Mortgage Broker

ese compliance reviews result in a report being issued to the brokerage or administrator where areas of concern have been identified, and we work with the brokerage on rectifying areas of concern." Having FCNB serve as a regulator and as conduit for consumer feedback is an important factor that will serve to boost trust in the mortgage broker industry, as will consumer education about what to expect when working with a mortgage broker. ere continues to be the potential for consumer confusion, however, when it comes to the distinction between mortgage brokers and mortgage specialists employed by banks. e latter are not required to hold a licence when selling their bank's inventory of products, but any referrals they make to other lenders would immediately trigger their need to obtain a licence and provide disclosure to the consumer, thereby leveling the regulatory playing field with brokers. "ere is a requirement to be licensed unless an exemption applies," says Nicholson. "FCNB takes the licensing requirements of our legislation seriously. If brokers are aware of individuals acting without the required licence, we request that they contact our office with the particulars of the individual who may be brokering so that we can take the proper compliance action." Another important aspect of enhancing professionalism in the mortgage broker industry will be to increase participant knowledge of the Act, disclosure requirements and regulatory compliance. "A mandatory continuing education program for all brokers and associates was launched in December of 2018," says Nicholson. "We chose the education content to target areas where we've seen a need for improvement through our compliance reviews and ongoing inquiries from industry. e program is comprised of five modules: Fraud, Disclosure, Risk and Disclosure in Suitability, Advertising and the Role of the Principal Broker. e education must be completed before April 1, 2019. ose who fail to complete the program will have their licences automatically suspended. All new applicants applying aer December 2018 will be required to complete the mandatory continuing education within four months of their licence being approved." CMB MAGAZINE cmba-achc.ca spring 2019 | 23 coverstory We're happy that the relationship between the regulator and our members in New Brunswick has been positive thus far." –James Shinners, President CMBA-Atlantic Disclosure requirements continue to be a point of some consternation for mortgage brokers in New Brunswick. FCNB has outlined disclosure requirements for brokers, but they have chosen not to be prescriptive in how disclosure forms should be completed. In other words, brokerages and brokers have been asked create their own disclosure form templates, which can then be submitted for review and approval by FCNB. During the period when these approvals are pending, brokers simply have to hope that their ongoing disclosures will have been sufficient enough in the eyes of the regulator should their firm be the subject of a compliance review. At the outset of the regulatory regime, the industry had also been provided certain assurances by FCNB that they would explore the possibility of integrating disclosure forms onto common mortgage application soware, but it does not appear that an integrated solution will be forthcoming any time soon. At this early juncture of the new regulatory regime it is hard to judge the extent of the impact on the industry. In three years, there have not been any proceedings, orders or sanctions brought against a licensed mortgage broker in New Brunswick, although this could simply be a testament to a mature industry that continues to benefit from the existing professional and ethical standards already practised by its participants. It could also be a matter of the regulator's working effectively with the industry to resolve consumer concerns early and effectively. "We're happy that the relationship between the regulator and our members in New Brunswick has been positive thus far," says CMBA-Atlantic president James Shinners. "Ultimately, the FCNB and CMBA-Atlantic both have the shared goals of enhancing consumer confidence in the mortgage broker industry, strengthening professional standards and increasing education. We look forward to seeing the industry continue to evolve in New Brunswick, and I'm confident that we'll see an increasing number of prospective borrowers turning to mortgage brokers for mortgage advice." According to the FCNB, the most frequent inquiries the organization receives from the public regarding broker activity involves the licensing status of an individual or questions regarding the type of activity covered by the legislation. All complaints are reviewed by a compliance officer and where possible resolved with the brokerage. In instances where serious violations may have occurred, the matter is turned over to enforcement for investigation. To assist those working for brokerages and administrators in gaining an understanding of the legislation, FCNB has developed bulletins, guidelines and overviews of the licensing and compliance requirements, which can all be found at http://fcnb.ca/industry-mortgage- brokers.html.

• Cover