The registry could be implemented as early as next year
Amid steady growth in the private lending sector, Ontario has announced that it is considering the implementation of a registry for industry players.
“Because these lenders are unregulated, governments have no clear line of sight on their activities and may not know the extent of their market participation,” according to a report by the province’s Ministry of Finance. “This has resulted in a lack of understanding of the level of financial risk in the private lending sector.”
The government is aiming for a 2020 launch of the registry, Parliamentary Assistant to the Minister of Finance Stan Cho told the Financial Post.
“We spoke to non-private and private lenders,” Cho stated. “And really it’s something that the industry overall wants, because it is a growing sector of the market and it’s something that is here to stay.”
The private lending market represented $10.6 billion (around 8%) of the total dollar value of all mortgage transactions reported across Ontario in 2017, up from $6 billion in 2014.
Such a registry would help shore up the province against the worst effects of real estate fraud and money laundering – as well as provide valuable data to the Financial Services Regulatory Authority of Ontario.
“During the review, many stakeholders noted that private/unregulated lending should not be restricted, but could be better understood or quantified,” the report said. “As such, it is our recommendation that the Ministry of Finance work with FSRA to create a registration regime for private/unregulated lenders that meet certain monetary or activity thresholds.”
“This would make Ontario the only jurisdiction in Canada to directly collect data from unregulated mortgage lenders, facilitating a better understanding of these lenders’ participation in Ontario’s housing markets and their broader role in the provincial economy.”
