Canadian mortgage brokers came into FINTRAC's regulatory perimeter in October 2024. The examination cycle is now. Here's what a FINTRAC examination actually looks like and how to prepare.
Mortgage brokers in Canada came under FINTRAC’s regulatory perimeter on October 11, 2024. The examination cycle typically runs 18 to 24 months from the point a sector comes into scope, which means the first round of FINTRAC examinations targeting mortgage brokers specifically is now imminent or in progress.
At time of writing, no mortgage broker has been publicly named in a FINTRAC administrative monetary penalty (AMP). That silence is temporary. When the first mortgage broker AMPs are published, they will follow the pattern already established in other sectors: compliance program deficiencies, missing documentation, inadequate risk assessments, weak training records. The brokerages that prepared will be fine. The brokerages that didn’t will be in the news.
This post is what a FINTRAC examination actually looks like. The process, what examiners ask for, what they find in their reviews of similar sectors, and how to prepare. Written for both principal brokers (who carry the institutional exposure) and individual agents (whose file-level work gets examined).
Mortgage brokers haven’t had their first AMPs yet. Real estate brokers have, and they’re the closest analogue to our sector.
The data FINTRAC has published publicly through November 2025:
Among real estate brokers that received AMPs, 88 percent failed to conduct risk assessments that met FINTRAC’s standards. The deficiencies were remarkably consistent:
Those are the gaps FINTRAC will look for in mortgage brokerages too. The sector is different but the examination playbook is the same.
Most examinations begin with a notice letter. FINTRAC sends a written examination notice that identifies your brokerage, explains the scope, and requests documentation. The notice typically gives 30-60 days to prepare and provide initial materials.
The scope can be:
Some examinations are triggered by a suspicious transaction report, a complaint, or an upstream referral (law enforcement, another regulator). Most are routine - FINTRAC cycles through reporting entities on a risk-based schedule.
The document request list will typically include:
Compliance program materials:
Sample files (usually 10-30 files across different transaction types):
Reports filed:
Organizational materials:
For mortgage brokers, the file-level review will focus on files funded during the examination period (typically the most recent 12-24 months). If your file discipline wasn’t strong during 2024 and 2025, that’s what’s getting examined.
File-level examination isn’t a checkbox exercise. Examiners test whether the compliance program was actually applied - not just whether documentation exists but whether it demonstrates real compliance.
Identity verification: Did you use one of FINTRAC’s approved methods (photo ID, credit file, dual process)? Did you record which method? Did you capture the specific evidence? Can you produce the evidence today?
Third-party determination: Did you ask whether another person was giving instructions or providing funds on behalf of the client? Did you document the answer, even when the answer was no? (Missing third-party determinations on files where the answer was negative is one of the most common deficiencies.)
PEP and HIO identification: Was the client screened at onboarding? Is the screening documented? For any hits that returned, did you investigate and document whether EDD was required? For clients where EDD was required, do you have the senior management approval, source of funds documentation, and source of wealth evidence?
Ongoing monitoring: For active business relationships, did monitoring continue after onboarding? Can you show it? If the client’s circumstances changed during the relationship, was there a fresh risk assessment?
STR analysis: For any files that potentially met the reasonable-grounds-to-suspect threshold for a suspicious transaction report, did you consider it, document the consideration, and either file or justify not filing?
Bill C-12, which received Royal Assent in March 2026, rewrote the PCMLTFA’s compliance program standard. Under the old regime, your program had to be “intended to ensure” compliance. Under the new regime, it must be “reasonably designed, risk-based and effective.”
The practical difference at examination is significant. Under the old standard, a program that existed on paper and had been implemented could pass muster even if it wasn’t producing strong outcomes. Under the new standard, FINTRAC can find deficiencies even when the formal requirements are met, if the program isn’t demonstrably working.
What “reasonably designed” means at examination: The program is appropriate for your specific business - your client base, geographic exposure, transaction types, and delivery channels. Generic templates borrowed from other brokerages without adaptation are a red flag.
What “risk-based” means: Your program reflects a documented understanding of your specific money-laundering and terrorist-financing risks. Clients in higher-risk categories get more attention. Lower-risk clients get less. The allocation is documented and defensible.
What “effective” means: The program produces outcomes - PEPs are identified, high-risk clients receive EDD, suspicious patterns trigger review, records are retrievable. Examiners will probe this by testing actual files against what the program says should happen.
If you haven’t been through a FINTRAC examination before, the most useful preparation is running an internal simulation.
The brokerages that go into a FINTRAC examination prepared don’t sail through because they’re perfect. They pass because their deficiencies are narrow and addressable, and they can demonstrate the program is actually working.
A FINTRAC examination produces one of three outcomes:
No deficiencies found. Rare but it happens. The examination closes with a letter confirming compliance.
Deficiencies identified, compliance improvements required. Most common outcome. FINTRAC issues an action plan letter identifying what needs to change. The brokerage implements the changes and reports back.
Deficiencies identified, AMP issued. The serious outcome. FINTRAC issues an administrative monetary penalty, and under the new Bill C-12 framework, the brokerage must enter into a mandatory compliance agreement or face a public compliance order.
Post-Bill C-12, AMP amounts can reach $4 million for serious violations and $20 million for very serious violations. The compliance program failures that dominate real estate broker AMPs are almost all classified as serious or very serious.
A compliance program is a program, not a piece of software. But software materially changes how examinable the program is.
Continuous AML and PEP screening with automatic record retention produces the documentation trail examiners look for without relying on agents to remember to rescreen. Centralized client data produces retrievable files in seconds rather than the tens of minutes it takes to find files across multiple tools. Integrated risk assessment produces consistent documentation across every client rather than the variable quality that comes from manual entry.
BrokerPlus is built around these principles - compliance is operational baseline in V1, not an add-on. Every client screened at import and continuously after. Every screening logged. Every change timestamped. Every record retrievable in the format FINTRAC expects.
The alternative - manual tracking, spreadsheets, ad-hoc documentation - works if you’re disciplined. It doesn’t work if you’re not. At examination, the gap between the two is the difference between passing and becoming publicly named in the next AMP announcement.
You’ll receive a written notice from FINTRAC. They don’t show up unannounced. The notice identifies scope, timeline, and what documentation you need to provide.
Yes. Examinations are routine, risk-based scheduling. You can be examined because your sector is due for review, not because you’re suspected of anything specifically. Being examined is not the same as being under investigation.
Typically 60 to 120 days from notice to closing letter for a straightforward examination. Complex examinations with significant deficiencies can run 6-12 months.
The examination itself is free - FINTRAC doesn’t charge. The cost is in staff time gathering documentation, often engaging compliance counsel or consultants to help with responses, and any remediation work required. A typical brokerage should budget 40-80 staff-hours plus potential legal/consulting fees of $10,000-$30,000 for a straightforward examination with minor remediation.
Say so honestly and explain why. Fabricating records after the fact is a much worse violation than acknowledging a gap. Honest acknowledgment of a deficiency with a remediation plan usually produces a better outcome than attempts to cover it up.
Not strictly required, but usually worthwhile for anything beyond a routine examination. An AML-specialist Canadian lawyer can help frame responses, identify potential exposure before FINTRAC does, and negotiate action plan or compliance agreement terms. For a straightforward compliance-program-only examination with no identified transaction issues, many brokerages handle it internally or with a compliance consultant.
Patch it and document the patch. “We identified this gap, here’s what we did to fix it, here’s our go-forward approach” is a much stronger position than pretending the gap didn’t exist. FINTRAC examiners are experienced; they can tell when they’re being shown remediation vs. being shown an original clean record.
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