Banks are 'getting away with it,' says broker

Banks are 'getting away with it,' says broker

Banks are

Brokers are disappointed that the government’s move to tighten up the complaints process for banks does nothing to address the issue of unlicensed mortgage specialists or the fact their employers effectively control the process.

 
But for brokers, it is still banks policing themselves.
 
“The banks have been getting away with it, quite frankly,” says Steve Garganis, a broker with Mortgage Intelligence, describing the current monitoring and complaint process. “Are these third party companies truly independent? I don’t think the new regulations go far enough, and I’m a little disappointed the government isn’t more clear in what they are trying to accomplish – creating true accountability.”
 
Ottawa announced tougher consumer protection regulations for banks this week, extending the monitoring and enforcement powers to the Financial Consumer Agency of Canada. While the banks will still be able to handpick their complaints ombudsmen, those third parties will be subject to greater oversight.
 
Mortgage professionals and consumer groups object to that, but what adds to the frustration of brokers is that mortgage specialists are operating without any real standards, at least none that mortgage brokers must uphold, argues Garganis.
 
“They are, in effect, mortgage brokers – without the accountability,” says Garganis. “There is nothing to keep them up to a standard. Mortgage specialists have no licensing requirement, no educational requirement – these new regulations have no real impact on this reality.”
 
The government isn’t addressing that with these changes billed as living up to transparency mandates.
 
“Our government is committed to protecting consumers,” said Finance Minister Jim Flaherty in the announcement. ”These new rules create a stronger, more independent consumer complaint system, by setting high, pro-consumer standards that all banks and authorized foreign banks must meet.”
 
RBC, TD withdrew from OBSI last year - continued on page 2


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18 Comments
  • Versico Financial Inc. 2013-04-12 9:11:46 AM
    If the brokerage industry wants to see these bank road warriors licensed then it should put pressure on the Provincial mortgage brokerage regulators to stop exempting these individuals from their respective legislation's.
    The bank contracts with these agents are mortgage brokers in all but name and registration. In some contracts they are even authorized to open bank trust accounts.
    Post a reply
  • James Shinners 2013-04-12 9:16:07 AM
    I'd rather not have all bank mortgage specialists become mortgage brokers.
    Post a reply
  • Confussed 2013-04-12 9:16:33 AM
    This article was hard to follow...mortgage professionals, mortgage brokers and mortgage specialists - all seem to be interchangeable within this article. Perhaps defining each would clear things up.
    Post a reply