FICOM: Disclosure Plan a Go

B.C.’s mortgage regulator confirmed today that it is moving forward with its proposal to require brokers there to publicly disclose compensation details, possibly as early as this summer.

“My office is proceeding with plans to implement improved disclosure measures for mortgage brokers in British Columbia,” Carolyn Rogers, Registrar of Mortgage Brokers and CEO at FICOM, said in an email sent to media.

“We have reviewed feedback received from industry in response to the open letter sent in January and appreciate all the comments. I have asked the staff to begin work on the implementation details, and that work is underway.”

Since FICOM proposed the changes last fall, brokers from B.C. and across Canada have been vocal in their opposition to the plan. They contend that the amount of money a broker earns on a deal is of little value to consumers without consumer education or context, and actually confuses some consumers into choosing higher-cost financing.

Broker trade groups Mortgage Professionals Canada and MBABC have taken the position that the changes will harm the industry and consumers, and both submitted written comments to FICOM.

“In our continued discussions with FICOM, we always understood that their intention was to proceed with some form of enhanced disclosure requirement,” said Paul Taylor, CEO of Mortgage Professionals Canada. “The consultation was, to our minds, a means for FICOM to gauge our industry’s appetite for, and solicit suggestions and feedback on, various methods to achieve their stated goal of making consumers aware of any potential conflicts of interest that may arise. As such, the comments made by Caroline Rogers do not surprise us.”

Taylor added that they will continue discussions with FICOM and “wait to see what the final requirements are once released. At this point it would be premature to make any statement regarding the requirements because they have not yet been prescribed.”

FICOM says it will release more details in the next 30 to 60 days, and that it expects a transition period of “at least several months” once its disclosure plan is released.

“My office continues to welcome feedback from industry on implementation and I have received a number of offers in this regard that we will be following up on,” Rogers added.


Related Posts

Brokers Showing Their Hands. The Repercussions.

Explicit Compensation Disclosure – Part II

FICOM Proposes More Compensation Transparency

 

  1. Personally, I think this is great. More transparency in the industry is going to weed out the bad apples who don’t operate in the clients best interest by taking full compensation. I personally have no qualms about disclosing how much I make and have shown numerous clients exactly what is at stake, and how much the buy-down I’m offering costs them.

    I also don’t care if the banks don’t have to disclose how much their paying their agents. I’ve never had a client care about that because my rate is usually better.

  2. I was at a regulator meeting a few months ago and a representative of a consumer group on the panel said: “perfect, thorough and complete disclosure to consumers is NOT enough. Perfect analysis of suitability is NOT enough. Brokers must actually become selfless advocates for the consumer” Whoa, the end of free enterprise as we know it and the death of the concept of personal responsibility. But still, that concept is out there in the world, big as life.

    What am saying here is that our provincial regulators are not just listening to us, they also listen to groups that are saying the polar opposite of us and the regulator MUST listen to them. Regulators exist for the consumer not for us. We must accept their decisions gracefully because not being accepting is pointless and puts us in a bad light with the consumer.

    Just suck it up, drop the fight and move on. Every time opposition to better consumer disclosure is voiced by our industry it looks more and more like we have something to hide. The truth is we have nothing to hide, our work has value and lets stand by that value. Particularly if we offer great rates (shameless plug).

  3. this legislation will slowly eliminate small mortgage brokerages in smaller towns. we are turning clients into Fee discount shoppers instead of rate shoppers. I have no problem with transparency but lenders wont pay me the same amount they pay the large brokerages. some of the larger brokerages earn as much as 30 bps more that i do on the same deal. i cant give away everything and remain in business.

  4. While I have no issue with this scenario it is very important the documents that client sign must stated if indicated that the commission we received does not not effect their rate.
    I believe this is a good thing as right now there are brokers where they discount the rate and charge a fee to client but they give the impression to the clients that they make no money on the deal and fail to advice clients of volume bonus and such. This sort of disclosure will allow all brokers be on the same playing field

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