Mauris: New broker regulation disaster in the making

Mauris: New broker regulation disaster in the making

Mauris: New broker regulation disaster in the making FICOM’s proposed disclosure rules changes for British Columbia brokers could have a disastrous impact on the industry across the country, according to one major network head.
 
“What happens on April 1, 2016  (when the proposed change goes into place) – on that day, instantly, it could be almost the beginning of the end for our industry,” Gary Mauris, president of Dominion Lending Centres, told a packed room at this year’s CAAMP national conference in Toronto.
 
Mauris said the rule change – which would require brokers in B.C. to disclose all income made on transactions – could erode broker market share from 30% to 15% overnight. He argues bank specialists -- who still won't be required to disclose their commissions -- will use it as a way to sway clients.
 
“FICOM isn’t trying to hurt the economy … they’re not trying to hurt us. I truly believe they don’t understand the consequences,” Mauris said, noting that DLC has a very good relationship with FICOM. “What FICOM hasn’t realized is the minute our market share dramatically (falls) … it affects everyone in this room (including lenders).”
 
FICOM is putting forth a new interpretation of a regulation that requires mortgage brokers to detail for clients how much they earn from lenders on the deal.
 
“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, recently wrote in an email to MortgageBrokerNews.ca. “We are mindful that industry members may need to make adjustments to respond to the new requirements.”
 
Mauris called on brokers to get involved, arguing that its impact will reach much further than British Columbia.
 
A number of industry professionals, including brokers and lenders, are set to meet Tuesday morning in Toronto to discuss the pending change.
 
“We know that FICOM doesn’t want to destroy the industry, but I don’t think they understand,” Mauris said. “Most importantly it affects the Canadian public.”
 
The MBABC has launched a petition against the proposed disclosure requirement.
32 Comments
  • Brandon 2015-11-17 9:35:19 AM
    I think this is a huger over exaggeration. No statistics to back it up. If someone chooses to go with the bank over a broker because of what the broker is paid then you're focusing on the wrong selling techniques. Banks shows profits of 2 Billion a quarter and still control the majority of the market. Where does he get 15% to 30% change? Those are huge numbers.
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  • Nick Bachusky 2015-11-17 9:42:32 AM
    I wish all the brokers in BC all the best and hope there can be a reversal of this unneeded regulation. It brings an unnecessary barrier between us and our client. I also think this is blatantly unfair if the banks do not have to disclose how much they pay. I really hope to not see ties between FICOM and the big banks in the future. It does smell of collusion because of how unnecessary and pointless this is.
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  • Kent 2015-11-17 9:53:38 AM
    Seriously Brandon? Why the hell should brokers be made to disclose their commissions? Is there any other industry that the sales people are forced to tell their clients what they earn? I'm pretty sure that there is not. It is the most absurd thing that I have ever heard of. Can you imagine going to buy a car and the sales person or finance manager says oh by the way Mr. Customer I just made $ xxx.xx off.of you. And thank you for your business. Lol give me a break!
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