The regulatory landscape for mortgage services in British Columbia is about to change significantly…

The new legislation forms part of the Province’s broader effort to strengthen oversight of the financial services sector and improve consumer protection. The MSA was developed in response to recommendations arising from the Cullen Commission of Inquiry into Money Laundering in B.C., which recommended enhanced oversight of mortgage industry participants as part of broader efforts to address money laundering and strengthen consumer protection.  

Following receiving Royal Assent in 2022, the Province approved the rules and regulations accompanying the MSA in July 2025 and provided a 15-month transition period to allow industry participants to prepare for implementation.

This transition period ends on October 13, 2026.

What Is The New Regulatory Framework ?

One of the most significant changes introduced by the MSA is the transition from the MBA’s registration regime to a more comprehensive licensing framework governing mortgage services across the Province.  

The MSA establishes three licence levels:

• mortgage brokerage;

• principal broker; and

• mortgage broker.

In addition, licensees must be licensed in one or more mortgage services categories, including:

• dealing in mortgages;

• trading in mortgages;

• administering mortgages; and

• mortgage lending.

The MSA introduces a new statutory definition of “mortgage services,” encompassing the foregoing four categories of activity. By expanding the scope of regulated activities beyond the traditional mortgage broker model, the legislation provides a broader framework for regulating participants in the mortgage services industry.  

Expanded Powers for the BC Financial Services Authority

The MSA significantly expands the authority of the BC Financial Services Authority (the “BCFSA”) and introduces the role of “Superintendent of Mortgage Services”.

The BCFSA is now empowered to establish licensing requirements and qualifications, impose standards of conduct and business practices, enhance reporting and disclosure obligations, conduct investigations, initiate disciplinary proceedings, and create rules governing such mortgage services activities.

The legislation is intended to provide regulators with greater flexibility to respond to developments in the mortgage and financial services industries, while improving consumer protection and regulatory oversight.

Increased Compliance Obligations

The MSA introduces new obligations for many participants in the mortgage services industry.

Mortgage brokerages must designate a principal broker responsible for overseeing the brokerage’s mortgage business and supervising licensed mortgage brokers associated with the brokerage. The legislation also introduces enhanced suitability requirements, recordkeeping obligations, and standards of conduct for licensees.

In addition, current mortgage broker registrants were required to complete mandatory transition education as part of the transition into the new licensing regime.

The MSA also introduces additional compliance expectations, including obligations relating to identity verification and the reporting of suspected fraud or illegal activity.  

Significantly Higher Penalties

The MSA substantially strengthens the enforcement framework governing mortgage services in British Columbia.

Administrative penalties may reach $100,000 in certain circumstances, while disciplinary penalties may be as high as $500,000. In some cases, individuals and corporations may face fines of up to $2.5 million for offences which fall under the new legislation.

These penalties represent a significant increase from those available under the MBA and underscore the Province’s intention to strengthen compliance and accountability within the mortgage services sector.

What Are the New Licensing Risks for Private and Repeat Lenders

One of the most significant practical changes introduced by the MSA is the shift away from certain registration triggers that existed under the MBA.

Under the MBA, a person could be considered a mortgage broker in a number of circumstances, including where the person lent money on the security of 10 or more mortgages during a year. The MSA does not contain an equivalent transaction-based threshold. Instead, licensing requirements under the MSA depend on whether a person is providing mortgage services and whether any applicable exemptions apply.   

As a result, private lenders and other market participants should not assume that licensing obligations arise only after a certain number of transactions have been completed or another threshold has been met. Whether a licence is required will depend on the nature of the activities being carried on and the availability of any applicable statutory or regulatory exemption. Those who regularly lend funds secured by real property, repeatedly participate in mortgage lending transactions, or otherwise hold themselves out as mortgage lenders should consider whether licensing may be required under the new regime. Given the expanded enforcement powers available to the BCFSA and the significant penalties for non-compliance, obtaining advice regarding licensing requirements may be prudent where uncertainty exists.

Practical Implications for Industry Participants

The implementation of the MSA marks the most significant overhaul of mortgage services regulation in British Columbia in recent decades.

Mortgage brokerages, mortgage brokers, mortgage administrators and lenders should all review their operations and compliance programs to ensure that they are prepared for the new regulatory framework. Particular attention should be given to:

• licensing requirements and licence status;

• principal broker responsibilities;

• recordkeeping and disclosure obligations;

• anti-money laundering procedures;

• standards of conduct and regulatory compliance policies; and

• future guidance issued by the BCFSA.

Organizations that rely on third-party mortgage service providers should also consider whether such providers are appropriately licensed and prepared to operate under the new regime.

Looking Ahead

The coming into force of the MSA represents a significant shift in the regulation of mortgage services in British Columbia. While many aspects of the new framework are now settled, additional guidance can be expected as the BCFSA continues to implement and administer the new regime.

Mortgage industry participants should remain attentive to future developments and take proactive steps to ensure ongoing compliance with their obligations under the MSA.

If you have any questions regarding new Mortgage Services Act, please contact Elias Notopoulos, Anny Kim, or another member of our Business Law Group.

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Disclaimer: This content is provided solely for informational purposes and is not intended for use in any legal proceeding. You should consult a qualified lawyer for advice tailored to your specific circumstances.