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.