A brokerage's records management policy states that all client files, including mortgage applications, disclosure documents, and suitability assessments, are purged after five years. Is this policy compliant with Canadian mortgage regulations?

Question: A brokerage's records management policy states that all client files, including mortgage applications, disclosure documents, and suitability assessments, are purged after five years. Is this policy compliant with Canadian mortgage regulations?

Answer options: ✅ No, most provincial regulations, including Ontario's MBLAA, require records to be kept for at least seven years.

• Yes, five years is typically the minimum retention period required by regulatory bodies.
• No, records related to mortgage transactions must be kept indefinitely.
• Yes, as long as the policy is approved by the brokerage's E&O insurance provider.

Correct answer: No, most provincial regulations, including Ontario's MBLAA, require records to be kept for at least seven years.

Explanation: Provincial mortgage broker legislation, such as Ontario's MBLAA, generally mandates that mortgage brokerages retain records related to their business for a minimum of seven years following the date the record was created or the last transaction. Other records like FINTRAC identification must be held for five years from when the account is closed.