New Mortgage Services Act Framework to Tighten Rules by 2026
What was announced?
On July 17, 2025 the Ministry of Finance released a draft regulatory package for the Mortgage Services Act (MSA), outlining new licensing tiers, fitness tests and record-keeping rules that will apply to mortgage brokers, administrators and private lenders when the Act comes into force on October 1, 2026 (BC Gov News 2025-07-17). The framework responds directly to anti-money-laundering gaps flagged by the Cullen Commission in 2022.
Key elements
- Stricter licensing tiers: Individuals will need distinct credentials for brokering, lending and administration, each with graduated education requirements.
- Enhanced AML oversight: Firms must adopt risk-based compliance programs and submit suspicious-transaction reports to FINTRAC and the new Financial Services Authority investigations unit.
- Investor disclosure rules: Private mortgage syndicators must provide standardized risk summaries and ensure appraisals are completed by arm’s-length professionals.
- Consumer restitution fund: A new pool, financed by annual licence fees, will cover losses arising from fraud or misconduct up to $100 000 per claimant.
Timeline
The Ministry has opened a 60-day consultation window ending September 15, 2025. Final regulations are expected by spring 2026, with mandatory compliance beginning October 1, 2026.
Why it matters
- Higher professional bar: Real-estate agents who also arrange mortgages will face tougher “fit and proper” tests and continuing-education requirements.
- More transparency: Borrowers will receive plain-language disclosure that itemises fees, rate spreads and conflicts of interest.
- Private-lending scrutiny: Tightened rules around syndicated mortgages—an area that saw $2.8 billion in B.C. transactions last year—could cool the most aggressive high-LTV offerings.
- AML alignment: The Act brings provincial oversight closer to OSFI and FINTRAC standards, appeasing institutional investors eyeing the B.C. market.
Stakeholders should review the draft rules now and budget for compliance upgrades well before the October 2026 go‑live date.
This insight is for informational purposes only and is not legal or financial advice. Always consult qualified professionals before making real‑estate decisions.
What was announced?
On July 17, 2025 the Ministry of Finance released a draft regulatory package for the Mortgage Services Act (MSA), outlining new licensing tiers, fitness tests and record-keeping rules that will apply to mortgage brokers, administrators and private lenders when the Act comes into force on October 1, 2026 (BC Gov News 2025-07-17). The framework responds directly to anti-money-laundering gaps flagged by the Cullen Commission in 2022.
Key elements
- Stricter licensing tiers: Individuals will need distinct credentials for brokering, lending and administration, each with graduated education requirements.
- Enhanced AML oversight: Firms must adopt risk-based compliance programs and submit suspicious-transaction reports to FINTRAC and the new Financial Services Authority investigations unit.
- Investor disclosure rules: Private mortgage syndicators must provide standardized risk summaries and ensure appraisals are completed by arm’s-length professionals.
- Consumer restitution fund: A new pool, financed by annual licence fees, will cover losses arising from fraud or misconduct up to $100 000 per claimant.
Timeline
The Ministry has opened a 60-day consultation window ending September 15, 2025. Final regulations are expected by spring 2026, with mandatory compliance beginning October 1, 2026.
Why it matters
- Higher professional bar: Real-estate agents who also arrange mortgages will face tougher “fit and proper” tests and continuing-education requirements.
- More transparency: Borrowers will receive plain-language disclosure that itemises fees, rate spreads and conflicts of interest.
- Private-lending scrutiny: Tightened rules around syndicated mortgages—an area that saw $2.8 billion in B.C. transactions last year—could cool the most aggressive high-LTV offerings.
- AML alignment: The Act brings provincial oversight closer to OSFI and FINTRAC standards, appeasing institutional investors eyeing the B.C. market.
Stakeholders should review the draft rules now and budget for compliance upgrades well before the October 2026 go‑live date.
This insight is for informational purposes only and is not legal or financial advice. Always consult qualified professionals before making real‑estate decisions.
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