The new mortgage service will provide better protection for consumers, against money laundering | So Good News
Borrowers in BC will soon have improved consumer protections under new mortgage lending laws.
This section improves the regulation of mortgage brokers, lenders and managers by replacing the old Mortgage Brokers Act with the new mortgage brokers act. The new act will give BC’s financial services authority, the BC Financial Services Authority (BCFSA), the ability to create licensing regulations and licensed practices, which was one of the recommendations from the Commission of Inquiry on Money Laundering in BC. issuing licenses with limited exemptions to strengthen compliance and giving BCFSA new powers to set ethical standards and improve disclosure and reporting.
“British Columbians deserve better consumer protection and more transparency in the credit industry,” said Selina Robinson, Minister of Finance. “These new safeguards provide peace of mind, as well as a strong defense against money laundering in our region.”
Using the licensing and sanctioning mechanisms of the Real Estate Services Act, the current system of mortgage services is intended to improve protection for borrowers and lenders in today’s market and allow for future reforms. BCFSA will now have supervisory, regulatory and regulatory powers over the industry, as non-traditional lenders exit, and more people turn to mortgage lenders and online technology to process mortgages.
All in all, the resolution provides a framework for addressing several of the Cullen Committee’s recommendations, including those aimed at reducing spending in the real estate industry.
“This new act will give the BCFSA significant tools to further improve the regulation of mortgage brokers in British Columbia,” said Blair Morrison, CEO and registrar of mortgage brokers, BCFSA. “Increased powers to investigate, discipline, authorize and set ethical standards will ensure better protection for both lenders and borrowers and help BCFSA deal with the issues that come up and work in the future.”
One of the pending changes is an increase in fines for violating the law, starting with a new penalty of up to $100,000. Penalties will increase from $50,000 to $500,000. Individuals or entities with more than one conviction could face a penalty of up to $2.5 million, up from $200,000.
Members of these companies will have ample time to learn about their responsibilities under the new law. The changes will be implemented after development by the BCFSA and industry studies, with the earliest possible implementation of new regulations expected at the end of 2023.
“We are pleased to learn that the federal government is changing mortgage broker laws to reflect changes in the financial market and to address issues that did not exist when the Mortgage Brokers Act was enacted,” said Deb White, President of the Mortgage Brokers Act. Canadian Mortgage Brokers Association – British Columbia (CMBA-BC). “We understand that brokers will have the opportunity to provide feedback on future regulatory arrangements. CMBA-BC and its members look forward to participating in these discussions.”
The laws that currently govern mortgage lenders were enacted in 1972 to protect consumers from hidden fees and difficult mortgages. Although it has been changed several times, it has not kept pace with changes in national and international standards on consumer protection and changes in the financial services market.
“The financial aid market has changed dramatically over the past 50 years,” Robinson said. “We need to provide the tools to manage the financial industry we live in today, and guide companies to follow the business model of the future.”
For more information about the BC Financial Services Authority, visit: www.bcfsa.ca
To read the Cullen Commission’s final report, visit: https://cullencommission.ca/files/reports/CullenCommission-FinalReport-Full.pdf
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