CIBC is paying $3 million to settle a class action in Quebec over mortgage prepayment charges.
On March 10, the Superior Court of Quebec approved a proposed settlement that will see the bank resolve, without admitting the allegations, the Quebec portion of a class action over the calculation and collection of mortgage prepayment charges.
An earlier mediation had resolved the action for $7.5 million in other provinces, but excluded claimants in Quebec.
The court approved the $3-million settlement for claimants in Quebec, saying the amount “appears more generous” compared with the amount agreed upon for the claims from the other provinces.
Under the agreement, approved claimants who were charged mortgage prepayment penalties of more than three months of interest between October 2008 and June 2022 will receive a share of the settlement up to $3,000 “depending on when they borrowed money and prepaid their mortgage loan, the amount of their prepayment charges” and how many claims are filed.
The $3,000 limit doesn’t apply to customers who prepaid their mortgage due to special circumstances, such as the death of — or divorce from — a co-borrower, or an incapacitating illness.
Affected borrowers have until Nov. 2 to file a claim.