Mr. Speaker, the Financial Consumer Agency of Canada, or FCAC, protects Canadians by supervising the compliance of federally regulated financial entities, such as banks, with their legislative obligations, codes of conduct and public commitments, and by strengthening Canadians’ financial literacy.
In response to the current economic environment, FCAC developed the Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances, which can be found at https://www.canada.ca/en/financial-consumer-agency/services/industry/commissioner-guidance/mortgage-loans-exceptional-circumstances.html. The Guideline sets out how FCAC expects federally regulated financial institutions to provide tailored support to consumers with mortgages on their principal residence who are experiencing severe financial difficulty.
Guidelines establish practices that FCAC expects regulated entities to incorporate within their business operations. They are intended to assist regulated entities in complying with market conduct obligations stemming from legislation, regulations, codes of conduct and public commitments.
With regard to (a), consultations are part of FCAC’s standard practice in developing guidelines. FCAC launched public consultations on the proposed Guideline on March 21, 2023, and received comments until the close of the consultation period on May 5, 2023.
FCAC participated in 13 stakeholder engagements and received 36 written submissions from stakeholders, including members of the public, consumer advocacy groups, academics, financial institutions, and industry associations.
Industry-specific consultations took place via engagements with the Canadian Bankers Association, or CBA, representing a wide range of Schedule I, Schedule II, and Schedule III banks, namely Member banks, which are listed at https://cba.ca/member-banks?l=en-us, the Canadian Credit Union Association, or CCUA, for Canada’s credit unions, and some caisses populaires.
With regard to (b), four of the 36 written submissions received from stakeholders were submitted by financial institutions or their respective trade associations (the CBA and the CCUA). FCAC’s “What we heard: Public consultation on the Guideline on Existing Consumer Mortgage Loans in Exceptional Circumstances”, which can be found at https://www.canada.ca/en/financial-consumer-agency/corporate/transparency/consultations/mortgage-loans/what-we-heard.html, provides an anonymized summary of all the comments received during the public consultations and indicates how FCAC addressed this input.
With regard to (c), this part is not applicable given the response to (a).
With regard to (d), since the Guideline’s implementation, financial institutions raised some of the following concerns with FCAC through regulatory supervisory touchpoints: consistency of guidelines and the consistent interpretation of those guidelines, timelines for the update of systems, how to define and identify consumer at risk, and more.
With regard to (e), the guideline is a response to the current exceptional circumstances facing mortgage holders. FCAC will continue to monitor the economic environment and adjust its approach, as appropriate.