That review of B.C.’s broker legislation includes a look at whether mortgage specialists should be rolled into the regs, effectively holding their feet to the fire alongside channel competitors.
“Section 11 provides an exemption from registration for persons employed by savings institutions, which includes banks and credit unions,” reads the discussion paper now being circulated across the industry as the province’s ministry of finance reviews the current legislation. “This has become an issue for some mortgage brokers in BC who claim that some bank representatives are either brokering or co-brokering mortgage applications and placing borrowers with lenders other than the bank that employs them.”
Brokers continue to sound the alarm about road and bank reps that overstep the mark and effectively take on the role of brokers by helping to arrange financing outside of their institutions.
Any move that would take B.C. in the direction of required licensing for those bank workers would set a precedent for other provinces to follow. It would also answer broker calls an even playing field – not only for themselves but consumers.
It’s an argument regulators seem be increasingly receptive to hearing.
“There may also be a consumer protection element to the problem,” reads the white paper, in posing the question of mortgage specialist inclusion. “Borrowers who are dealing with a bank employee may find themselves being offered a mortgage product with a lender they have never heard of.”
The ministry’s review should provide better framework for the registration and regulation or mortgage brokers in B.C, argues the government. Its review is geared towards identifying and addressing legislative aspects that may expose consumers to financial risk or “create undue inefficiencies in the market.”
It has, in fact, given all stakeholders until February 28, 2013, to submit their comments and suggestions electronically to: email@example.com. CAAMP, in consultation with provincial association MBABC, is now preparing a response, writes CAAMP Chair Daryl Harris.