New filing requirements for trust and loan companies 


April 2013

Financial Services Bulletin

The Office of the Superintendent of Financial Institutions ("OSFI") yesterday issued a communiqué indicating that, effective July 2013, OSFI will require all federally-regulated Trust and Loan Companies and Retail Associations to submit the Report on New Lending (A4).

Effective as of July, 2013, all Trust and Loan Companies and Retail Associations will be required to submit the report to the Bank of Canada on a monthly basis, within 30 days of the end of each month. The purpose of the return, previously only required of banks and foreign bank branches, is to provide the Bank of Canada with information on the interest rates charged and funds advanced by the institutions for new Canadian-dollar loans booked in Canada to Canadian individuals and businesses.

In the return, institutions are required to provide weighted averages of the interest rates charged and cumulative totals of the funds advanced in the month, including new draws on existing facilities as well as renewals and refinancings, broken down across a number of categories of personal and business loans. Credit card lending is not reported in the return. Even those institutions with no new lending activity to report in a given month must file a nil return. The information provided by the institutions in the monthly return is not published.

In extending the reporting requirements to also apply to Trust and Loan Companies and Retail Associations, the Bank of Canada hopes to gain a more comprehensive picture of lending activities in Canada by regulated institutions. The information provided allows for an analysis of the cost of borrowing and the changes to the cost of borrowing as a result of adjustments in monetary policy. It also improves the credit information available to the Bank of Canada for individuals and businesses and facilitates the calculation of the debt service ratio.

Those Loan and Trust Companies that are subsidiaries of Banks or federally-incorporated Trust and Loan Companies are excluded from the new requirement. 

by Yonatan Petel

a cautionary note

The foregoing provides only an overview and does not constitute legal advice. Readers are cautioned against making any decisions based on this material alone. Rather, specific legal advice should be obtained.

© McMillan LLP 2013