Ministry of Finance

New Mortgage Brokers Act passes third reading

McGuinty government strengthens mortgage system

    TORONTO, Nov. 28 — The McGuinty government's commitment to
improving consumer protection and modernizing financial regulation was
confirmed yesterday with the successful third reading of the Mortgage
Brokerages, Lenders and Administrators Act, 2006.
    "Obtaining a mortgage to buy a home is likely the biggest financial
commitment families will make," said Finance Minister Greg Sorbara. "This
legislation protects Ontarians by improving the accountability of the
industry, and modernizing financial services regulation to support a new
generation of economic growth."
    The new legislation will require individuals and businesses who deal in
mortgages to be licensed by the Financial Services Commission of Ontario
(FSCO). In addition, brokerages will be required to have a Principal Broker
who will oversee conduct and act as the chief compliance officer for the
organization. Other provisions in the legislation modernize FSCO's enforcement
powers and allow for improved standards of practice, including enhanced
disclosure of remuneration and conflicts of interest.
    Consultations on the proposed regulations and the education review are
also continuing. The new legislation will be proclaimed once the regulations
and the education review are finalized and when members of the industry have
been given an appropriate period to understand and comply with the
requirements of the new Act.
    The government and FSCO will continue to keep the industry informed on
the progress of this important initiative as it moves forward.
    "This new legislation has the full support of stakeholders," Sorbara
added. "The open, accessible and transparent process we've used to prepare
this legislation helps to ensure it will work for the people, businesses and
economy of our great province."

    Disponible en français

    

                 For more information visit www.fin.gov.on.ca


    Backgrounder
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          Mortgage Brokerages, Lenders and Administrators Act, 2006
              Industry Preparation for the New Licensing Regime

 — On November 27, 2006 Bill 65, the Mortgage Brokerages, Lenders and
        Administrators Act, received third reading.
 — It is not anticipated that the legislation will be proclaimed until
        consultation has taken place on the associated regulations.
 — In addition, an appropriate amount of time will be allocated to
        provide for communication to the industry.
 — At this point, industry participants are not required to take any
        measures in anticipation of the new legislation.

    Bill 65, the Mortgage Brokerages, Lenders and Administrators Act

    Bill 65 replaces the existing Mortgage Brokers Act, which dates from the
early 70s, to improve consumer protection with updated rules. For example:
 — All mortgage brokers and agents would need to be licensed;
 — Mortgage brokerages would be responsible for properly supervising
        their brokers and agents; and,
 — Administrative penalties would be introduced.
    

Contact Info

    Consultation on Draft Regulations

    A number of draft regulations, including licensing regulations, were
released for public consultation on November 24, 2006. The government is
consulting on these regulations over a period that concludes on January 19,
2007.
    Further regulations to be released include standards of practice for
brokers, agents and administrators and administrative penalties.
    Bill 65 and the draft regulations that have been released can be found on
the government of Ontario website at www.gov.on.ca.

    Next Steps

    Once the licensing regulations have been approved, the Financial Services
Commission of Ontario (FSCO) will be in a position to communicate the
preliminary steps that will be required to move to the new licensing regime.
    Registrants under the current Mortgage Brokers Act will be contacted
directly by FSCO and information regarding changes that need to be made over
the coming months will be available on FSCO's website at www.fsco.gov.on.ca

    Disponible en français

    

                              www.fin.gov.on.ca