Federal AML rules – As many now know, the federal government has now published new amending regulations to federal anti-money laundering legislation (the Proceeds of Crime (Money Laundering) and Terrorist Financing Act – PCMLTFA). The new regulations impose a broad set of compliance requirements on mortgage lenders, brokers and administrators, which encompass (amongst other requirements) the need for the sector to:
- develop and implement a comprehensive compliance program;
- perform risk assessments;
- develop staff training programs; and
- maintain records.
- Mortgage lenders, in particular, will need to explore and document a borrower’s financial capacity.
The proposed regulations for comment can be found at this link . The comment period closes on March 20, 2023.
The challenge that we see for many mortgage lenders is that the broad capture of “mortgage lenders” as reporting entities, appears to include all mortgage lenders, regardless of their sophistication, licensing status, structure or even their level of activity in performing lending services. Passive investors, who simply provide funds to borrowers secured by mortgages yet do not engage in any underwriting and casual mortgage lenders are caught in the definition – these persons act more as clients than active industry participants. Unlike other captured reporting sectors, the act of mortgage lending can be a common activity engaged in by non-professionals, such as friends and family members. The definition does NOT exclude those non-professional participant lenders who will not have the knowledge, resources or capacity to comply with complex AML requirements. We urge you to provide comments to the government or CAPL on this significant new requirement.
A comprehensive review of Alberta mortgage broker and other sector rules – the Real Estate Council of Alberta is currently inviting feedback from industry members on a broad, multi-sector consultation, and inviting comments on:
- rules applicable to mortgage brokerages;
- practice standards;
- forms, including disclosure forms,
- E and O insurance requirements;
- licensing structures;
- document storage;
- referral payments and commissions; and
- rule harmonization with other provinces.
The consultation document can be found here https://www.reca.ca/about-reca/legislation-standards/industry-and-government-consultations/
