The Financial Services Regulatory Authority of Ontario (FSRA) wants to enhance conduct standards for mortgage brokering in Ontario.
FSRA is releasing a proposed Approach Guidance to help Ontario mortgage professionals comply with a proposed National Code of Conduct (Code). The Mortgage Broker Regulators’ Council of Canada (MBRCC) has been working with the Canadian mortgage brokering industry to develop this proposed Code. Consumers of mortgage brokering services can use the Code to learn more about their rights. They can also use it to find out what appropriate service looks like.
FSRA is seeking industry and consumer comments on our proposed approach to incorporating the Code in our supervision.
The request for submissions is now closed.
MBRCC is consulting with industry and consumers on the proposed National Code that FSRA may adopt.
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|Question and response
Question: Dear Sir,
Thank you for your submission. This is outside the scope of the proposed Approach Guidance.
Question: Questions relating to FSRA's approach to guidance with the proposed 'Code of Conduct' are outlined below:
1) FSRA will actively encourage mortgage brokering sector professionals to provide the Code to consumers. However, it will not be required. The Code was designed to help inform consumers of their rights during dealings with licensed mortgage brokering sector professionals.
2) FSRA uses various tools to assess consumer sentiment, including and additional to complaints and whistleblowing. FSRA’s Consumer Office conducts qualitative and quantitative consumer research, which enables consumers to provide direct input to FSRA on consumer sentiment and consumer issues. The Consumer Office has further engaged in work in consumer mapping, which helps to inform our understanding of consumers and potential consumer vulnerabilities. The Consumer Office and other FSRA projects also leverage consumer behavioural insights. FSRA also considers third-party consumer research undertaken by industry or consumer organizations. In addition, FSRA seeks input on consumer issues and consumer concerns from its Consumer Advisory Panel. The panel’s members bring a variety of expertise and experience on consumer issues. They act as an additional tool for giving consumers a voice in FSRA initiatives. Consumer advocates and experts are further represented on some of FSRA’s Technical Advisory Committees. FSRA has further engaged other public interest stakeholders. Their backgrounds include consumer advocacy, consumer and investor protection, charity, academia and law in FSRA’s regulated sectors.
3) FSRA’s supervision of the Mortgage Brokering sector is based on its statutory objects, as outlined in the Financial Services Regulatory Authority of Ontario Act, 2016. Supervision of the sector is designed to be proactive and risk-based. FSRA’s current areas of focus and an outline of the supervision approach can be found here. Licensees conducting business in one or more of these areas may be considered a higher risk (of potential consumer harm) and may therefore be more likely to be selected for examination. Additional factors which may raise the risk profile of a licensee may include:
4) The nature and extent of risks posed to consumers, any mitigating actions taken by the licensee(s), and past supervisory findings are all used to determine a proportionate approach to regulatory discipline and enforcement proceedings. FSRA uses a combination of information sources, including documentation and descriptions from consumers and licensees, business registration information, and other publicly available information. FSRA staff will discuss findings with licensees, in particular any findings that have caused consumer harm and/or breaches of regulatory requirements. Licensees will have an opportunity to respond and, depending on the context, explain how the licensee intends to address the concerns raised.
5) The Mortgage Brokerage Declaration of Compliance will be available to industry upon launch of the Code. The current declaration will include updated language to reflect the adoption of the Code. When applying for a new licence or when filing the Annual Information Return, the principal broker and principal representative of the administrator will be required to declare that the brokerage has implemented processes to ensure that the brokerage and its agents and brokers adhere to the Code, and to identify and address any non-compliance.
6) All mortgage agents, brokers, brokerages and administrators licensed by FSRA can be selected for a review. FSRA selects licensees for review using a risk-based approach, as outlined above (question 3). Additional information on FSRA’s approach for promoting high standards of business conduct in the mortgage brokering sector can be found here.