B.C.’s broker association has now formally presented recommendations to the Regulator's Council of Canada explicitly calling for bank representatives to fall under the same regulations as mortgage brokers.
“Imposing boundaries on the conduct of bank representatives creates a level playing field with mortgage brokers in ensuring adequate and reasonable consumer protection,” the Mortgage Broker Association of B.C. explained. “The position of the Provincial Associations is clear: If a bank representative is in any way dealing with third party transactions they need to operate under the same rules as mortgage brokers with the requisite regulation and training.”
And it isn’t just the MBABC who is leading the cause.
“The MBABC in conjunction with other associations has made a joint submission to the Mortgage broker Regulator's Council of Canada, which includes regulators from BC, Alberta and Ontario, on some key issues relating to mortgage broker regulation,” Samantha Gale of MBABC told MortgageBrokerNews.ca. “These issues include the regulation of roving bank representatives and suitability standards. The MBABC met with the MBRCC at their industry meeting on November 23 and addressed some of these issues.”
The recommendations outlined the differences between a mortgage broker and a bank mortgage specialist.
“(A broker’s) role is to shop for mortgages at different financial institutions and find the most suitable deal that fits the borrowers’ needs –this is what makes them an agent or a quasi-agent for the client mortgage brokers also have a clear and unequivocal duty to disclose conflicts of interest to clients,” they said. “This model of brokering contrasts starkly from that adopted by the bank road representative who is fundamentally a salesperson, whose focus is selling mortgages to customers using a model where the bank is the quintessential mortgage shop.”
The three organizations also put forth a compelling argument as to why the same rules should apply to all professionals who have the ability to sell mortgage in Canada.
Of course, this wasn’t the only issue presented. They also made recommendations for suitability, principle based regulation and education. Regarding education, they outlined a proper philosophy called for one association per province to govern the education of brokers.
“Education should be about attracting individuals who want to be well trained professionals not those trying to fast track or find workarounds from doing the necessary work,” they said. “One association per province delivering all professional development or all licensing would allow for shared costs, improved standards and greater professionalism through a shared foundation that can accommodate regional differences.”