The Financial Services Commission of Ontario is proposing to introduce continuing education requirements for mortgage brokers in Ontario.

Currently, there are no continuing education requirements for mortgage brokers. However, FSCO reports that compliance examinations in the sector over the past couple of years point to a need for ongoing education requirements. FSCO says that it has monitored and audited licensees’ compliance with new proficiency requirements. “The results provide objective evidence that there is a need for mandatory CE,” FSCO says.

“Despite FSCO’s year-long information and outreach campaign, and significantly improved new education standards, FSCO’s audits revealed an unacceptably high level of non-compliance,” a consultation paper issued by FSCO reports. “Of particular concern – only 53% of principal brokers had complied with the legal requirement to file information about their mortgage agents’ education qualifications. In addition, only 70% of mortgage brokerages met the legal requirement to maintain errors and omissions insurance.”

FSCO also found that 80% of mortgage agents with conditional licences completed the required mortgage agent education course by the deadline. In addition, 80% of mortgage brokerages and administrators complied with the requirement to file an annual information return by the deadline.

The regulator says that it believes mandatory CE “is an important component of a complete regulatory scheme that addresses risks and meets FSCO’s consumer protection goals.” By implementing mandatory CE for the mortgage broker sector in Ontario, it hopes to improve the sector’s compliance with current legal requirements by increasing awareness of the rules and the importance of complying with those rules, and to improve consumer protection – without imposing unnecessarily onerous requirements on licensees.

FSCO will be responsible for determining the content of mandatory CE programs and for enforcing licensees’ compliance with CE requirements. It says that the content will address matters that are within FSCO’s consumer protection mandate, not professional development matters, such as sales and marketing. And, it says that the requirements will apply to both new entrants to the industry as well as experienced licensees.

The paper also sets out five principles for FSCO’s proposed CE program. The regulator will not provide CE directly. It will seek to harmonize its requirements with those in other provinces, noting that Alberta was the first province to implement mandatory CE in 2009, and British Columbia plans to implement it in January 2011. FSCO also believes that CE must be readily accessible through the Internet, by correspondence, and perhaps also in a classroom setting. CE programs must be administratively efficient. FSCO will not require licensees to duplicate CE training that they have completed through a professional association, educational institution, other provincial regulator, or commercial education provider.

The regulator is seeking comments on the consultation paper by February 28, and plans to outline its proposals in the spring.

IE