Mortgage Broker

MORTGAGEBROKER mbabc.ca summer 2015 | 7 report from the CEO Our federal and prOvincial governments appear to be taking a renewed interest in beefing up consumer protection in the financial services sector, with an overwhelming series of initiatives and consultations. e federal government pledged to overhaul the consumer protection framework under the Bank Act in the latest federal budget, delivered last April. e government promises to develop a new financial consumer protection code, which is to be enforced by the Financial Consumer Agency of Canada. is new code will contain revamped disclosure rules intended to provide consumers with clear and simple information, restrictions and prohibitions against high-pressure sales tactics, cooling off periods for a broader range of products, enhanced public reporting of consumer complaints designed to increase transparency and accountability, new advertising rules, broadened director oversight requirements to cover all new consumer protection rules and measures to protect potentially vulnerable new Canadians. Mortgage brokers and private mortgage lenders may be particularly interested in the government's pledge to ensure that all lenders (not just the banks) provide borrowers with better disclosure of prepayment penalties. e government of Ontario is looking to overhaul its financial industries with a dizzying array of consultations. e overall mandate and structure of its financial service sector regulators are being evaluated in one consultation, while the Ontario government is looking to bolster consumer protection around payday lenders, cheque cashing services and the like in another consultation (see page 15). Ontario has also launched a review of the regulations around financial planners and advisors to enhance oversight and tailor regulation of this large industry sector. On the B.C. front, the government is overhauling the system for debt collection, making the system easier to manoeuvre through, with enhanced protections for debtors. B.C.'s Financial Institutions Act is also undergoing a broad review, and includes an examination of ways to improve the complaint resolution process for consumers (see page 15 for details). e Canadian Mortgage Brokers Association and MBABC will be participating in some of these consultations, including a consultation with the federal Minister of Finance and the Capital Markets Regulatory Authority concerning the new securities regulatory system for capital- raising activities in B.C., Ontario and various other provinces. We welcome member input on any of these subjects. ere is no doubt that regular periodic reviews of current regulations, legislation and structures in the financial services sector are necessary to ensure that sufficient consumer protections are in place and balanced with public access to financial products and services. In keeping with some of the increased regulatory burdens recently imposed on the mortgage broker industry, the MBABC has enhanced its legal expense insurance coverage for certain regulatory matters. MBABC members will now receive coverage for legal expenses incurred with regulatory proceedings from the British Columbia Securities Commission, and in relation to enforcement proceedings for anti-spam compliance. is extra coverage is in addition to continued coverage for the legal defence for those members caught up in Canada Revenue Agency and FICOM proceedings, and motor vehicle infraction proceedings. is is an extremely valuable benefit for MBABC members, which some may not appreciate until they unfortunately are in dire need of it. ere has been a lot of recent discussion from mortgage brokers and lenders about the challenges in financing properties that have at some point been or are currently marijuana grow- ops or drug labs. e British Columbia Real Estate Association has recently reviewed initiatives in the provinces of Alberta and Ontario to tackle this issue, and has now made recommendations to develop a centralized, consistent process for the disclosure of property- history information. We will be following these initiatives closely. In the interim, in this edition of the magazine we have taken a look at the subjects of real estate disclosures and civil forfeiture of property for drug use, which is an essential read (see page 22). We urge all mortgage brokers and lenders to learn about this area of significant liability. MBABC members will now receive coverage for legal expenses incurred with regulatory proceedings from the British Columbia Securities Commission, and in relation to enforcement proceedings for anti-spam compliance. What new government initiatives in the financial services sector mean for you Samantha Gale ceO MBaBc & MBiBc samanthagale @ mbabc.ca

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