Mortgage Law Reform in British Columbia: The Mortgage Services Act
September 15, 2025
BY Ignacia Mendez
BC’s mortgage regulatory landscape is undergoing a significant overhaul. The Mortgage Services Act (MSA), which was passed in 2022 through Bill 29, will come into force on October 13th 2026, replacing the dated Mortgage Brokers Act (MBA) which has governed the industry since 1972.
Reasons for change
The MSA is part of the province’s broader response to the 2022 Cullen Commission Inquiry into Money Laundering in BC, which highlighted vulnerabilities in BC’s real estate and mortgage sector. The new legislation seeks to modernize the legal framework of the mortgage sector by providing greater consumer protections, stronger oversight, and enhanced accountability for industry participants.
Notable features of the MSA
New licensing regime
One of the most important changes under the MSA is the shift from a registration-based system under the MBA, to a licensing framework. Under the MBA, individuals could register as brokers with limited differentiation in roles or scope of authority. By contrast, the MSA introduces a tiered licensing structure with clearly defined roles: mortgage broker, principal broker, mortgage brokerage, and mortgage lender. Each licence will be tied to specific categories of activity which will ensure that licensees are only authorized to carry out services they are actually qualified for. As for existing licensees, their registration will not carry over, meaning that they will need to go through the new mandatory licensing process.
Expanding scope
The Act introduces a new legal definition of “mortgage services”, which now encompasses:
- Dealing in mortgages;
- Trading in mortgages;
- Mortgage lending; and
- Administering mortgages.
Higher qualification standards
Applicants may be required to meet new education and experience standards and undergo background checks as part of the licensing process. These requirements are intended to ensure that qualified, reputable individuals and entities are permitted to provide mortgage services in BC.
New disciplinary framework
The MSA will grant the BC Financial Services Authority (BCFSA) the power to conduct investigations, hold hearings, and impose penalties. Under the new framework, administrative penalties will be as high as $10,000 while disciplinary penalties may reach $250,000 for individuals and $500,000 for brokerages. This is a substantial increase from the MBA – signalling a stronger punitive approach to compliance. The Act also introduces the role of Superintendent of Mortgage Services, who will be appointed by the BCFSA, and be responsible for providing oversight.
A phased implementation
The BCFSA will lead the transition from the MBA to the MSA and has supplemented a work plan for the 15-month transition period. The purpose of this transitional scheme is to instruct industry participants on the changes and educational material needed to be licensed and provide mortgage services once the MSA comes into force.
Phase 1 – Getting started (July—September 2025)
In July of this year, the provincial government approved the MSA Rules and Regulations, signalling the official start of the transition period. In this initial phase, BCFSA will provide resources for industry such as information newsletters, educational webinars, and the launch of a Mortgage Broker Knowledge Base intended to aid industry members in understanding the new regulatory requirements and related information.
Phase 2 – information and education (October—May 2026)
The second phase is intended to advance the education of industry participants with further webinars, courses, and online resources. While some courses may be optional, all (current and future) industry participants will have to complete the required MSA transition course for their specific license type before they can be registered.
Phase 3 – transition (June—October 2026)
The final phase will prepare the industry for the full transition by requiring brokerages to nominate principal brokers, declare their licensing categories, and complete the new mandatory licensing courses for applicants.
Impact of the MSA
It is the hope of BCFSA that this structural reform of mortgage legislation will strengthen consumer protections in BC’s mortgage marker. By broadening the scope of who must be licensed, tightening qualification requirements, and empowering BCFSA with stronger investigative and disciplinary tools, the MSA is likely to create a more accountable and transparent regulatory ecosystem. This translates into greater confidence for consumers that their broker, lender, or administrator is both qualified and properly supervised. While the transition may seem complex for industry participants, the BC government notes that the results should be a mortgage system that is more secure, transparent, and consumer-focused – which is encouraging news for prospective homebuyers in the province.
