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TORONTO The federal government is trying to bring oversight of the country’s banks back firmly under its control, a power play that would counteract a “sea-changing” court decision two years ago.

The Supreme Court of Canada’s decision in the Marcotte case made the banks subject not only to federal law under the Bank Act, but also to consumer protection laws in every province. It countered decades of established practice and understanding that Ottawa alone was responsible for bank conduct, says Stephen Clark, co-chair of the financial institutions group at law firm Fasken Martineau DuMoulin LLP in Toronto.

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“It was considered the most significant court ruling affecting the bank in decades,” he said, adding that complying would result in a “patchwork” of rules across the country — some in direct conflict with one another — governing thousands of provisions related the bank products and services, such as how interest rates are calculated.