The Financial Services Commission of Ontario is changing the fee structure for mortgage brokers and agents, and it pledges to revamp regulation in the sector.

Effective May 1, FSCO is changing the fees and fee structure. Any mortgage agents with a start date of May 1 or later, are required to pay the new fee. Similarly, mortgage brokers with a registration renewal expiry date of May 1, or later, must pay the new fee, which will be a flat $275 per person. FSCO says that it believes this is more equitable than the current graduated fee of $300 for the first two people and $150 thereafter.

For some brokers, this will represent a reduction in fees. But, overall, it will mean an increase, which FSCO says will allow it to generate sufficient revenues to cover the cost currently associated with the sector.

It says that the change represents an increase of slightly more than 3% compounded, over a 15 year period. Fees haven’t been revised for 15 years in this sector.

“The new fee is in line with fees charged by other professions such as real estate brokers and mutual funds salespersons,” said Grant Swanson, director, Licensing and Compliance Division of FSCO, in a letter to brokers.

Swanson said that costs in general have increased, including the cost of regulation. “Costs incurred at FSCO are driven by many factors, including industry issues,” he said in the letter. “Growth in the industry has resulted in an increase in the resources required to deal with inappropriate actions by people in the industry and by unregistered brokers. Enforcement activity, investigation and prosecution are necessary to ensure public protection and to maintain consumer confidence. This in turn creates a fair and reputable marketplace in which brokers can operate and expand.”

Swanson also noted that FSCO is committed to reviewing and revising the Mortgage Brokers Act. “Brokers have identified areas where the current legislation does not address the issues in this ever growing industry and does not provide adequate regulation of mortgage agents. We at FSCO are aware of these concerns,” he said.