⚠️ IMPORTANT INDUSTRY NOTICE — PRIVATE LENDING & FINTRAC RISK
This message is directed to mortgage brokers who are engaged in real private lending (i.e., non-MIC, non-syndicated lending).
Question for the industry:
Are you aware that individual private lenders and numbered companies held by individuals, when registered as mortgagees on title at Alberta Land Titles, may be considered FINTRAC reporting entities under PCMLTFA — even for a single transaction?
This was confirmed directly to me by FINTRAC officers, including members of the same audit group that audited AltaWest — and who also audited my own operations.
WHY THIS MATTERS (THE IMPLICATION IS HUGE)
If an individual or privately held corporation is advancing mortgage funds and is registered on title as mortgagee, that party may be deemed to be “engaged in the business of lending” for PCMLTFA purposes.
If that lender:
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Is not registered with FINTRAC, and
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Does not maintain AML / CFT infrastructure,
then they may be found non-compliant if FINTRAC identifies the activity through public land title records.
THE REAL RISK IS NOT JUST THE LENDER — IT’S THE BORROWER
Mortgage brokers who knowingly (or unknowingly) place borrowers with non-compliant private lenders are exposing their borrowers to serious downstream risk.
If FINTRAC determines that a private individual or corporation:
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Is operating as a reporting entity without compliance, and
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Is subject to administrative monetary penalties,
the lender may be forced to:
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Exit the business immediately, or
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Enforce / foreclose simply to unwind exposure, because they are unwilling to absorb the cost of compliance infrastructure.
For context, basic FINTRAC compliance infrastructure can cost ~$450 per month, which materially erodes the return profile of many small private lenders.
WORSE-CASE SCENARIO
The worst outcome is not a fine.
The worst outcome is:
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A borrower being forced into foreclosure,
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Not due to credit performance,
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But because their lender was non-conforming and had to “get out of the business.”
That is not theoretical. That risk is structural.
BROKER DUTY OF CARE (REALITY CHECK)
If you are placing deals with:
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Individual private lenders, or
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Numbered companies owned by individuals,
you should be asking:
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Are they FINTRAC-registered?
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Do they have PCMLTFA policies?
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Do they conduct ongoing reporting?
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Do they understand that being on title changes their regulatory exposure?
Failing to ask these questions does not eliminate the risk — it transfers it.
BOTTOM LINE
Private lending without FINTRAC conformity is no longer “off-the-radar.”
Land title registration is a public signal.
FINTRAC audits do not rely on marketing claims — they rely on facts.
If you are in this space, educate yourself and your lenders.
Ignoring this issue does not protect your borrower — it puts them in harm’s way.
Best,
/s/
Anoop Bungay
MQCC® FOUNDER
Formal Disclaimer
Disclaimer: This document is provided solely for general information and public-interest awareness. It does not constitute legal, regulatory, financial, compliance, or investment advice. No reader should rely solely on this document when making decisions regarding their legal or regulatory obligations. Individuals and organizations must obtain their own independent legal or professional advice tailored to their specific circumstances. MQCC® Bungay International Inc., its officers, directors, employees, systems, or affiliates assume no responsibility or liability for any actions taken or not taken based on the contents herein. This material is provided “as is” without representations or warranties of any kind.
