Compliance and regulatory requirements can be burdensome, but a top Ontario broker says more professionalism in the industry is a good thing
Ontario mortgage brokers have faced regulatory scrutiny and new licensing requirements in recent years as the province’s mortgage industry watchdog doubles down on protecting consumers.
But higher accountability and regulation in the broker space is a good thing for the profession in the eyes of many seasoned brokers, even despite occasional challenges keeping up to speed with compliance while running a brokerage.
Last year, top brokers hit out at mortgage agent standards in Ontario and said the Financial Services Regulatory Authority (FSRA) was correct to raise the bar for qualification as an agent and broker.
And the regulator’s educational and compliance standards have won support at the beginning of 2026 as it renews its focus on agents and brokers transacting in the private and alternative mortgage spaces.
“Overall, I think Ontario’s regulatory framework is appropriate, and in many ways necessary,” Carmen Costa (pictured top), principal broker and owner at TCG Lending Centres, told Canadian Mortgage Professional. “Mortgage brokers deal with complex products that can have long-term financial consequences for consumers, so strong oversight is important.
“That said, the rules have become more demanding from an operational standpoint, especially for smaller brokerages. The intent is right – consumer protection – but the volume of compliance, documentation, and supervision required can be challenging to manage alongside day-to-day business.”
Towards the end of 2025, FSRA confirmed that monitoring private mortgage space would remain one of its core priorities for the year ahead, continuing a focus that’s been in place amid the sector’s rapid growth during the 2020s.
That’s the right move, according to Costa. “I think regulators should continue to focus heavily on private and alternative lending, where the risk to consumers is highest,” she said. “Borrowers need to clearly understand fees, interest rates, exit strategies, and what happens if they can’t refinance or sell.
“I’d also like to see more emphasis on the quality of disclosure, not just whether a form was signed. Making sure clients truly understand what they’re agreeing to is more important than simply checking a compliance box.”
FINTRAC changes continue to pose challenges
Across Canada, new anti-money laundering and anti-terrorist financing requirements came into effect for mortgage administrators, brokers and lenders in October 2024, monitored by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
Those included a swathe of new responsibilities centred around implementing compliance programs, meeting Know Your Client (KYC) requirements, reporting transactions, keeping records, and applying ministerial directives.
The changes sparked a scramble by many brokerages to get their systems up to speed with new expectations, and Costa said they had proven a “significant challenge” for plenty in the mortgage industry.
“The requirements are detailed and highly process-driven, and many brokers were not previously set up with full AML programs,” she said. “In our case, we implemented our FINTRAC compliance framework ahead of the deadline, which allowed us to identify and work through potential issues early rather than reacting under pressure.”
The biggest challenges for brokerages under that new framework? Client identification, beneficial ownership verification, PEP checks, and maintaining consistent documentation, according to Costa.
“It’s not that brokers are unwilling to comply,” she said. “The reality is that the learning curve and administrative workload are substantial, particularly during the transition period.”
‘Higher professionalism is a positive thing’
While some brokers may view their regulatory and compliance obligations as excessive, Costa said those requirements will ultimately benefit the profession overall and help boost the reputation of agents and brokers across the province.
For those who operate in the right way and with their clients’ best interests at heart, she added, the rules are nothing to worry about – even if a few tweaks would go a long way.
“Overall, I think regulation in Ontario is moving the industry toward higher professionalism, which is a positive thing,” she said. “Brokers who operate ethically and put clients first benefit from clearer standards.
“What would help most is continued guidance from regulators in the form of practical examples – what good compliance actually looks like in real mortgage files. Clear expectations make it easier for brokerages to comply while still serving clients effectively.”
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