“We are actively consulting with MBABC, CAAMP
and directly with leaders in the BC mortgage broker community on implementation,” Chris Carter, Deputy Registrar of Mortgage Brokers at FICOM, wrote in an email to MortgageBrokerNews.ca. “We are mindful that industry members may need to make adjustments to respond to the new requirements.
“Given these ongoing consultations, it would be premature to identify a precise implementation date at this stage.”
The regulation change, which was first hinted at in a MBRCC bulletin
, has been met with great protestation from brokers who argue such disclosure is unnecessary. Many have pointed to the fact that brokers are not compensated by the borrower as an argument against disclosing to clients those fees paid by lenders.
“ … There is no benefit to the consumer. No one knows how much the dentist that fixes your teeth makes, the salesman that sells you the TV makes, the lawyer who completes your purchase makes – they only know what it costs them,” one commenter wrote on MortgageBrokerNews.ca. “Clients should be advised when they are being charged fees or when the rate they get relates directly to the compensation received, otherwise it's not relevant.”
FICOM also provided details on what sort of compensation brokers will soon have to disclose to clients.
“The law in British Columbia requires that brokers describe to the borrower any direct or indirect interests the broker, or a related party, has or may acquire in the transaction,” Carter said. “Improved conflict of interest disclosure will include a requirement that brokers disclose the amount of compensation they receive from lenders, including base compensation, volume bonuses, and other rewards.
“It will also require disclosure of compensation paid to another broker in co-brokering situations.”
FICOM has confirmed it will require brokers to reveal compensation details to clients, but has yet to confirm an implementation date.