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The federal government has announced further restrictions that will make it more difficult for some borrowers to get mortgage loans and make it more costly for foreigners to speculate in the real estate market. Under current rules, a federally regulated mortgage lender may not make a loan on the security of a residential property if the value of the loan exceeds 80% of the value of the property, unless the loan is insured by an…
On September 15th, the Financial Action Task Force (FATF) released its Mutual Evaluation Report (Report) of Canada’s measures for combatting anti-money laundering (AML) and the financing of terrorism (CFT).  FATF is an international organization originally formed by the G-7 countries in 1989.  FATF has developed 40 Recommendations for measures that countries should take to combat money laundering.  Part of its mandate is to conduct peer reviews of the progress being made by its members in…
On September 16th, the Department of Finance announced the launch of a public consultation on the deposit insurance regime for banks, federally regulated trust and loan companies and certain provincially regulated institutions.  There is no indication when the Government proposes to complete its review but comments are requested by November 30th. The Consultation Paper states that the Government is generally comfortable with the current limit on deposit insurance ($100,000), and how deposit insurance works.  However,…
On August 26th, the federal Department of Finance launched a review of the legislation governing banks, insurance companies and trust companies under federal jurisdiction by issuing an initial consultation paper. The initial paper sets out some key facts relating to the sector and comments on trends that are currently impacting and are expected to continue to impact the sector. The paper concludes by inviting comment on certain high level policy questions. As most financial…
The high-paced growth of residential home prices, particularly in the Vancouver and Toronto markets, is continuing to generate concern both from the Bank of Canada and the Office of the Superintendent of Financial Institutions (OSFI). In its semi-annual Financial System Review, released on June 6th, the Bank noted that the vulnerability of the financial sector continues to rise due in part to strong mortgage credit growth and rapidly increasing home values in some regions.…
Since July 2015, when draft amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (Draft Regulations) were published in the Canada Gazette, the industry has been expecting changes to aspects of the current AML/TF regime, particularly with respect to customer identification. After a lengthy delay, caused at least in part by the change in government, FinTRAC signaled the imminent arrival of the updated rules by releasing a new guideline on its website…
On May 19, 2016, the Competition Bureau of Canada (the Bureau) launched a market study FinTech in Canada.  The Bureau enforces and administers the Competition Act (Canada) and as part of its mandate participates in activities to promote a competitive marketplace. The purpose of the study, as described by the Bureau, is to advise and guide financial sector regulators and other relevant authorities on how to ensure that regulation does not unnecessarily impede competition in…
On May 2, 2016, the Bank of Canada designated the Automated Clearing and Settlement System (ACSS) operated by the Canadian Payments Association as a system that has the potential to pose payment system risk (a Prominent Payment System). This designation means that the ACCS will now be overseen by the Bank of Canada in accordance with the provisions of the Payment Clearing and Settlement Act (Canada). Background The ACSS is the system through which the…
On April 20th, the Federal Government introduced legislation to implement a bail-in regime for domestic systemically important banks (D-SIB). The regime is intended to reduce the likelihood that one of these banks would require a government bail-out in the event that the bank experienced significant losses. The Office of the Superintendent of Financial Institutions (OSFI) had previously designated the six largest banks in Canada, Bank of Montreal, Bank of Nova Scotia, Canadian Imperial Bank of…
In my blog post of April 14th, I discussed what I referred to as the curious case of the penalty that Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) had imposed on a bank. On April 17th, FINTRAC called with some information relevant to both the contents of my post and of some of the press reports that had addressed the case.  As I found the information to be informative, I thought that I…