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· 4 min read

Bill C‑2—also known as the Strong Borders Act—will have a major impact on mortgage lending in Canada and the professionals who operate in that sphere: brokers, agents, lenders, and brokerages.

1. All mortgage-industry players become reporting entities​

Currently, many mortgage lenders, administrators, brokers, and agents fall under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), but are not required to enroll with FINTRAC. Bill C‑2 changes that: all must now enroll with FINTRAC, renew periodically, and notify the agency of changes—or face revoked enrollment (McCarthy).

2. Stronger AML compliance expectations​

Mortgage professionals must now implement AML programs that are "reasonably designed, risk-based and effective." Non-compliance classifies as a "very serious" violation, damaging both reputation and finances (McCarthy).

3. Steep new penalties​

Penalties for AML lapses will be 40× higher:

  • Minor violations – up to C$40,000

  • Serious – up to C$4 million

  • Very serious – up to C$20 million

And penalties may be cumulative: up to 3% of global revenue if that amount is larger (Blakes, McCarthy).

4. Mandatory compliance agreements & orders​

Entities hitting any violation must enter into a binding compliance agreement with FINTRAC. Refusal or failure leads to mandatory public orders and fresh penalties—up to C$30 million or 3% of global revenue (Blakes).

5. Ban on large cash transactions​

Bill C‑2 prohibits cash payments, donations or third‑party cash deposits of C$10,000 or more, unless regulated exemption applies. This largely prohibits mortgage brokers or lenders from accepting cash for business purposes (McCarthy).

6. Expanded information sharing​

FINTRAC will have greater power to share AML-related data—not just with other financial regulators but potentially with election authorities—enhancing oversight over mortgage-sector compliance (McCarthy).

What this means for mortgage brokers, agents, and brokerages:​

ChangeImpact
Mandatory enrollment & reportingMust register with FINTRAC, renew regularly, and disclose corporate changes
Enhanced compliance programsNeed documented, audited AML systems, risk assessments, & staff training
Huge new financial penaltiesEven small AML failures could trigger fines up to C$20 million
Compliance agreements & publicityViolations can lead to legally binding orders and public naming
Cash restrictionsCash deals above C$10,000 will generally be banned
Increased regulatory scrutinyMore likely to be examined, both through FINTRAC & shared agency investigations

Summary​

Mortgage sector professionals must now elevate their AML compliance to a much higher standard. This includes mandatory FINTRAC registration, robust programs and controls, avoidance of large cash transactions, and readiness for significant penalties and public scrutiny if compliance fails.

If you're a mortgage broker, agent, lender, or administrator, it's time to:

  1. Enroll with FINTRAC (if not already done) and institute a renewal process.

  2. Upgrade compliance programs, including risk assessments, staff training, and audits.

  3. Cease high-value cash dealings—ensure all transactions are digital or traceable.

  4. Prepare for audits and orders—with legal counsel and remediation processes in place.

How Athenty Can Help​

In this new regulatory landscape, robust identity verification and KYC processes are more critical than ever. Athenty's Smart IDV and KYC services provide mortgage professionals with the tools they need to meet enhanced AML compliance requirements:

  • Automated Identity Verification: Ensure all clients are properly verified before any transactions
  • Risk-Based Screening: Implement the "reasonably designed, risk-based and effective" AML programs required by Bill C-2
  • Audit Trail Documentation: Maintain comprehensive records for FINTRAC reporting and compliance agreements
  • Real-Time Compliance Checks: Stay ahead of regulatory requirements with continuous monitoring

Don't wait for penalties to hit—strengthen your compliance posture today with Athenty's comprehensive verification solutions.

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