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2026 End of Year Policy Report

Overview: The Canadian Lenders Association’s policy work is grounded in evidence-based advocacy, cross-sector coordination, and sustained engagement with federal and provincial policymakers. Through structured roundtables, member consultations, and direct regulatory dialogue, the CLA works to ensure that Canada’s financial policy framework protects consumers while preserving responsible access to credit across the economy. Our approach emphasizes proportional regulation, operational feasibility, and harmonization across jurisdictions, enabling lenders of all sizes to serve households and businesses effectively. The policy updates in this report reflect the CLA’s ongoing role as a trusted intermediary between government, regulators, and the lending ecosystem as Canada navigates a period of accelerated regulatory change.

This end-of-year report provides a consolidated overview of major federal and provincial policy developments affecting Canada’s lending ecosystem, with a focus on both cross-sector regulatory change and sector-specific issues expected to shape 2026.

Cross-Sector Policy Updates

  • Changes to Canada’s Maximum Allowable Rate of Interest (Criminal Code)
  • Federal Rollout of Consumer-Driven Banking (Open Banking)
  • Federal Anti–Money Laundering (AML) Reforms
  • Credit Reporting (Consumer Protections)

Sector-Specific Policy Updates

  • Automotive Financing
  • Real-Estate Financing and Home Improvement Financing
  • SMB Financing
  • Buy Now, Pay Later (BNPL)
  • Sustainable Finance
  • Crypto and Digital Assets

Cross-Sector Policy Updates

1. Changes to Canada’s Maximum Allowable Rate of Interest (Criminal Code Sec. 347)

Summary of the Change

As of January 1, 2025, amendments to section 347 of the Criminal Code lowered the maximum allowable interest rate from 60 percent effective annual rate (approximately 48 percent APR) to 35 percent APR and shifted the criminal rate calculation from EAR to APR.

The amendments created four distinct criminal interest rate offences:

  • Entering into an agreement to receive interest at a criminal rate
  • Offering or advertising an agreement to receive interest at a criminal rate
  • Receiving a payment of interest at a criminal rate
  • Receiving a partial payment of interest at a criminal rate

The federal government has committed to reviewing the impacts of the 35 percent APR cap following the initial implementation period.

Exemptions Achieved Through CLA Advocacy

The accompanying Criminal Interest Rate Regulations introduced limited commercial-loan exemptions where:

  • The borrower is not a natural person, and
  • The borrower is acting for a business or commercial purpose

Specifically:

  • Commercial loans above $10,000 and up to $500,000 may exceed 35 percent APR, subject to a 48 percent APR ceiling
  • Commercial loans above $500,000 are uncapped
  • Loans under $10,000 remain fully subject to the 35 percent APR cap

The amendments also include a transition provision. Payments arising from agreements entered into before January 1, 2025 continue to be governed by the former 60 percent EAR framework.

CLA Historical Advocacy Impact

The commercial exemption represents a significant advocacy outcome for CLA members following several years of sustained, evidence-based engagement with the Department of Finance and federal policymakers. The CLA demonstrated that applying consumer-credit constraints to commercial lending would materially restrict working-capital access for Canadian businesses.

At the same time, the CLA’s Risk Roundtable has continued to monitor consumer-credit impacts. Early 2025 data indicates increased rejection rates among non-prime borrowers, with evidence that some consumers are being pushed toward higher-cost or unregulated alternatives. These developments underscore the need for continued dialogue and further refinement of the framework.

CLA 2026 Focus

In 2026, the CLA will prioritize:

  • Advancing data-driven recommendations that protect consumers while preserving responsible access to non-prime credit
  • Supporting sustainable commercial-lending frameworks for SMBs unable to access traditional bank financing
  • Encouraging greater alignment between federal rules and provincial high-cost credit regimes
  • Providing government with real-time market data to support evidence-based decision-making

The objective is a balanced framework that protects consumers without unintentionally narrowing lawful access to credit.

How to Engage

Members are encouraged to participate through:

  • The Non-Prime Roundtable
  • The Risk Roundtable

To join, contact matt@canadianlenders.org.


2. Federal Rollout of Consumer-Driven Banking (Open Banking)

Summary of the Change

Budget 2025 confirmed the rollout of Canada’s Consumer-Driven Banking framework and a significant supervisory shift. The Bank of Canada will assume responsibility as the national regulator for open banking, replacing the Financial Consumer Agency of Canada. Legislative amendments enabling this transition are included in the Budget Implementation Act, with further updates to the Consumer-Driven Banking Act forthcoming.

The rollout will proceed in phases:

  • Phase 1 (2026): Secure, read-only API-based data access with no data-sharing fees
  • Phase 2 (mid-2027): Write-access functionality, including payment initiation, account switching, and embedded-finance use cases

These changes represent a foundational shift toward a more competitive, interoperable, and consumer-empowering financial system.

CLA Historical Advocacy Impact

The CLA has been a leading industry voice shaping Canada’s open-banking agenda, including:

  • Ensuring non-bank lenders, fintechs, mortgage providers, and specialty finance firms are treated as full participants
  • Coordinating cross-sector input to demonstrate how open banking improves underwriting, risk assessment, fraud prevention, and consumer outcomes
  • Advocating for proportional oversight that balances innovation with strong consumer protection

This engagement helped ensure the framework is being designed as a whole-of-market system rather than a bank-centric model.

CLA 2026 Focus

Key priorities for 2026 include:

  • Accreditation rules that recognize non-bank lenders as primary data recipients
  • Data-access standards that support underwriting, fraud detection, and portfolio management
  • Preventing pricing, access, or technical barriers that limit participation by smaller firms
  • Coordinating member input during Phases 1 and 2 implementation

With supervisory authority shifting to the Bank of Canada, 2026 will be a critical year for industry influence.

How to Engage

Members are encouraged to review recent open-banking editorials in Canadian Finance News, including an op-ed by CLA President Gary Schwartz, and to submit thought leadership pieces by contacting matt@canadianlenders.org.


3. Federal Anti–Money Laundering Reforms (PCMLTFA Modernization)

Summary of the Changes

Budget 2024 and subsequent regulatory updates continue a multi-year modernization of Canada’s AML regime under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Several reforms are now in force or will come into effect through 2025.

Key changes include:

  • Expansion of reporting-entity obligations to additional financing and leasing activities
  • More prescriptive beneficial-ownership verification and ongoing monitoring requirements
  • Enhanced recordkeeping and reporting obligations, including virtual-currency transactions and sanctions disclosures
  • Increased penalties and expanded FINTRAC enforcement tools
  • Ongoing work to improve information sharing between institutions, FINTRAC, and law enforcement

These reforms aim to address longstanding gaps and align Canada with FATF expectations.

CLA Historical Advocacy Impact

The CLA has played a central role in ensuring AML reforms reflect lender realities by:

  • Engaging early with Finance Canada and FINTRAC on scope and definitions
  • Advocating for proportionality and operational feasibility
  • Coordinating member feedback on reporting, onboarding, and beneficial-ownership verification
  • Supporting phased implementation and clearer regulatory guidance

CLA 2026 Focus

The CLA’s priorities include:

  • Advocating for risk-based proportionality, particularly for digital-first and small-dollar lenders
  • Securing practical guidance on automated decisioning and monitoring
  • Ensuring alignment between federal AML rules and provincial credit frameworks
  • Supporting member readiness through briefings, templates, and roundtables

2026 will be a pivotal year as FINTRAC expands supervisory activity.

How to Engage

Members can access submissions and AML materials by contacting dean@canadianlenders.org and are encouraged to join the CLA Risk Roundtable.


4. Credit Reporting and Consumer Protections

Summary of the Change

Provinces are modernizing credit-reporting regimes to enhance transparency and consumer control. British Columbia’s Bill 28 is the most significant recent example, introducing:

  • Mandatory credit-freeze rights
  • Rules for temporarily lifting freezes
  • Enhanced dispute-resolution and accuracy standards
  • New enforcement tools and penalties

Other provinces are considering similar reforms, signaling a national shift toward consumer-controlled credit data.

CLA Historical Advocacy Impact

The CLA has consistently emphasized:

  • The need for consumer protections that do not impede real-time underwriting or AML compliance
  • Harmonization across provinces to avoid fragmented frameworks
  • Clear mechanisms for identity verification when freezes or alerts are in place

Engagement on BC’s Bill 28 intensified following its introduction in October 2025. The CLA convened lenders, credit bureaus, and legal experts, identified statutory pain points, and coordinated direct outreach to provincial officials. As a result, BC officials have indicated concerns will be addressed through regulation.

CLA 2026 Focus

Priorities include:

  • Provincial harmonization of freeze and dispute rules
  • Operational clarity for lenders accessing frozen files
  • Monitoring impacts on underwriting speed and approval rates
  • Supporting member readiness ahead of implementation timelines
  • Encouraging federal-provincial coordination

Additional provincial legislation is expected in 2026.

How to Engage

The CLA coordinates this work through a dedicated subcommittee of lenders, credit bureaus, and legal experts. Members should contact dean@canadianlenders.org to stay informed.

Sector-Specific Policy Updates

1. Automotive Financing (RSLA Modernization – Ontario)

Ontario continues to explore reforms to the Repair and Storage Liens Act to address fraud, inconsistent lien practices, and title-transparency gaps.

CLA Advocacy Focus

Through the Automotive Financing Roundtable, the CLA has advanced recommendations including:

  • Distinguishing essential repairs from cosmetic or non-essential upgrades
  • Limiting liens to the actual cost of essential repairs and aligning charges with consumer-protection rules
  • Improving standards for towing and storage fees
  • Supporting a one-year grandfathering period for existing liens

What’s Next

RSLA reform will be a core topic at the 2026 CLA Auto Finance Summit. Auto lenders are encouraged to participate in the CLA Auto Lenders Roundtable.

2. Real-Estate Financing and Home Improvement Financing (PPSA Modernization – Ontario)

Ontario’s Homeowner Protection Act banned Notices of Security Interest and shifted reliance to PPSA registrations, creating operational challenges for lenders and the legal community.

CLA Advocacy Focus

The CLA has focused on:

  • Highlighting deficiencies in PPSA search practices
  • Seeking clarity for due-diligence expectations in real-estate transactions
  • Addressing risks created by the elimination of NOSIs
  • Advocating for transitional fairness and liability clarity

What’s Next

The CLA will continue working with government and legal stakeholders to improve PPSA practices. Members are encouraged to join the Home Improvement or Real-Estate Financing Roundtables.

3. SMB Financing (AML Reforms and FINTRAC Supervision)

Expanded AML obligations now capture many non-bank SMB lenders for the first time.

CLA Advocacy Focus

Through the SMB Financing Roundtable, the CLA has focused on:

  • Clarifying scope and definitions
  • Advocating proportional compliance standards
  • Minimizing operational burden
  • Ensuring federal-provincial regulatory alignment

What’s Next

FINTRAC supervision will intensify through 2025–26. SMB lenders are encouraged to participate in the CLA SMB Financing Roundtable.

4. Buy Now, Pay Later (BNPL) – RPAA Compliance

With the RPAA in force as of September 8, 2025, many BNPL providers are now subject to Bank of Canada supervision.

CLA Advocacy Focus

The CLA has supported BNPL members by:

  • Clarifying RPAA scope
  • Supporting readiness for Bank of Canada supervision
  • Guiding funds-safeguarding compliance
  • Addressing RPAA and AML overlap
  • Advocating proportional oversight

What’s Next

Supervisory examinations are underway. BNPL providers are encouraged to join the CLA BNPL Roundtable.

5. Sustainable Finance (OSFI Guidelines – B-15 and Scope 3 Timelines)

OSFI updated Guideline B-15 in January 2025, deferring Scope 3 financed-emissions reporting to FY2028 and FY2029.

CLA Advocacy Focus

The CLA is focused on:

  • Clarifying practical impacts of B-15 updates
  • Helping members anticipate downstream expectations from FRFI counterparties
  • Monitoring broader federal sustainable-finance policy
  • Supporting lenders developing sustainable-finance products

What’s Next

There are no new economy-wide disclosure mandates or penalties at this stage. Members are encouraged to engage through the CLA Sustainable Finance Roundtable.

6. Crypto and Digital Assets (Stablecoin Act and BoC Oversight)

Budget 2025 introduced the Stablecoin Act, establishing a prudential regime overseen by the Bank of Canada.

CLA Advocacy Focus

The CLA has:

  • Published Canada’s first guide to crypto-backed lending
  • Contributed thought leadership on regulated crypto lending
  • Engaged legal, DeFi, and market stakeholders
  • Advocated for innovation-friendly, harmonized regulation

What’s Next

Implementation is expected through 2026–27. Lenders exploring digital-asset use cases are encouraged to join the CLA Crypto Roundtable.

Roundtables

Active member participation is central to the effectiveness of the CLA’s policy work. The Association’s roundtables serve as the primary mechanism through which real-time market intelligence, operational insights, and emerging risks are surfaced and translated into credible advocacy positions. By joining the appropriate sector and cross-cutting roundtables, members directly influence regulatory engagement, contribute to evidence submitted to policymakers, and help shape practical implementation guidance as new rules take effect. In a period of accelerated regulatory change, sustained involvement ensures that lender perspectives are represented early, consistently, and constructively, strengthening outcomes for both consumers and the broader financial system.

To join a roundtable contact matt@canadianlenders.org.

Endnote

This 2026 End of Year Policy Report highlights the breadth and pace of regulatory change affecting Canada’s lending ecosystem, spanning criminal interest rate reform, open banking implementation, AML modernization, credit reporting reform, and sector-specific developments across automotive, real estate, SMB, BNPL, sustainable finance, and digital assets. Collectively, these initiatives reflect a shift toward more prescriptive oversight, expanded supervisory mandates, and greater expectations around consumer protection, data governance, and risk management.

Throughout 2025 and into 2026, the Canadian Lenders Association has played a central role in shaping these outcomes through sustained, evidence-driven advocacy and coordinated engagement across government and regulatory bodies. While meaningful progress has been achieved, particularly through targeted exemptions, phased implementation, and regulatory clarification, several policy files remain in active transition.

Looking ahead, the CLA’s priority is to ensure that emerging frameworks remain balanced, proportionate, and operationally workable, while safeguarding consumer interests and preserving access to responsible credit. Continued collaboration between lenders, regulators, and policymakers will be essential as implementation accelerates and additional reforms are introduced. The CLA will remain focused on addressing member issues and focusing on practical policy

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