After it was announced by Jim Flaherty that there would be changes to CMHC and the way they handle mortgages in Ottawa, everyone had an opinion about it. Many didn’t think that the oversight was necessary, while others thought that the Finance Minister was just doing it so that when the bubble burst, the blame wouldn’t be left on his shoulders. For those that were thinking any of the above, one listen to what Karen Kinsley, President and CEO of CMHC, had to say should change their minds.
One of the biggest changes that will take place is that now, the OSFI will oversee the CMHC, to make sure that their capital management; and that the handling of insurance for, Toronto mortgages, and Canadian mortgages is carried out properly.
To that point Ms. Kinsley said, “We’re ready for OSFI oversight. Until OSFI comes in we don’t know what the nature of their inquiries are going to be.” In regards to capital management she also stated, “We do follow OSFI’s guidelines today as it relates to capital management and other of their governance guidelines. We have to be held, and we welcome being held, to heightened levels of governance and oversight.”
But while CMHC may not know what the OSFI inquiries will be, they do know that there will be changes to their mandate after the Office has stepped in. While she said that a few of the mandate changes would occur with OSFI’s oversight, she also noted that CMHC is necessary for Canadians today. “In the National Housing Act today, we have objectives with our commercial activities for instance to increase the supply of funding to mortgages, the accessibility of housing for Canadians, and the general well functioning of the housing market.”
However, she did also point out that the new mandate given by OSFI is likely to be slightly different than what it is currently. “To promote and contribute to the stability of the financial system, including the housing market,” she said. “That broader reference to the financial system is not in our objectives today and is being added explicitly.”
With these remarks it seems that CMHC is more than ready to let OSFI take over; they themselves think that they should be considered and treated the same as other financial institutions throughout Canada.
So, what is all the debate about?
