Brokers are disappointed that the government’s move to tighten up the complaints process for banks does nothing to address the issue of unlicensed mortgage specialists or the fact their employers effectively control the process.
But for brokers, it is still banks policing themselves.
“The banks have been getting away with it, quite frankly,” says Steve Garganis, a broker with Mortgage Intelligence
, describing the current monitoring and complaint process. “Are these third party companies truly independent? I don’t think the new regulations go far enough, and I’m a little disappointed the government isn’t more clear in what they are trying to accomplish – creating true accountability.”
Ottawa announced tougher consumer protection regulations for banks this week, extending the monitoring and enforcement powers to the Financial Consumer Agency of Canada. While the banks will still be able to handpick their complaints ombudsmen, those third parties will be subject to greater oversight.
Mortgage professionals and consumer groups object to that, but what adds to the frustration of brokers is that mortgage specialists are operating without any real standards, at least none that mortgage brokers must uphold, argues Garganis.
“They are, in effect, mortgage brokers – without the accountability,” says Garganis. “There is nothing to keep them up to a standard. Mortgage specialists have no licensing requirement, no educational requirement – these new regulations have no real impact on this reality.”
The government isn’t addressing that with these changes billed as living up to transparency mandates.
“Our government is committed to protecting consumers,” said Finance Minister Jim Flaherty
in the announcement. ”These new rules create a stronger, more independent consumer complaint system, by setting high, pro-consumer standards that all banks and authorized foreign banks must meet.”
RBC, TD withdrew from OBSI last year - continued on page 2