Effective this January 2014, trust and loan companies subject to
the federal Trust and Loan Companies Act (Canada)
("Trust and Loan Companies") and retail associations
subject to the federal Cooperative Credit Associations Act
(Canada) (together with Trust and Loan Companies, the "Filing
Entities"), will be required to submit a Report on New
Lending (A4) (a "Report") to the Bank of Canada on a
monthly basis. Prior to January 2014, only banks listed in Schedule
I and II of the Bank Act (Canada) and authorized foreign
banks (those which are the subject of an order under subsection
524(1) of the Bank Act (Canada)) (collectively,
"Banks") were required to complete a Report.
In its Report, each of the Filing Entities must disclose new
lending booked in Canada on selected asset categories to: (i)
Canadian businesses and (ii) Canadians for non-business purposes.
Filing Entities must disclose the value of the interest rates
charged and funds advanced, as well as provide a weighted average
of interest rates on funds advanced. If an institution has no new
lending to report, it is necessary that it submit a nil return as
its Report. All Reports are required to be submitted within 30 days
of month end. Of note, Trust and Loan Companies that are
subsidiaries of Banks or other Trust and Loan Companies will
continue to be excepted from this filing requirement.
The selected asset categories to be disclosed in the Report with
respect to Canadian individuals (for non-business purposes) include
new funds advanced to:
a. Personal loan plans;
b. Secured personal lines of credit;
c. Unsecured personal lines of credit;
d. Other personal;
e. Insured residential mortgages; and
f. Uninsured residential mortgages.
In addition, the selected asset categories to be disclosed in
the Report with respect to Canadian businesses include new funds
a. Regulated non-bank financial institutions;
b. Lease receivables;
c. Loans to individuals and others for business purposes;
d. Non-residential mortgages.
The underlying policy intention of extending reporting
requirements to the Filing Entities is to provide a more
comprehensive view of the lending activities by federally-regulated
institutions. The information contained in Reports will be used by
the Bank of Canada to monitor and analyze the cost of borrowing as
a result of adjustments in monetary policy on the cost of
borrowing. The information submitted in a Report will not be made
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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