Your Rights When a Bank Raises Your Line of Credit Limit

Can a bank raise the limit on a line of credit without asking first? Today, in Canada, the answer is no — federally regulated banks need express consent before increasing the limit on a personal line of credit, just as they do for a credit card.

That wasn't always true. For years, credit cards had this protection and lines of credit didn't — a gap that came into sharp focus through a real Ontario case that made national headlines. This guide covers the current rule, the case that helped expose the gap it closed, and what to actually do if a limit has been raised without your knowledge.

Why it matters

An unrequested credit limit increase isn't just an inconvenience — it can materially change how much debt a household is exposed to, sometimes without every person responsible for that debt even knowing it happened. That's especially true for joint accounts, where one account holder may not see every statement or notice.

Knowing the current rule — and knowing that it's relatively recent — helps explain why some older complaints and older news coverage describe a different, less protected landscape than the one that exists today.

The rule today

Federally regulated financial institutions — banks, authorized foreign banks, and federal credit unions — are prohibited from increasing the credit limit on a consumer's non-business line of credit without first obtaining that consumer's express consent. This protection is part of the Financial Consumer Protection Framework Regulations under the Bank Act, which came into force on June 30, 2022.

This is worth being precise about, because it's a genuinely recent expansion of consumer protection. Express consent for credit limit increases has applied to credit cards since 2010–2011, under separate, earlier regulations. The equivalent protection for lines of credit specifically is newer — in force only since June 30, 2022.

The Financial Consumer Protection Framework also introduced broader protections that apply across bank products generally, including requirements around clear disclosure, timely notice before renewals, and a formal complaints process through the Financial Consumer Agency of Canada (FCAC), the federal regulator responsible for enforcing these rules.

The case that helped expose the gap

In April 2018, CBC's Go Public investigated the story of Diane Bennett, a Burlington, Ontario resident. In 1999, Bennett co-signed a $15,000 line of credit agreement with her then-husband at BMO. Over the following years — in 2007, 2008, and again several years later — BMO increased the limit on that joint line of credit, eventually reaching more than $37,000, without, Bennett said, her knowledge or request. She said she only discovered the full extent of it while separating from her husband.

Bennett complained to BMO and then to the Ombudsman for Banking Services and Investments (OBSI); both reviews concluded the bank had not violated the rules that existed at the time. BMO stated publicly that it had complied with all applicable legal requirements. It's important to be clear about what this case does and doesn't establish: Bennett's account is a reported news story, not a legal finding of wrongdoing, and BMO disputed the characterization that anything improper occurred.

The regulator does enforce this kind of rule

While there isn't a widely publicized enforcement decision specific to a line-of-credit limit increase, FCAC has demonstrated it will act on this type of violation for credit cards, which operate under a closely related consent requirement. In Commissioner's Decision #139, FCAC found that RBC's procedures for pre-approved credit card limit increases between February 2015 and March 2017 did not adequately capture the regulatory requirement for express consent or present the offer clearly and simply, resulting in a penalty. The decision explicitly noted that the requirement for express consent on credit limit increases has been in force since 2010 and found no ambiguity in what was expected of the institution.

This decision doesn't concern a line of credit specifically — it's about credit card limit increases. But it demonstrates the same underlying principle — express consent for credit limit increases — being actively enforced by the regulator responsible for both product types, relevant context for how seriously the newer line-of-credit-specific rule is likely to be treated.

Which regulator handles a complaint depends on the lender

This is where jurisdiction gets a little more complicated in Ontario specifically, and it's worth being careful here — the following is a practical simplification, not a legal opinion.

• A line of credit from a chartered bank (RBC, TD, BMO, Scotiabank, CIBC, National Bank, and other federally regulated financial institutions) falls under the Bank Act and FCAC's oversight. Complaints about consent violations at these institutions go through the bank's own complaint process first, then, if unresolved, an external complaints body, and FCAC itself handles regulatory enforcement.
• A line of credit from an Ontario credit union or caisse populaire falls under FSRA (the Financial Services Regulatory Authority of Ontario), which took over this role from two predecessor regulators — the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO) — on June 8, 2019. FSRA has its own cost-of-borrowing and disclosure framework for Ontario credit unions.
• A line of credit from a non-bank, provincially regulated lender operating in Ontario may fall under the Ontario Consumer Protection Act, 2002, which governs "open credit agreements" — though products already governed by other provincial legislation, such as the Credit Unions and Caisses Populaires Act or the Mortgage Brokers Act, are specifically carved out of that Act's coverage.

The practical takeaway: different regulator, different complaint path, but the same core protection — clear disclosure and consent before a limit changes — applies across all three.

What to actually do

• Review statements regularly, not just when something feels off. A limit increase notice can be easy to miss, especially on a joint account where one holder may not routinely see every statement.
• Watch for unrequested limit-increase notices, whether by mail, email, or app notification. Federally regulated institutions are required to reflect the higher limit on the statement, but confirming actual consent — rather than simply not opting out — is a separate question worth actively checking.
• If a limit was raised without proper consent, complain directly to the institution first. Document the date it was noticed, and request a written response.
• If unresolved, escalate to the appropriate external body based on which type of institution issued the line of credit, per the jurisdiction breakdown above.
• For federally regulated banks specifically, FCAC accepts complaints related to compliance with consumer protection law, separate from the individual dispute-resolution process through the bank or an external complaints body.

Common mistakes

• Assuming the express-consent protection has always covered lines of credit. It's a relatively recent addition (June 30, 2022) — a meaningful gap existed before then.
• Assuming "the bank increased my limit" automatically means a rule was broken. Under the current framework, an increase itself isn't the problem — an increase without express consent is.
• Not checking joint account statements independently. On a joint line of credit, don't assume the other account holder is monitoring for changes on your behalf.
• Confusing FCAC Decision #139 with a line-of-credit-specific enforcement precedent. It's about credit cards specifically — useful as evidence the regulator enforces the underlying principle, but not a direct line-of-credit case.
• Not knowing which regulator to complain to. The right complaint path depends entirely on whether the lender is a bank, an Ontario credit union, or a non-bank provincial lender.

Sources

• Financial Consumer Agency of Canada, "New and enhanced protections for bank customers"
• FCAC Commissioner's Decision #139
• CBC Go Public, "BMO 'automatically' increases line of credit"
• Ontario Consumer Protection Act, 2002

This article provides general information about consumer protection rules in Canada and Ontario. It is not legal advice, and it does not describe every circumstance under which a specific complaint would succeed. The Diane Bennett case is presented as reported news, with attribution to CBC, not as a settled legal finding; BMO disputed the characterization of events in the original reporting. If you believe your rights under these regulations have been violated, consider consulting a qualified legal or financial professional, or contacting the appropriate regulator directly.

What to do next

Checking recent line of credit statements for any limit increase that wasn't specifically requested is the concrete first step this article points to. For how a line of credit's interest-only minimum payment works day to day, see How a Line of Credit Actually Works in Canada. For the specific borrowing limits that apply when a line of credit is secured against a home, see HELOC Debt Just Hit a New High.