An Act to amend the Interest Act (prepayment charge)

Sponsor

Guy Caron  NDP

Introduced as a private member’s bill. (These don’t often become law.)

Status

Introduced, as of June 14, 2019

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Summary

This is from the published bill. The Library of Parliament often publishes better independent summaries.

First Session, Forty-second Parliament,

64-65-66-67-68 Elizabeth II, 2015-2016-2017-2018-2019

HOUSE OF COMMONS OF CANADA

BILL C-459

An Act to amend the Interest Act (prepayment charge)

FIRST READING, June 14, 2019

Mr. Caron

421610

SUMMARY

This enactment amends the Interest Act in order to set out the maximum charge that a lender can exact for prepayment of a loan secured by a first mortgage or hypothec on property that is used as a primary residence.

It also sets out the circumstances in which such a charge must not be exacted.

Elsewhere

All sorts of information on this bill is available at LEGISinfo, provided by the Library of Parliament. You can also read the full text of the bill.

Interest ActRoutine Proceedings

June 14th, 2019 / 12:20 p.m.
See context

NDP

Guy Caron NDP Rimouski-Neigette—Témiscouata—Les Basques, QC

moved for leave to introduce Bill C-459, An Act to amend the Interest Act (prepayment charge).

Mr. Speaker, I am pleased to introduce this bill, which is inspired by a bill that was tabled in the last Parliament by my then colleague Laurin Liu, who was the member for Rivière-des-Mille-Îles.

Breaking a mortgage contract before it comes to term triggers significant penalties. For example, if a couple signs up for a five-year mortgage to buy a $300,000 house and then gets a divorce after three years, the penalty they would be charged for the forced sale of the house could be as high as $9,000. These fees are widely panned, and they are the number one source of complaints to Canada's Ombudsman for Banking Services and Investments.

This bill will limit the penalty for breaking a mortgage early to six months' worth of interest. If anyone thinks this bill sounds a little extreme, I would point out that these fees have been banned in the United States. We believe that this is a necessary measure for protecting mortgage holders who unfortunately need to break their mortgage early, rather than letting the big banking firms pocket these fees. The bill would put an end to this exploitation.

(Motions deemed adopted, bill read the first time and printed)