Case name:

CIBC Interest Rate Differential (“IRD”) Mortgage Prepayment –  Quebec Class Action

Quebec Superior Court file #:


What this case was about:

In May 2018, a Class Action was brought by the Plaintiff, a Quebec resident, against CIBC and other financial institutions in connection with the calculation based on an Interest Rate Differential (“IRD”) of certain prepayment charges on mortgages on properties located in the province of Quebec. The Class Action challenged the validity of CIBC’s method for calculating prepayment charges, and in particular, the IRD formula. Prepayment charges can arise when borrowers pay off more of their mortgage than they are entitled to under their mortgage agreement. The IRD formula, which CIBC uses to calculate prepayment charges, compares its posted interest rates at the time of borrowing and the time of prepayment. On July 19, 2019, the Superior Court of Quebec authorized the Class Action in part against CIBC (you can consult the judgment here). CIBC has agreed to settle this class action without any admission of liability or wrongdoing. A copy of the settlement agreement is available below.

Settlement Class:

All natural persons who, from October 17, 2008 to June 30, 2022, paid to the Defendants CIBC or CIBC Mortgages Inc. (or to any of their affiliates) a mortgage Prepayment Charge in an amount that exceeds three months of interest when either entirely or partially paying off a hypothecary loan or a collateral hypothec relating to a fixed-rate loan of a duration of five years or less on a property located in the province of Quebec.

Terms of Settlement:

CIBC has agreed to pay the total amount of $3 million in settlement of the Class Action (the “Settlement”). The Settlement provides for pro rata cash payments to each eligible claimant up to a limit of $3,000, depending on when they borrowed money and prepaid their mortgage loan, the amount of their prepayment charges, as well as on the total number of eligible claimants who will file a claim. The $3,000 limit is a maximum and the settlement payments could be less depending on, amongst other things, the number of claimants.

The Settlement also provides that Class Members who prepaid their mortgage due to special circumstances, namely the death of a co-borrower, the divorce from a coborrower or an incapacitating illness within 36 months prior to the prepayment will not be subject to the $3,000 limit.

This is a summary. For more information, please read the Settlement Agreement, the short-form notice and the long-form notice (available below).

Important information on how to file a claim with the Claims Administrator:

If the Court approves the Settlement, you will have to submit a claims form with the Settlement Administrator.  The Claims Form, along with sample calculations demonstrating how the Distribution Protocol works are available on the Claims Administrator’s website: WWW.CIBCIRDSETTLEMENT.COM

For assistance or questions about your Claim, please contact the Claims Administrator:

Velvet Payments Inc.
5900 Andover Ave. Suite 1
Montreal, QC, H4T 1H5
Telephone: 1-888-770-6892


The hearing to approve the Settlement will take place before the Superior Court of Quebec on February 6, 2023, at 9:30, in room 16.09. The courthouse is located at 1 Notre-Dame St. East, Montreal, Quebec. You can also connect via TEAMS by clicking here.