Banks operate under the scrutiny of government watchdogs. But when it comes to mortgages, those watchdogs don’t watch everything they could.

“Individual (bank) mortgage reps operate outside of regulatory boundaries which commonly govern licensed professionals,” says Samantha Gale, a former mortgage regulator with B.C.’s Financial Institutions Commission and chief executive officer of the Mortgage Brokers Association of British Columbia. Rules pertaining to mortgage rep competency, the suitability of mortgage recommendations and compensation disclosure are largely left to the banks themselves.

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