The Canada Mortgage and Housing Corporation (CMHC) is contemplating the implementation of regulations that would require lenders to pay deductibles on mortgage insurance claims, its top official said on Monday (March 14).
In a Calgary lunch meeting hosted by the C.D. Howe Institute, CMHC CEO and president Evan Siddall said that his group is collaborating with government bodies like the Bank of Canada and the Department of Finance to iron out a plan for making banks assume greater home mortgage risk.
Despite rumblings of interventionism, Siddall noted that this role of ensuring a fairer distribution of risk is in keeping with the organization’s mandate as “a Crown corporation with a public policy mandate.”
“This is a fundamental way in which we contribute to Canada’s financial stability,” Siddall said in his speech, as quoted by CBC News.
In contrast, the Canadian Bankers Association advised the CMHC against such as step in August 2014, arguing that Canada’s financial stability will be in danger if banks take on even more risk than they are already handling.