ARCHIVED — Vol. 146, No. 25 — June 23, 2012

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Housing Loan (Insurance, Guarantee and Protection) Regulations

Statutory authority

National Housing Act

Sponsoring department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

For the Regulatory Impact Analysis Statement, see Protection of Residential Mortgage or Hypothecary Insurance Regulations.

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 5(6) (see footnote a) of the National Housing Act (see footnote b), proposes to make the annexed Housing Loan (Insurance, Guarantee and Protection) Regulations.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Jane Pearse, Director, Financial Institutions Division, Department of Finance, L’Esplanade Laurier, East Tower, 15th Floor, 140 O’Connor Street, Ottawa, Ontario K1A 0G5 (tel.: 613-992-1631; fax: 613-943-1334; email: finlegis@fin.gc.ca).

Ottawa, June 19, 2012

JURICA ČAPKUN
Assistant Clerk of the Privy Council

HOUSING LOAN (INSURANCE, GUARANTEE AND PROTECTION) REGULATIONS

INTERPRETATION

Definitions

1. The following definitions apply in these Regulations.

“Act”
« Loi »

“Act” means the National Housing Act.

“housing loan”
« prêt à l’habitation »

“housing loan” has the same meaning as in section 7 of the Act.

DESIGNATION OF APPROVED LENDERS

Designation

2. To be designated as an approved lender for the purposes of Part Ⅰ of the Act, a person must meet the criteria set out in subsection 3(1) and, as applicable, subsections (2) and (3).

General criteria

3. (1) The person must be

  • (a) a corporation whose articles do not restrict its powers to lend in the jurisdictions in which it operates; and

  • (b) one of the following:
    • (i) a financially sound institution with at least $3,000,000 of unencumbered paid-up capital that is incorporated by or under an Act of Parliament or of the legislature of a province,

    • (ii) a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act,

    • (iii) a corporation to which the Trust and Loan Companies Act applies,

    • (iv) an association to which the Cooperative Credit Associations Act applies or a central cooperative credit society for which an order has been made under subsection 473(1) of that Act,

    • (v) an insurance company or fraternal benefit society that is incorporated or formed under the Insurance Companies Act,

    • (vi) a trust, loan or insurance corporation that is incorporated and regulated by or under an Act of the legislature of a province, or

    • (vii) a cooperative credit society that is incorporated and regulated by or under an Act of the legislature of a province.

Criteria for underwriting

(2) To underwrite housing loans, the person must, in addition to meeting the criteria set out in subsection (1),

  • (a) have at least three years’ experience underwriting residential mortgage or hypothecary loans in Canada and the capability and resources to underwrite housing loans and make loan commitments;

  • (b) be a subsidiary of a parent corporation that is an approved lender for the purposes of Part Ⅰ of the Act and that satisfies the criteria set out in paragraph (a), if the parent corporation undertakes to fulfil the task of underwriting housing loans in Canada for the subsidiary and to be accountable to the Corporation for the subsidiary’s performance in relation to those loans; or

  • (c) have paid-up capital of at least $5,000,000 and employ at least two mortgage officers who each have a minimum of ten years’ residential mortgage or hypothecary underwriting experience and who are responsible for underwriting the person’s housing loans in Canada.

Criteria for administering

(3) To administer housing loans, the person must, in addition to meeting the criteria set out in subsection (1),

  • (a) have at least three years’ experience administering residential mortgage or hypothecary loans in Canada and the capability and resources to administer housing loans and meet all insurance conditions;

  • (b) be a subsidiary of a parent corporation that is an approved lender for the purposes of Part Ⅰ of the Act and that satisfies the criteria set out in paragraph (a), if the parent corporation undertakes to fulfil the task of administering housing loans in Canada for the subsidiary and to be accountable to the Corporation for the subsidiary’s performance in relation to those loans; or
  • (c) have paid-up capital of at least $5,000,000 and employ at least two officers who each have a minimum of ten years’ residential mortgage or hypothecary administration experience and who are responsible for administering the person’s housing loans in Canada.

TRANSITIONAL PROVISION

Reduced capital requirement

4. For a period of one year beginning on the day on which these Regulations come into force, the amount of unencumbered paid-up capital required under subparagraph 3(1)(b)(i) is $1,000,000.

COMING INTO FORCE

S.C. 2011, c. 15

5. These Regulations come into force on the first day on which sections 20 and 22 of the Supporting Vulnerable Seniors and Strengthening Canada’s Economy Act are both in force, but if they are registered after that day, they come into force on the day on which they are registered.

[25-1-o]

Footnote a
S.C. 2011, c. 15, s. 22

Footnote b
R.S., c. N-11