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Mortgage Services Act Frequently Asked Questions
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The Mortgage Services Act will establish a new regulatory framework for the mortgage services industry in British Columbia. Once in force, it will repeal and replace the outdated Mortgage Brokers Act, modernizing B.C.’s mortgage services industry to provide greater consumer protection.
Although it has been amended several times since its enactment in 1972, the current Mortgage Brokers Act has not kept pace with evolving national and international standards in consumer protection, changes in the financial services market and emerging issues such as money laundering in the real estate market.
The Expert Panel on Money Laundering in B.C. Real Estate described the Mortgage Brokers Act as “antiquated and narrow” in its 2019 report, and the Cullen Commission’s 2022 report called for the modernization of the mortgage broker regulatory regime by replacing the Mortgage Brokers Act with new legislation. The new Mortgage Services Act and associated legislation will enact some of the recommendations made by the Cullen Commission.
Timelines for the implementation of the new Mortgage Services Act are still to be determined.
The B.C. Government’s Ministry of Finance is currently developing the rules and regulations that will accompany the Mortgage Services Act, and timelines for the approval of these rules and regulations have not yet been determined.
BCFSA will communicate information regarding expected timelines to the mortgage services industry once known.
Current registrants will need to become licensed under the new Mortgage Services Act.
Details about when and how to become licensed under the new Mortgage Services Act will be shared with the mortgage services industry once more information and timelines are known.
Under the new Mortgage Services Act, enforcement activities will be more closely aligned with the Real Estate Services Act for operational efficiency, including as it relates to:
- Misconduct
- Complaints, investigations, and discipline proceedings
- Orders
- Undertakings
- Appeals to the Financial Services Tribunal
- Administrative penalties
- Applications in court
A new disciplinary framework and an increase in discipline penalty maximums will also be introduced, increasing the maximum penalty from $50,000 under the current Mortgage Brokers Act to $250,000 for brokers or $500,000 for a mortgage brokerage per contravention under the incoming Mortgage Services Act.
Under the new regulatory regime, current registrants will be required to become licensed, as opposed to being registered with BCFSA. Information about when and how to become licensed under the new Mortgage Services Act will be shared with the mortgage services industry once timelines are known.
The Mortgage Services Act also grants BCFSA enhanced jurisdiction over unlicensed mortgage services activity, expands offences and increases the limitation period from two to six years.
The licence levels and categories are referenced in Section 9 of the Mortgage Services Act. There are four licence levels, and each licence level will have at least one category associated with it.
Licence levels:
- Mortgage Brokerage: Business entity that carries on business of providing mortgage services.
- Principal Broker: Individual with accountability who represents the business entity.
- Mortgage Broker: Individual who provides mortgage services on behalf of the business entity.
- Mortgage Lender: Business entity or individual that provides the service of mortgage lending.
Within those licence levels, a person may be licensed within a category established by the rules.
More information about the licensing levels and categories will be provided to the mortgage services industry in the coming months.
BCFSA will oversee the transition from the current Mortgage Brokers Act to the new Mortgage Services Act, and the implementation of the regulatory framework. This will include:
- Providing pre-licensing and continuing education to those in the mortgage services industry.
- Licensing mortgage brokers and brokerages under the new Mortgage Services Act and supporting them through the transition process.
- Developing resources and information to help guide the mortgage services industry as they navigate the transition to the new regulatory regime.
Once enacted, BCFSA is responsible for administering the Mortgage Services Act.
BCFSA’s enquiries team is available to answer questions you might have about the new Mortgage Services Act. Email them at [email protected].
This webpage will be your primary source of information about the incoming Mortgage Services Act and related legislation, and it will be updated as more information becomes available.