The new Mortgage Services Act imposes tighter compliance and new mortgage licensing categories
Mortgage brokers across British Columbia are preparing for the most sweeping regulatory update in the industry in half a century, as the province transitions to the new Mortgage Services Act (MSA), set to replace the outdated Mortgage Brokers Act (MBA) in October 2026.
The BC government has officially approved the rules and regulations accompanying the MSA, kicking off a 15-month transition period that aims to overhaul mortgage regulation in the province. The MSA introduces new standards focused on consumer protection, anti-money laundering enforcement, and increased accountability for mortgage professionals.
“The new framework for the Mortgage Services Act raises standards across the mortgage industry, improves accountability and helps protect both home buyers and lenders, while supporting efforts to crack down on money laundering,” said minister offFinance Brenda Bailey.
New licensing model and higher standards
The new framework introduces four categories of licensing: dealing in mortgages, trading in mortgages, administering mortgages, and mortgage lending. These categories will replace the single licensing structure under the MBA. The MSA also strengthens disclosure and suitability standards while arming the BC Financial Services Authority (BCFSA) with broader enforcement tools.
“The mortgage market has changed dramatically in the 50 years since the Mortgage Brokers Act was passed,” said Tolga Yalkin, CEO and chief statutory officer of the BCFSA. “It is larger, more complex and operates at a much faster pace. The Mortgage Services Act will reflect the realities of today’s market to address current risks and will be adaptable to address emerging ones to ensure we can better protect everyone involved.”
The updated regulations are a direct response to the findings of the Cullen Commission, which highlighted gaps in B.C.’s mortgage brokering oversight, particularly around income-document fraud and real estate’s role in money laundering. BCFSA will now have enhanced powers to investigate, license, and monitor industry players more effectively.
Read more: B.C. regulator expands crackdown on mortgage fraud
Timeline and transition plan
The MSA received Royal Assent in November 2022. The act is scheduled to come into force on Oct. 13, 2026, giving the industry a 15-month transition window.
There are more than 7,000 licensed mortgage professionals in BC who will be affected. During the transition, BCFSA is encouraging mortgage customers to continue using its “Find a Mortgage Broker” tool to verify broker registration status.
BCFSA will also publish educational materials, guidance documents, and host information sessions to support the process. Mortgage professionals will be required to complete transitional activities, including mandatory education courses, to remain in compliance.
“As we move forward with implementing these changes, we’re committed to listening closely to those working in the mortgage industry,” said Yalkin. “We know this is a big change, and we don’t expect the industry to adapt overnight.
“That’s why we’re taking a careful approach and offering support every step of the way – to help mortgage brokers adjust and to make sure the transition works well for everyone.”
Additionally, the MSA is also intended to align closely with other provincial financial services laws, such as the Real Estate Services Act, to streamline regulation and reinforce responsible business conduct.
Mortgage industry reacts
Industry groups have largely welcomed the reform. Lauren van den Berg, president and CEO of Mortgage Professionals Canada, said the organization supports the overhaul, particularly efforts to combat income-document fraud and money laundering.
“We, as an industry, are in strong support of enhancing consumer protection and combating fraud in the real-estate sector, including income-document fraud and money laundering,” she said in a statement. “This has been one of our top advocacy issues not just in British Columbia, but at a national level.”
Rebecca Casey, president of the Canadian Mortgage Brokers Association - BC, added: “We look forward to reviewing the final details of the new Mortgage Services Act's rules and regulations, and emphasize the importance of modernizing the regulatory framework to reflect today’s housing and lending environment.”
Make sure to get all the latest news to your inbox on Canada’s mortgage and housing markets by signing up for our free daily newsletter here.
