Canadian government regulators fined a Mississauga, ON, trust company $1.6 million for failing to disclose a $100 statement fee it charged mortgage customers, according to Blacklock’s Reporter. “Accurate disclosure of fees and costs is fundamental to fairness, honest business practices and the integrity of the financial system,” said Financial Consumer Agency of Canada (FCAC) Commissioner Judith Robertson in a statement. “It serves the dual purpose of allowing customers to make informed financial decisions and provides them with the ability to hold their lenders to account if the event fees are charged inappropriately.”The penalty was five times the amount collected in fees. Evidence showed Community Trust Company (CTC) failed to disclose its $100 statement fee over a 10-year period. One customer complaint in 2021 prompted the FCAC investigation. A total of 3,248 CTC mortgage customers were charged statement fees totalling $341,326. While the financial harm was low, Robertson said the long duration of the violations “elevates the impact of the breaches and supports conclusions regarding the shortcomings of Community Trust Company’s control framework.”She said the Cost of Borrowing Regulations requires all lenders disclose all charges with “no amount of parsing the language.”“The regulations require specific disclosure of discharge fees, that they should be easily identifiable and in any case, must be in language that is clear, simple and not misleading,” she said. From a plain reading of the Trust and Loan Companies Act and regulations around it, Robertson said it is clear there is a high degree of importance placed on the disclosure of all costs related to a credit agreement. “There has been a general provision to disclose all costs since 2001,” she said. “In addition, there are multiple specific provisions of the regulations as well as other relevant provisions to ensure no costs are omitted.”CTC did not issue any statement. It admitted some facts in the case, but it objected to any penalty as unreasonable. This ordeal comes after the Bank of Canada (BOC) signalled on October 25 more interest rate hikes could be on the horizon if inflation keeps rising.READ MORE: TICKING TIME BOMB: Looming mortgage crisis takes shape as renewals come upOne-third of all homeowners face mortgage renewals over the next one to one-and-a-half years, according to a report conducted by Royal LePage. Of those, 74% of mortgage holders with lending agreements report feeling concerned about higher rates.Royal LePage said 3.4 million Canadians have a mortgage set to renew by March 2025. That is when the BOC sees the Canadian economy returning to healthy, sustainable growth.
Canadian government regulators fined a Mississauga, ON, trust company $1.6 million for failing to disclose a $100 statement fee it charged mortgage customers, according to Blacklock’s Reporter. “Accurate disclosure of fees and costs is fundamental to fairness, honest business practices and the integrity of the financial system,” said Financial Consumer Agency of Canada (FCAC) Commissioner Judith Robertson in a statement. “It serves the dual purpose of allowing customers to make informed financial decisions and provides them with the ability to hold their lenders to account if the event fees are charged inappropriately.”The penalty was five times the amount collected in fees. Evidence showed Community Trust Company (CTC) failed to disclose its $100 statement fee over a 10-year period. One customer complaint in 2021 prompted the FCAC investigation. A total of 3,248 CTC mortgage customers were charged statement fees totalling $341,326. While the financial harm was low, Robertson said the long duration of the violations “elevates the impact of the breaches and supports conclusions regarding the shortcomings of Community Trust Company’s control framework.”She said the Cost of Borrowing Regulations requires all lenders disclose all charges with “no amount of parsing the language.”“The regulations require specific disclosure of discharge fees, that they should be easily identifiable and in any case, must be in language that is clear, simple and not misleading,” she said. From a plain reading of the Trust and Loan Companies Act and regulations around it, Robertson said it is clear there is a high degree of importance placed on the disclosure of all costs related to a credit agreement. “There has been a general provision to disclose all costs since 2001,” she said. “In addition, there are multiple specific provisions of the regulations as well as other relevant provisions to ensure no costs are omitted.”CTC did not issue any statement. It admitted some facts in the case, but it objected to any penalty as unreasonable. This ordeal comes after the Bank of Canada (BOC) signalled on October 25 more interest rate hikes could be on the horizon if inflation keeps rising.READ MORE: TICKING TIME BOMB: Looming mortgage crisis takes shape as renewals come upOne-third of all homeowners face mortgage renewals over the next one to one-and-a-half years, according to a report conducted by Royal LePage. Of those, 74% of mortgage holders with lending agreements report feeling concerned about higher rates.Royal LePage said 3.4 million Canadians have a mortgage set to renew by March 2025. That is when the BOC sees the Canadian economy returning to healthy, sustainable growth.
