FICOM proceeding with plans

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FICOM announces it is tweaking disclosure rules for mortgages originated by brokers, despite heavy criticism from the industry.

The B.C.-based regulator shared the information with MortgageBrokerNews.ca via email.

“My office is proceeding with plans to implement improved disclosure measures for mortgage brokers in British Columbia,” Carolyn Rogers, Registrar of Mortgage Brokers at FICOM, said. “We have reviewed feedback received from industry in response to the open letter sent in January and appreciate all the comments.”

FICOM put forth a new interpretation of regulation Form 10, which would require mortgage documents to explicitly state how much brokers are compensated.

It welcomed feedback from the industry and many, including broker associations and network heads, argued the change would result in a competitive disadvantage for brokers.

The change will only impact brokers in British Columbia; however, many have argued that similar rule changes could sweep across the nation.

FICOM does not yet have a confirmed implementation date.

“After those directions are made public, I  would expect a transition period for implementation of at least several months,” Rogers said. “My office  continues to welcome feedback from industry on implementation and I have received a number of offers in this regard that we will be following up on.”
 
  • Jean-Francois on 2016-03-30 1:49:37 PM

    As long as the bank fully disclose the commission given to their employes and so on find but if then banks doesn't have the same disclosure then it just a messure aim to kill the brokers

  • Dianne Chafe on 2016-03-30 1:52:36 PM

    I do not see where what we make on a deal serves the public in any way! It only helps promote buying down of rates. Will the banks reps also have to disclose their commission structure?

  • Matt McKillen on 2016-03-30 1:59:55 PM

    There should be similar reforms in place for the bank originators including the points and perks that are paid the referring realtors for sending their clients to the Big 5...

  • AV on 2016-03-30 2:01:59 PM

    wow - obviously all of the input from MBABC and Mortgage Brokers in general had no influence on the end result. Now some of the general public will request that we cover even more of their costs to complete the mortgage transaction than what is often the case now.

  • John Sayer on 2016-03-30 2:37:24 PM

    Discriminatory & Anti Competitive lording that does nothing but miss 70% of their intended audience.

    FICOM appear to have an hidden agenda otherwise they would attempt to protect more than a paltry 30% of their public.

  • Pierre Bellegarde on 2016-03-30 2:51:11 PM

    will the banks brokers representatives reveal there salary? or Revenus? always two laws one for the banks and one for the rest of the world including brokers.

  • sheri trach on 2016-03-30 2:57:57 PM

    With respect to the new disclosure,(which needs revamping because the way it is set up is confusing to the clients) I don't see the reasoning with respect to compensation disclosure as the client is not paying us the lender is. (Do the banks disclose their employees wages, benefits and bonuses based on their annual performance and projections, or incentives if they meet their goals??) ON alternative lending I feel that disclosure is required(as we are currently doing that) as the client is paying for the costs?? Is this affecting the banks as well to fully disclose the same info?? that's my question or is this one sided and only affects the broker channel??

  • Anthony C. on 2016-03-30 3:52:04 PM

    FICOM regulates insurance companies,credit unions, and trust companies operating in British Columbia. They DO NOT regulate banks... That is the responsibility
    of the federal Office of the Superintendent of Financial Institutions (OSFI).

    Suck it up people...them's the industry rules in B.C.

  • RR BC on 2016-03-30 4:36:43 PM

    Suck it up? What a foolish comment. There is nothing constructive about saying that. We have rights and need not fear FICOM. It is time to make a legal challenge to FICOM's ruling. Because they have re-interpreted the wording in the Mortgage brokers act it doesn't mean they are right. FICOM's behavior is inconsistent and hypocritical on so many fronts. They continue to allow RBC to broker deals to many of our "broker only" lenders yet the people at RBC don't appear to have a mortgage broker license. FICOM doesn't even have the decency to send this release out directly to mortgage brokers. FICOM is a disgrace and needs to be challenged.

  • kac on 2016-03-30 5:51:03 PM

    funny how no one seems to regulate the banks except for of course the banks that are servicing the brokers, maybe that is why i see so many discharge fees of $325 when the law only allows a discharge fee of $75 as well as pre payment penalties that are only minimized when class action suits take place.

    quite possibly the regulators for banks and brokers need to get on the same page to protect the innocent consumers if indeed that is truly who they are trying to protect which we all know they don't have anyones interest except their own in mind and certainly not the consumers.

  • Bill on 2016-03-30 8:19:53 PM

    FICOM does not listen. It's just going through the motion.

  • More than just One voice! on 2016-03-30 8:47:30 PM

    We demand better than your piecemeal approach Ms. Rogers! The BC Mortgage Brokers Act is an antiquated piece of (legislation), with little relevance to the today's marketplace.
    FICOM has made a point of keeping Mortgage Brokers in this province at a competitive disadvantage for some time now i.e. not allowing personal corporations, similar to BC Realtor's PREC; onerous form and documentation changes with little assistance in the way of standardized forms; and now this poorly researched decision! Unfortunately, you elected to proceed with zero "advanced" input from industry or the professionals serving in it. And please do not attempt to tell us that your asking for feedback, post-decision-making, is "legitimate input"!
    I suspect that some brave souls with deep pockets will see this for the breach of privacy that it really is, and will take you up on a court date, thus wasting even more tax dollars on legal bills... Money that could have easily been spent on rewriting the Act. Probably best you leave that alone anyways, lest you screw it up worse than this! #itsyourlegacy

  • Bert Czombos on 2016-03-30 11:44:51 PM

    Sounds to me like you guys need a good class action lawyer. That's about as blatant a case of unfair trade practice as it gets. Or refuse as an industry to comply and let the court decide if this invasion of privacy has any legal merit. As a mortgage agent - we ask what a person earns as it is pertinent to the mortgage approval. So then I should be able to query a bank teller or a branch manager as the their salary. By use of the same logic - wouldn't what the employees earn impact my service charges ? Carolyn Rogers and her office are gov't employees ? As tax payers you guys should all inquire as to the salaries of all that work in that office, as well as the salaries of all outside suppliers who provide goods and services to the BC government - because that affects YOUR taxes and by the same logic - again - you have the right to know.

  • BC Broker on 2016-03-30 11:54:31 PM

    Well...99% of my clients dont even review the Form 10, just sign the last page. I will leave it off and add it after they sign. None of their business what I make.

  • Brokers united on 2016-03-31 12:07:03 AM

    Retain a seasoned lawyer and don't roll over. All the requests for feedback and the fancy response is a waste of the paper it was printed on, if rolling over is the ultimate outcome. I'd love to think we have a Association that carries some clout. I'd hate to think it was just a money grab :-(

  • Joe on 2016-03-31 8:59:07 AM

    Like it or not broker commission is a cost to the consumer which is built into the banks FTP. To say that the consumer doesn't pay is not strictly true, which is why some brokers can reduce the rates by receiving a lower commission. Brokers should be careful when demanding bank mortgage specialists disclosure their commission, which is more than likely a lot lower than the commission paid to brokers. It'd be hard to argue against banks commercials if they ever stated brokers are paid more than their own reps. I've always believed that ALL mortgages should be fee only, if this works in the US, then why not here where we originate far fewer mortgages.

  • James on 2016-03-31 10:14:18 AM

    Brokers - you need to STOP with the bank rep talk! Here is the reality:

    The bank fully discloses 100% of the income that they earn on every product sold to the consumer as required by OSFI. The bank reps that sell these products are employees of the bank and they only sell the banks products.

    Unlike Mortgage Brokers they do not make the claim that they work for the customer and not the bank.

    They do not have minimum volume requirements with lenders. They do not receive big fat volume bonus cheques for sending more volume to one lender over another and they do not get sent on fancy trips as incentive to send volume to one lender over another.

    Bank reps are paid, in 99% of the cases, less than half what an independent broker makes on a deal.

    You continue to complain and complain about bank reps, but it is NOT the same. You are comparing apples to oranges.

    Brokers, for years, have been making the claim: "We work for you and not the bank" - when technically that is absolutely 100% untrue. You legally work for the company that contracts you to source business for them and pays you for that service. The banks pay you to source business for them and you are handsomely rewarded for doing it. You do not work for the client. You are an independent contractor of the bank. But see... when you advertise that you don't work for the banks, you are not telling the truth.

    You can tell the consumer that you are looking out for their best interest, you can tell them that you can provide them with greater choice because you have access to a greater number of products and lenders, but you cannot tell them that you work for them and not the banks - because... once again... that is not true.

    The regulator would not be making this change without good reason, and I can only guess that they got some complaints or have found issues with the way brokers in BC are conducting themselves, either in advertising or in practice.

    The fact that the politicians did not move to fix this tells me that even after all the discussions with the Premier, and other MLA's (who happen to be in a government that is famous across Canada for putting the interests of business first and foremost) tells me that there is obviously some issues in BC.

    As for the rest of Canada, don't think that this will not come to you eventually.

  • nick on 2016-04-03 3:06:51 PM

    james The issue is not the disclosure but the purpose of the disclosure. What does that do to protect the client? Obviously we are already disclosing our income by way of financial statements to one arm of the government. And you are wrong about who we work for. I work for the client( borrower) especially when i make a habit of getting my clients to sign a brokerage agreement . By having this legal agreement with the client i am definitely working for them. The fact that the bank pays me in essence for that client does not make the bank my client. This is a mute legal point. When making arguments for this Ficom implementation please use real arguments and not ones that reveal your jealousy towards the brokerage profession.

  • nick on 2016-04-03 3:06:52 PM

    james The issue is not the disclosure but the purpose of the disclosure. What does that do to protect the client? Obviously we are already disclosing our income by way of financial statements to one arm of the government. And you are wrong about who we work for. I work for the client( borrower) especially when i make a habit of getting my clients to sign a brokerage agreement . By having this legal agreement with the client i am definitely working for them. The fact that the bank pays me in essence for that client does not make the bank my client. This is a mute legal point. When making arguments for this Ficom implementation please use real arguments and not ones that reveal your jealousy towards the brokerage profession.

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