Does this apply if I only arrange financing through banks and third-party lenders?

The rules target businesses engaged in the business of financing or leasing: carrying the paper themselves. If every deal is placed with a third-party lender who holds the contract, that lender is the reporting entity for the financing. But the moment you hold even some contracts in-house (including through a related finco), those deals bring you into scope. When in doubt, confirm your status against FINTRAC's guidance for financing or leasing entities, or with counsel.

What happens during a FINTRAC examination?

FINTRAC typically sends a notice requesting documents in advance: your compliance program documents, risk assessment, training records and a sample of client files. The examiner then reviews whether the program exists on paper and whether your actual records match it. Findings can lead to an action plan, follow-up examination, or administrative monetary penalties.

What are the penalties for non-compliance?

FINTRAC can issue administrative monetary penalties for program failures even where no money laundering occurred. Bill C-12 raised the ceilings roughly 40-fold: up to $40,000 for minor violations, up to $4,000,000 for serious ones, and up to $20,000,000 for very serious ones, and a missing or ineffective compliance program is explicitly classified as very serious, not minor.

I just found out this applies to me. What should I do first?

Appoint a compliance officer (it can be the owner in a small business), then get a written compliance program in place: policies and procedures, a risk assessment, and a training plan. Then start capturing client identification evidence on every in-scope deal going forward. A structured checklist (like our free 12-item readiness checklist) is the fastest way to see your gaps.

The April 1, 2026 change: FINTRAC now examines dealerships that finance on their own paper

Financing and leasing businesses became FINTRAC reporting entities on April 1, 2025, and FINTRAC's first-year grace period of outreach over enforcement ended April 1, 2026. Here's who is caught, what obligations attach, and what you must have in place before an examiner calls.

For years, a car dealership or equipment leasing company could reasonably say FINTRAC was someone else's problem: the bank's, the finance company's. That changed in two steps:

April 1, 2025: regulations came into force making financing and leasing entities reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The obligations (compliance program, client identification, record keeping, reporting) have applied since this date.
April 1, 2026: FINTRAC's stated first-year emphasis on "engagement, outreach and guidance" ended. The grace posture is over: examinations and enforcement are now in play, and Bill C-12 (in force since March 26, 2026) raised the penalty ceilings roughly 40-fold at almost the same moment.

If you're reading this in 2026 and just discovering the obligation, note what that timeline means: your record-keeping duties started in April 2025, and every in-scope deal since then is already part of the history an examiner can sample.

This guide covers who is caught, what obligations attach, and what an examiner will actually ask for.

Who is in scope

FINTRAC's regulations define a financing or leasing entity as a person or entity engaged in the business of financing or leasing of:

property (other than real property or immovables) for business purposes;
passenger vehicles in Canada; or
property (other than real property or immovables) valued at $100,000 or more.

In practice, for the auto and equipment world, that catches:

Dealerships that buy-here-pay-here or otherwise carry their own finance contracts, including through a related finance company.
Equipment finance and leasing companies writing leases on their own book.
Brokers and leasing companies who hold some contracts in-house even if most deals are placed with third-party lenders: the in-house deals bring you into scope.

The operative phrase is engaged in the business of financing or leasing. If every single deal is funded and held by a third-party lender, that lender carries the reporting-entity obligations for the financing. The dividing line is whose paper the customer signs and who holds it.

What you're now required to have

Reporting entities must maintain a compliance program with five elements. FINTRAC's guidance is explicit that all five must exist and be documented:

A designated compliance officer: a named person accountable for the program. In a small dealership this is usually the dealer principal or controller.
Written policies and procedures: how you identify clients, keep records, monitor for and report suspicious activity, kept up to date.
A risk assessment: a documented look at your clients, products, delivery channels and geography, with mitigation for anything high-risk.
Ongoing training: a plan for it, and records proving who was trained on what, when.
A two-year effectiveness review: a documented test of whether the program actually works, at least every two years.

See our full breakdown of all five elements for what each one means in practice.

On top of the program come the operational duties: verifying client identity on in-scope transactions using an acceptable identification method, record keeping (five-year retention), and filing suspicious transaction and large cash reports when they're triggered.

What an examination looks like

FINTRAC examinations are document-driven. Expect a request for your program documents, risk assessment and training records up front, then a review of a sample of deal files against your own procedures. The examiner is testing two things:

Does a real compliance program exist, and do your files prove you follow it?

That second part is where businesses fail. A binder written the week before the exam can't manufacture two years of client-identification records, screening evidence, or training completions. The record has to be built deal-by-deal, as business happens.

The cost of getting it wrong

Administrative monetary penalties don't require any actual money laundering: they attach to program failures. Bill C-12 raised the ceilings roughly 40-fold, to $40,000 for minor violations, $4,000,000 for serious ones, and $20,000,000 for very serious ones, and a missing or ineffective compliance program is explicitly classified as very serious, not minor. Findings are also published with your business name attached. See our full breakdown of Bill C-12 penalties for what drives the amount and severity tier.

Where to start

Name your compliance officer today: it's a decision, not a project.
Run a gap check against the five program elements. Our free 12-item readiness checklist maps to what examiners request first.
Start capturing identification and screening evidence on every in-scope deal from now on: the record only exists if you build it as you go.

Provasure exists for exactly this: a guided compliance program, deal-level KYC evidence, training records, and a one-click exam binder for dealerships and leasing companies financing on their own paper.

Sources: FINTRAC's requirements page for financing or leasing entities (including the definition and the April 1, 2025 coming-into-force date) is at fintrac-canafe.canada.ca/re-ed/lease-bail-eng; general guidance for all reporting entities is at fintrac-canafe.canada.ca. Always verify your obligations against the current official guidance.

This article is general regulatory information, not legal advice. Requirements depend on your business: verify against FINTRAC's official guidance or counsel.