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  • Might work out, might not. It'll be interesting to see more of the details.

    One item I don't see any of them talking about though, is addressing the regulatory hurdles around alternative banks offering more options when it comes to the underwriting and mortgage qualification. One common reason people are locked out of the housing market, is that they can't qualify for a $1500/month mortgage, so they're stuck paying $1700 rent instead, which is nuts. And the reason the banks -- or more specifically smaller lenders who specialise in mid-market families (ie. Credit Unions) -- can't make these sorts of deals work, is that the regulatory bodies would smash them with huge penalties/fines due to it being considered "riskier" underwriting. Admittedly CUs are provincially regulated, but if we're looking at it as a national issue then there should be broader discussion about these sorts of items amongst all tiers of govt -- sorta like how health care is technically a provincial concern in segregation of power, but the feds have significant influence over it.

    In times past, or more specifically in the 1980s where some of Carney's ideas are coming from, there were more small Credit Unions doing mortgages outside the regular range of the federal banks -- so if you were a 'fringe' borrower, you could still get your foot in the door, just with a different route than a traditional bank. This wasn't a huge risk to the industry at large, as each of those CUs was small -- if any had taken too many bad risks, it would be easy to let the organisation 'fail' and disperse its members over to new CUs. It's less the case now, as the regulators have pushed CUs to merge into far larger organisations and shrunk the count of CUs industry-wide -- meaning if something like Vancity went down, there's no 'safety net' from other CUs able to absorb it and it'd inevitably hit the government books. And because of this, those same regulators force the system to be rigid and conform to explicit guidelines on their lending practices, with relatively minor wiggle room for boards/policies. Their efforts to minimize risk, choking the industry to death slowly, and removing financial supports from traditionally under-served demographic segments.

    Like here's an example that I know for a fact Credit Unions used to be able to offer to people, with some conditions/qualifiers: you could get a personal loan for a low rate to cover a big portion of the down payment on your mortgage. So if they felt like you could take on a bit more debt for the near term to get into a home, ie if they saw you paying $1700/month in rent and that your mortgage was gonna be just $1500, they could basically make that work with a far lower down payment.

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