KEVIN MENZ
Associate News Editor

Although Royal Bank eventually restored Brad Bellemare’s credit rating, alleged poor communication on behalf of RBC regarding his student loans has mired Bellemare in court battles over a denied mortgage.

In July 2010, RBC took legal action against Bellemare because of a $25,000 unpaid debt on his student line of credit.

Bellemare counter-claimed against RBC for $60,000 accusing them of mishandling his loan contract by not communicating well with him. He believes this hurt his credit rating and ability to obtain a mortgage.

His goal was to buy space to start a small law firm with the mortgage.

“I’m just asking to be put back into the place I would have been had I received the mortgage and the business opportunities.”

He claims RBC did not update him on his required payments. But RBC, in their statement of defence, claims they “did not refuse to communicate with Bellemare.”

Bellemare says they will have to provide evidence of this communication.

“What they are going to have to produce [in court] is the letters they sent to my addresses that say, ”˜We did advise him,’ ” he said. “Those letters will show that they sent them to the wrong addresses [because] RBC didn’t send me anything.”

He did not know which bank his student loans were with, but claims he made an effort to find out.

“I physically went down to the RBC [on College Drive] and said, ”˜Can you please check to see if I have a loan with the RBC, under student loans?’ ”

They said they had no record of the loan, he claimed. Lawyers representing the bank were unavailable for comment.

Confusion may have arisen, however, during the establishment of the Royal Bank Student Loan Service Centre division within the RBC.

“I was never informed of the creation of the student loan division. But what they did was take student loans from the RBC and put them into this separate department,” said Bellemare.

“They failed to connect the records between my RBC account and my student loan account.”

This lack of connection between the bank and its divisions, he claims, led to the denial of his interest relief application.

Interest relief is a government program that allows loan borrowers to be exempt from making payments to the outstanding balance of their loan and its interest payments for up to a maximum of six months. The federal or provincial government will pay the interest on the loan for that period of time, after which applicants must reapply or continue with loan and interest payments on their own.

Acceptance and denial of application is based on family income, loan status — the loan must not be in collection — and whether or not the borrower has signed a consolidation agreement. RBC’s statement of defence states that they “received notification from the National Student Loan Centre on June 21, 2007 that Bellemare was refused interest relief as his income exceeded the allowable limit.”

He claims, however, that the instance the RBC is referring to is irrelevant as it is not the instance he had appealed to the Minister of Human Resources and Skills Development Canada.

“The money that I applied for was when I returned to Saskatoon from Calgary in May 2009. The National Student Loans Centre turned around and said, ”˜No, RBC has stopped this [application for interest relief].’ ”

He had appealed to the Minister of HRSDC because of this alleged interference, but was not satisfied with the response.

“They said, ”˜We don’t have the man-power to investigate all the appeals,’ which is a clear breach of administrative procedure,” explained Bellemare. “Then they changed their story to say, ”˜We fixed everything up for you,’ but this was after I sent them a letter from RBC.”

In a letter from RBC to Bellemare dated Sept. 23, 2008, the bank apologized to Bellemare for their “oversight” regarding denial of his interest relief applications during the period from Nov. 1, 2006 to Aug. 30, 2008 — lawyers with RBC were, once again, unavailable for comment on the term “oversight.” They also promised to reimburse him $1,300 for the interest from the denied period and that they would fix any “negative remarks on [his] credit bureau report as a result of this incident.”

They have since done so.

“That still didn’t fix the problems they created for me — the credit destroyed me,” said Bellemare. “Everything is good right now; all that stuff [the negative remarks] is off my credit record, but that doesn’t get me out of the conundrums it put me into. My whole intention was to set up a small law firm and get a mortgage, and in my opinion they have taken away the opportunity to do that.”

Bellemare has also filed a third-party claim against the Attorney General of Canada because of a lack of faith in HRSDC’s investigative procedures. After his application for appeal, HRSDC claimed an investigation but could not produce any record of it.

“There is clearly no evidence of an investigation,” said Bellemare. “They didn’t do what we are entitled to as student borrowers.”

He is accusing the Attorney General specifically because of the hierarchies of responsibility.

“The Attorney General is responsible for the Minister of the HRSDC. The HRSDC is responsible for the administration of federal student loans.”

The statement of defence from the Attorney General states that “there is no duty of care to protect the economic interests of the Third Party Plaintiff [Bellemare]” and asks that the “claim be dismissed.”

Lawyers representing the Attorney General did not comment on the case.

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image: Pete Yee