The letter, which was sent to MortgageBrokerNews.ca by a FICOM representative, explains its proposed plan to require brokers to disclose, in dollar terms, commission and volume bonuses earned on deals, as well as other rewards the broker may earn from the lender.
It also explains the reasoning behind the additional disclosure requirements.
“A declaration that the broker is paid by a lender does not go far enough in describing, in a meaningful way, the interests that the broker and related parties receive from the transaction,” FICOM writes in the letter. “It masks the nature of those interests and keeps them hidden from the consumer.”
FICOM explains that the changes are a pre-emptive measure.
“FICOM's primary job is to anticipate risks and take action before they can become problems for the public and the economic well-being of the province,” FICOM writes. “We take that assignment seriously.”
FICOM says it has not yet scheduled an implementation date.
FICOM has also invited industry stakeholders to contact it directly at firstname.lastname@example.org
to share their input by February 20.
To read the letter in its entirety, click here
The B.C. regulator has released an open letter to the industry, outlining its plans for future compensation disclosure while also inviting further broker comment prior to implementation.