How FINTRAC’s New Rules Impact You as a Mortgage Client
As of October 11, 2024, Canadian mortgage brokers will be required to follow new anti-money laundering (AML) and anti-terrorist financing (ATF) regulations. This change means brokers will play a key role in identifying and reporting suspicious financial activities, much like banks and the real estate sector have done for years.
Why Are These Changes Happening?
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) aims to reduce money laundering and terrorist financing in Canada. With these new rules, mortgage brokers will join banks and other financial institutions in ensuring financial security and integrity. This step reflects the government’s broader goal of involving all major financial stakeholders, including independent brokers, to strengthen Canada's anti-money laundering efforts.
What Will Brokers Do Differently?
Brokers will now be responsible for additional tasks such as:
Client Identification: You may be asked to provide extra documentation to confirm your identity, particularly for new applications.
Risk Assessment: Brokers will assess transactions for potential risks, especially for high-value or complex financial situations.
Record-Keeping: Brokers must keep detailed records to comply with FINTRAC’s guideline
Will This Affect the Mortgage Process?
For most clients, the changes will be minimal. However, in certain cases, such as high-value or unusual transactions (e.g., large cash deposits), there may be extra steps or additional documentation requests. Being prepared with ID and proof of income will help keep things smooth.
Will These Rules Increase Costs?
At this point, the changes primarily focus on processes, not fees. There’s no immediate expectation of increased costs, but brokers are working to ensure compliance without adding extra expenses for clients.
Why This Matters for You
These rules ensure that your broker is taking every precaution to maintain high standards and protect your financial transactions. Although most changes happen behind the scenes, they contribute to a more secure and transparent mortgage process.
Final Thoughts
With new responsibilities, your broker is committed to ensuring compliance while keeping the mortgage process seamless for you. If you have any questions about these regulations, your broker is ready to guide you through the process.