FSRA Cracks Down on Private Lending Abuses

The Harold Gerstel case has prompted broader scrutiny of private lending in Ontario. FSRA is now investigating multiple brokers and private lenders who may be operating outside the legal framework.

The Problem

Private lending – where individuals or small companies lend money outside the traditional banking system – has grown significantly in Canada. While much of it is legitimate, the lack of oversight has created opportunities for predators.

What You Can Learn

• Private loans are not automatically bad, but they require extra caution
• Always verify that a mortgage broker is licensed with FSRA
• Ask for a full breakdown of ALL fees before signing anything
• Get independent legal advice – do not use the lawyer recommended by the lender