estate in the property.