People buying a home will soon be better protected by new rules and regulations for the mortgage services industry.

“Buying a home is often one of the biggest financial decisions people make in their lifetimes, and it’s important that they have peace of mind,” said Brenda Bailey, Minister of Finance. “The new framework for the Mortgage Services Act raises standards across the mortgage industry, improves accountability and helps protect both home buyers and lenders, while supporting efforts to crack down on money laundering.”

The Mortgage Services Act and its newly approved regulations respond to recommendations of the Commission of Inquiry into Money Laundering in British Columbia (the Cullen commission). In 2022, the commission identified gaps and vulnerabilities in the regulation of mortgage brokering. The new act expands regulatory requirements and provides the BC Financial Services Authority (BSFSA) with enhanced tools to regulate the industry, such as tools to investigate, license and set standards of conduct.

This means homebuyers can be confident that they are getting fair, safe and transparent mortgage advice.

The act, introduced in November 2022, replaces the Mortgage Brokers Act, put in place in 1972. Although it has been amended several times, it has not kept pace with the changes in the financial-services market and evolving standards for consumer protection and anti-money-laundering initiatives.

“The mortgage market has changed dramatically in the 50 years since the Mortgage Brokers Act was passed,” said Tolga Yalkin, CEO and chief statutory officer, BCFSA. “It is larger, more complex and operates at a much faster pace. The Mortgage Services Act will reflect the realities of today’s market to address current risks and will be adaptable to address emerging ones to ensure we can better protect everyone involved.”

The framework for the Mortgage Services Act sets out more explicit requirements for mortgage brokers to provide homebuyers with honest, transparent advice so that they are not unknowingly entering into risky or unfair mortgage agreements.

It also protects the housing market by deterring criminals from using real estate to launder money by increasing oversight, making suspicious transactions easier to detect and investigate. Brokers will also be required to follow tighter anti-money-laundering rules.

New mortgage services rules set out four categories of licensing:  

• dealing in mortgages;
• trading in mortgages;
• administering mortgages; and
• mortgage lending.

“Mortgage Professionals Canada is supportive of the overhaul of the regulatory framework for mortgage brokers, the first significant change in 50 years,” said Lauren van den Berg, president and CEO, Mortgage Professionals Canada. “We, as an industry, are in strong support of enhancing consumer protection and combating fraud in the real-estate sector, including income-document fraud and money laundering. This has been one of our top advocacy issues not just in British Columbia, but at a national level.”

Recent approval of a regulatory framework for the new Mortgage Services Act brings it into force in fall 2026, providing the industry and regulator with a 15-month period to prepare. The Province and BCFSA are working together to achieve a smooth transition to the new rules, ensuring industry workers have time to learn about the changes.

“CMBA-BC supports the principles of consumer protection and a strong, professional mortgage-broker industry in British Columbia,” said Rebecca Casey, president, Canadian Mortgage Brokers Association - BC (CMBA-BC). “We look forward to reviewing the final details of the new Mortgage Services Act's rules and regulations, and emphasize the importance of modernizing the regulatory framework to reflect today’s housing and lending environment. We are committed to working collaboratively with BCFSA and the provincial government to ensure the implementation of the act supports mortgage brokers in helping British Columbians achieve their homeownership goals.”

Information about the transition, including support provided by BCFSA and action required from mortgage brokers, is available on BCFSA’s Mortgage Services Act webpage, linked below.

Quick Facts:

• The Province’s introduction of the Mortgage Services Act in November 2022 is a key response to the Cullen commission recommendations.
• The Mortgage Services Act aligns closely with other financial services legislation in B.C., including the Real Estate Services Act, allowing for efficient regulation and encouraging responsible business conduct.
• There are more than 7,000 registered mortgage brokers and sub-mortgage brokers in B.C.

Learn More:

To learn more about transition process to the Mortgage Services Act, visit:
https://www.bcfsa.ca/industry-resources/mortgage-broker-resources/mortgage-services-act  

To read the Cullen commission final report, visit:
https://cullencommission.ca/files/reports/CullenCommission-FinalReport-Full.pdf