Mortgage Industry Now Subject to New FINTRAC Obligations Image

Mortgage Industry Now Subject to New FINTRAC Obligations

By Christina Crowe | October 21, 2024

In our July blog post and Regulator newsletter, we discussed the new FINTRAC obligations that would come into force this October. That time has come and we want to ensure all RECA mortgage licensees are aware of their new obligations under this federal legislation.

Background

In October 2023, the Government of Canada published new regulations in the Canada Gazette, Part II (Volume 157, Number 21) to further support Canada’s efforts to combat money laundering  and terrorist activity financing , and strengthen Financial Transactions and Reports Analysis Centre of Canada’s (FINTRAC) ability to contribute to the protection of Canadians and Canada’s economy.

FINTRAC has now updated its guidance following regulatory amendments that came into force on October 11, 2024.

New obligations for the mortgage industry

As of October 11, 2024, businesses and professionals in the mortgage sector, specifically mortgage administrators, brokers and lenders, have anti-money laundering and anti-terrorist financing (AML/ATF) obligations, as follows:

  • developing an AML/ATF compliance program;
  • applying customer due diligence measures;
  • keeping certain records;
  • report certain transactions to FINTRAC; and
  • following ministerial directives and transaction restrictions.

FINTRAC describes the compliance obligations in its sector-specific guidance for mortgage administrators, brokers and lenders. FINTRAC also launched a tool to help businesses involved in the mortgage sector determine if they have obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations as of October 11, 2024. Consult:  Self-Assessment Tool for Mortgage Sector.

Submit reports to FINTRAC

Licensees in RECA’s mortgage sector are now required to submit suspicious transaction reports (STR), terrorist property reports (TPR), large cash transaction reports (LCTR) and large virtual currency transaction reports (LVCTR) to FINTRAC.

Reporting entities with reports to submit can send requests for access to the FINTRAC Web Reporting System by email to F2R@fintrac-canafe.gc.ca. Once enrolled, they will be able to submit STRs using the FINTRAC Web Reporting System or, if they have a higher volume of reports, register to FINTRAC API report submission to submit STRs, LCTRs and LVCTRs.

Backlogs of reports incurred as a result of the availability of FINTRAC systems must be maintained by the reporting entity and reported to FINTRAC once they obtain access to FINTRAC Web Reporting System and the report type is available in the system. For more information visit: Implementing online systems.

For questions, please contact FINTRAC at 1-866-346-8722 (toll-free) or lignesdirectrices@fintrac-canafe.gc.ca.

RECA licensees are encouraged to stay up-to-date on FINTRAC information by subscribing to the FINTRAC Mailing List