CMHC set to be under OSFI supervision?
April 26, 2012 | Posted by: Crescent Mortgage Corp.
With Canada’s most prominant mortgage insurer approaching its massive coverage limit, the federal government appears set to announce Thursday how it will tighten oversight of the Crown corporation that bolsters the housing market and banking sector.
In late March, the federal budget took aim at supervision of CMHC, which controls about 75% of the mortgage default insurance market. In Thursday’s budget implementation bill, Ottawa is expected to detail how this oversight will change.
CMHC currently falls under the umbrella of the minister responsible for Human Resources and Skills Development Canada. But, as first reported by the Financial Post, Ottawa has been considering the possibility of putting the insurer under the direct supervision of the Office of the Superintendent of Financial Institutions — a powerful financial regulator.
The government said Wednesday it plans to introduce a law “to implement certain provisions of the budget,” according to a document known as the Notice Paper. Asked about the potential role of the OSFI in overseeing CMHC, Jim Flaherty, the Finance Minister, told reporters “I’ll talk to you about that tomorrow. Tomorrow’s Thursday, right?”