A financial regulator has fined the Bank of Montreal $200,000 for committing three violations relating to its home-equity line of credit products.
The Financial Consumer Agency of Canada (FCAC), which regulates financial institutions, said the bank failed to disclose certain information that was required to be disclosed under the cost of borrowing regulations. The bank also failed to meet requirements about the format in which the information was to be disclosed, such as the font style and size.
Home-equity lines of credit, or HELOCs, allow people to borrow against the equity that they have in their homes at attractive rates, which has made them a key source of household credit for Canadians. However, a recent report from credit-monitoring firm TransUnion Canada suggests that tighter mortgage rules have slowed the market for HELOCs.
The FCAC made its decision on August 24 but only published it on Thursday. The agency said in an e-mail that the delay occurred because it must complete “various administrative processes” before publication.
BMO has been in breach of the rules since Jan. 1, 2010, the FCAC said in a statement.
An estimated 136,075 customers were impacted between January, 2010, and December, 2016.
A BMO spokesperson said there was no financial harm to its customers as a result of the disclosure issue.
“We take our legal and regulatory responsibilities very seriously and have provided our customers with updated cost of borrowing information,” BMO said in a statement.
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