Capital One 2012 Annual Report Download - page 33

period to work towards compliance with the regulation. Key proposed changes that we expect would impact
COEP include:
• Requirement on companies to notify any breach of the regulation to the Information Commissioner’s Office
(“ICO”) and to individuals whose data has been affected or compromised as a result of the breach;
• Increased powers, including the ability to assess fines, given to the ICO;
• Requirement to conduct a Privacy Impact Assessment for all areas of the business including any changes to
systems.
• Mandatory appointment of a data protection officer who must act independently and autonomously at all
times.
• Widening of the definition of personal data.
Canada
In Canada, COBNA operates as an authorized foreign bank pursuant to the Bank Act (Canada) (the “Bank Act”)
and is permitted to conduct its credit card business in Canada through its Canadian branch, Capital One Bank
(Canada Branch) (“Capital One Canada”). The primary regulator of Capital One Canada is the Office of the
Superintendent of Financial Institutions Canada (“OSFI”). Other regulators include the Financial Consumer
Agency of Canada (“FCAC”), the Office of the Privacy Commissioner of Canada, and the Financial Transactions
and Reports Analysis Centre of Canada. Capital One Canada is subject to regulation under various Canadian
federal laws, including the Bank Act and its regulations, the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act and the Personal Information Protection and Electronic Documents Act.
In 2012, there were two new regulatory developments that affect credit cards issued by federally regulated
financial institutions in Canada. These amendments could increase our operational and compliance costs and
affect the types and terms of products that we offer in Canada.
In March 2012, Negative Option Billing Regulations were made under the Bank Act. These regulations require
federally regulated financial institutions to obtain the express consent of individuals before providing new
primary or optional products and services to individuals. Generally, the Negative Option Billing Regulations
prescribe the timing, manner and content of disclosure that must be provided to individuals before they can
expressly consent to new products or services. These regulations came into force on August 1, 2012.
In September 2012, the Credit Business Practices (Banks, Authorized Foreign Banks, Trust and Loan
Companies, Retail Associations, Canadian Insurance Companies and Foreign Insurance Companies) Regulations
were amended to require a bank to obtain express consent prior to providing credit card checks to a borrower. If
consent is given orally, the bank must provide confirmation of that consent in writing (paper or electronic). The
amended regulations also provide that the use of the credit card or the use of the check does not constitute
express consent. These amendments will come into force on June 20, 2013.
COMPETITION
Each of our business segments operates in a highly competitive environment, and we face competition in all
aspects of our business from numerous bank and non-bank providers of financial services.
Our Credit Card business competes with international, national, regional and local issuers of Visa®and
MasterCard®credit cards, as well as with American Express®, Discover Card®, private-label card brands, and, to
a certain extent, issuers of debit cards. In general, customers are attracted to credit card issuers largely on the
basis of price, credit limit and other product features.
Our Consumer Banking and Commercial Banking businesses compete with national and state banks and direct
banks for deposits, auto loans, mortgages and trust accounts and with savings and loan associations and credit
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