The Canadian Bankers Association says it plans to file a lawsuit this week challenging the fees charged by a Canadian-based mortgage lender and its parent, Canadian Mortgage and Housing Corp., that it says are “unconscendable” for the CBA and are “undue, excessive and discriminatory.”
In its statement of claim filed in Ontario Superior Court, the CAA says the fees are “a violation of the CAB’s fiduciary duty to ensure that it provides the highest level of service to its clients.”
In a separate statement of defence filed Tuesday, CAA alleges that the fees “are unfair and discriminatory because they are not charged to customers who qualify for the loan and the fee is imposed on a non-customer.”
“It is also unduly burdensome for CAB to have to defend itself,” the CTA’s lawyers said.
The CBA says that in its current relationship with CMO, it “does not have to fight” against the fees, which are “comparable” to those charged to other lenders.
“It cannot afford to defend the fees against the CMBs arguments because they could result in CMB having to pay for the lawyer fees for defending itself,” said the CMA’s lawyer, Michael Kesselman.
The lawyers allege that the CPMC, which is owned by the same bank, “seeks to collect fees from CBA in the hope that it will be able to collect them from its customers.”
“The CPMCs own fees are unjust and discriminatory.
We will not stand by and allow them to continue to charge a fee that is not in accordance with the law,” said Kesselmen.
In the suit, CPMS says it has “an interest in the fairness of the application process and in ensuring that CBA’s financial services, as well as those of its clients, are available to its customers on an equal basis.”
It argues that CMB is “an unlicensed lender, and the only lender that is authorized to serve and charge CBA fees,” and says that CPMB has “a significant role in the provision of CBA services to its members.”
In addition to the fees the CMO is asking for, the suit also asks for “the payment of an amount equal to at least the cost of legal fees in relation to the alleged breach of fiduciaries duty.”
CPMs lawyers say they have not yet filed a counterclaim with the court.
A lawyer for the Canadian Mortgage And Housing Corp. did not immediately respond to a request for comment.