The Trust and Loan Corporations Act, 1997 (the “T&L Act”) provides the legislative framework for the regulation of loan brokers.
A loan broker is a person (individual, corporation or partnership) that provides services or products to a consumer in obtaining a loan from another person. Services include referring a consumer to a lender, referring a lender to a consumer, or providing a lender or consumer with information about the other.
Persons involved with a loan of money made on the security of real property are not loan brokers. When real property is involved, The Mortgage Brokerages and Mortgage Administrators Act will apply and a licence under this legislation may also be required.
If you are seeking registration as a loan broker, you must:
Loan brokers are prohibited from requiring or accepting any payment from a consumer unless:
Every arrangement or agreement that does not meet these three criteria is void.
The T&L Act contemplates every loan broker, other than those exempted by the Superintendent, as having a bond in the amount and form prescribed by the Superintendent. This information will be communicated to an applicant upon review of the applicant and their proposed business model.