September 2012

September 2012

        
Consumer Credit Division – Mortgage Brokerages, Brokers and Associates 2012 Annual Return – Findings and Regulatory Action

September 27, 2012 – There were a number of annual returns not filed within the required time and as a result regulatory action was taken.  In addition a significant number of annual returns revealed that ongoing notification requirements were not met for the 2012 reporting period.

Licensees must know the requirements imposed upon them by the legislation. Filing an annual return is a mandatory requirement that must be met by licensees on a regularly scheduled basis.  The annual returns are vital to effectively administering the legislation. They provide key information relating to compliance with legislation and identification of potential risks posed to consumers. 

Regulatory Action:

Brokerages and principal brokers that failed to submit their annual return on or before June 30, 2012 received a written demand to pay a special penalty.  This was issued to 5 brokerages and 6 principal brokers.  As a result $3,860 in special penalties was paid.

Brokers and associates that failed to submit their annual return on or before June 30th, 2012 were not charged a special penalty; however in future years regulatory action may be taken. 

2012 Annual Return Findings:

There were several brokerage annual returns that did not provide the errors and omissions insurance policy information for the correct period.  In some instances in the 2012 annual return the policy information was for the upcoming 2013 reporting period.  It is required that that certificate number disclosed in the annual return is for the policy that was in place during the annual return reporting period, which is June 1st to May 31st.

Furthermore, there were a significant number of broker and associate annual returns that revealed ongoing notification requirements were not met for the 2012 reporting period.  Notification requirements include a change in contact information and / or any change in circumstances.  A licensee is required to promptly notify in writing regarding a change.

In the 2012 annual return the most common change that had not been previously reported was a change of phone number, mailing and email address.  It is important that up to date contact information is provided as communications are issued to licensees throughout the year.

To date an administrative penalty for failure to comply with notification requirements has not been charged however going forward regulatory action may be taken.