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Statutes of Newfoundland 1995


CHAPTER C-37

CHAPTER C-37.1

AN ACT TO REVISE AND CONSOLIDATE THE LAW RESPECTING CREDIT UNIONS

(Assented to December 21, 1995)

Analysis

1. Short title

2. Definitions

3. Co-operative basis

4. Part prevails

5. Prohibition

PART I
INCORPORATION OF CREDIT UNIONS

6. Incorporation

7. Articles

8. By-laws

9. Certificate of incorporation

10. Certificate of incorporation

11. Business commencement requirements

12. Name

13. Name reservation

14. Prohibited names

15. Pre-incorporation contract

PART II
CAPACITY AND
POWERS

16. Capacity

17. Jurisdiction outside province

18. Business of credit unions

19. Insurance

20. Subsidiaries and trade

21. Restrictions

22. No contravention notice

23. Reliance

PART III
REGISTERED OFFICE AND RECORDS

24. Registered office

25. Branch office

26. Records

27. Examination of records

28. Form of records

29. Corporate seal

PART IV
CAPITALIZATION AND OPERATING
STANDARDS

30. Member shares

31. Transitional

32. Shares other than members' equity shares

33. Share certificates not required

34. Considerations

35. Patronage refunds

36. Dividends on shares

37. Purchase of surplus shares

38. Restriction on payment

39. Exception

40. Liability limited

41. Remedy

42. Unclaimed balances

43. Member right to withdraw deposits

44. Trust funds

45. Partial payment on death

46. Nomination of beneficiary

47. Loans

48. Report

49. Lien

50. Overdrafts

51. Liquid assets

52. Investments

53. Doubtful loans

54. Equity

55. Borrowing

56. Matching

57. Insurance required

58. Valuation of assets

PART V
MEMBERSHIP

59. Membership

60. Bond of association

61. Membership termination

62. Membership withdrawal

63. Remedy preserved

64. By-laws

65. Members bound

66. Place of meetings

67. Calling meetings

68. Record date

69. Notice of meetings

70. Waiver of notice

71. Member notice

72. Quorum

73. Voting

74. Corporate representation

75. Voting by proxy

76. Joint membership

77. Executors and administrators

78. Ballot

79. Voting method

80. Requisition by members to call meeting

81. Meeting called by superintendent

PART VI
DIRECTORS AND
OFFICERS

82. Directors

83. Qualifications

84. Terms of office

85. Ceasing to hold office

86. Removal of directors

87. Reasons

88. Vacancy

89. Notice of change of directors

90. Meetings

91. Committees

92. Credit and audit committees

93. Validity of acts

94. Resolution

95. Liability

96. Duty to report

97. Material contracts

98. Disclosure

99. Designation of officers

100. Remuneration and expenses

101. Duty of care

102. Dissent

103. Indemnification

PART VII
RETURNS AND
FINANCIAL DISCLOSURE

104. Fiscal year

105. Annual returns

106. Annual financial statements

107. Conditions re: financial statements

108. Request for documents

109. Auditors

110. Auditor removal

111. Ceasing to hold office

112. Vacancy

113. Auditor appointed by superintendent

114. Right and duty to attend meetings

115. Statement of auditor

116. Examinations by auditor

117. Superintendent may enlarge scope

118. Right to demand information

119. Auditor's report

120. Audit committee

121. Duty of auditor

122. Additional requirements

123. Access to papers

124. Qualified privilege

125. No liability

PART VIII
FUNDAMENTAL CHANGES

126. Amendment of articles

127. Articles to superintendent

128. Certificate of amendment

129. Effect of certificate

130. Restated articles

131. Amalgamation

132. Amalgamation agreement

133. Approval of agreement

134. Articles of amalgamation

135. Compulsory amalgamation

136. Certificate and effect of amalgamation

137. Extraordinary sale, lease or exchange

138. Approval of superintendent

139. Dissent

140. Reorganization

PART IX
DISSOLUTION,
LIQUIDATION AND REVIVAL

141. Voluntary dissolution

142. Voluntary liquidation and dissolution

143. Articles of dissolution and certificate

144. Dissolution by superintendent

145. Application to court

146. Custody of records

147. Effect of dissolution

148. Unclaimed property

149. Revival

150. Certificate of revival and effect

151. Return of property on revival

152. Effect of Bankruptcy Act (Canada)

PART X
THE CREDIT UNION CENTRAL OF
NEWFOUNDLAND AND LABRADOR

153. Application

154. Central continued

155. Prohibition

156. Articles

157. Purpose

158. Powers of a natural person

159. Duty to act within powers

160. Other duties

161. Investments

162. Fees

163. Shares

164. Classes of shares

165. Additional share purchase

166. Prohibition

167. Membership

168. Associate members

169. Delegates

170. Liability

171. By-laws

172. Directors

173. Qualifications

174. Information

PART XI
CREDIT UNION DEPOSIT GUARANTEE
CORPORATION

175. Application

176. Continuation

177. Purposes

178. Capacity

179. Powers

180. Board

181. Officers

182. Vacancy

183. Office ceases

184. Management

185. Quorum

186. By-laws

187. Guaranteed deposit insurance

188. Prohibition

189. Deposit guarantee fund

190. Determination of levy

191. Manner of collection

192. Loans to guarantee corporation

193. Records

194. Fiscal year

195. Audit

196. Application

197. Payment of levy

198. Report to minister

PART XII
REMEDIES, OFFENCES AND PENALTIES

199. Definitions

200. Derivative action

201. Powers of court

202. Application to court

203. Application

204. Rectification of register

205. Compliance application

206. Application for direction

207. Appeal

208. Review and examination

209. Examination powers

210. Voluntary compliance

211. Compliance order

212. Appeal

213. Minister consent

214. Appearance by superintendent

215. Private or public hearings

216. Offence

217. General offence

218. Compliance order

219. Maintenance of action

PART XIII
COMPLIANCE AND
SUPERVISION

220. Supervision of credit union

221. Supervision of central

222. Supervisor

223. Length of supervision

224. Powers of supervisor

225. Report

226. Directions

227. Accounting

228. Release of claims

PART XIV
GENERAL

229. Notice

230. Service of notice

231. Waiver of notice

232. Certificates

233. Signatures

234. Copies

235. Verification

236. Statement of intent

237. Alter notice or document

238. Corrected certificate

239. Examination of documents

240. Records

241. Superintendent

242. Register of credit unions

243. Regulations

PART XV
TRANSITIONAL, REPEAL AND CONSEQUENTIAL AMENDMENTS

244. Matters done under former Act

245. Application and continuance

246. Amending instruments

247. Articles of continuance

248. Certificate of continuance

249. Non-application of RSN 1990 cC-35

250. Consequential amendments

251. Commencement

Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:


Short title

1. This Act may be cited as the Credit Union Act.

Definitions

2. In this Act

(a) "articles" means

(i) the original or restated articles of incorporation, amendment, amalgamation, continuance, reorganization, dissolution and revival of a credit union, and

(ii) a statute or other constating instrument evidencing the corporate existence of a co-operative or a credit union continued as a credit union under this Act;

(b) "central" means the Credit Union Central of Newfoundland and Labrador continued under section 154;

(c) "court" means the Trial Division;

(d) "credit union" means a corporation incorporated or continued as a credit union or a co-operative credit society under this Act and includes a caisse populaire;

(e) "delegate" means a person appointed or elected under section 169 to represent a credit union at meetings of the central of which the credit union is a member;

(f) "deposit" means money placed in an account in a credit union or the central;

(g) "director" in relation to a credit union or the central means a person occupying in the credit union or the central, the position of director by whatever name that person is called and "directors" and "board of directors" includes a single director;

(h) "equity" means in relation to a credit union,

(i) the value of the consideration paid for membership shares and other shares issued by the credit union that are not redeemable within one year,

(ii) the book value of surplus shares issued by the credit union, and

(iii) the retained earnings of the credit union,

unless the credit union has an accumulated deficit, in which case it means the amounts determined under subparagraphs (i) and (ii) minus the accumulated deficit;

(i) "guarantee corporation" means the Credit Union Deposit Guarantee Corporation continued under section 176;

(j) "member" in relation to a credit union or the central means a person or a delegate who, whether alone or jointly with others, is a shareholder in that credit union or the central and qualifies for membership in the credit union or the central in accordance with the by-laws;

(k) "minister" means the Minister of Finance;

(l) "ordinary resolution" means a resolution passed by a majority of the votes cast by the persons who voted in respect of that resolution;

(m) "patronage refund" means an amount that under this Act is allocated among and credited or paid by a credit union or the central to its members, based on the business done by each of them with the credit union or the central;

(n) "security" means a share or a debt obligation or a certificate evidencing a share or a debt obligation;

(o) "security interest" means an interest in or charge upon property of a credit union, the central or the guarantee corporation taken by a creditor to secure payment of a debt or performance of an obligation of a credit union, the central or the guarantee corporation and includes a certificate evidencing a share or debt obligation;

(p) "special resolution" means a resolution passed by a majority of not less than 2/3 of the votes cast by the persons who voted in respect of that resolution or signed by all the persons entitled to vote on that resolution;

(q) "subsidiary" means a corporation in which a credit union or the central has a majority of the voting shares; and

(r) "superintendent" means the Superintendent of Credit Unions appointed under section 241.

Co-operative basis

3. A credit union shall operate on a co-operative basis to provide a range of financial services that meet the needs of its members and to provide for the direction and control of those services by those members.

Part prevails

4. Where a provision of Part X or XI is inconsistent with another provision of this Act, the provision of that Part prevails.

Prohibition

5. A person not incorporated or continued as a credit union under this Act shall not carry on the business of a credit union in the province.

PART I
INCORPORATION OF CREDIT UNIONS

Incorporation

6. (1) Twenty or more persons may incorporate as a credit union.

(2) A person referred to under subsection (1) shall not

(a) be less than 19 years of age;

(b) be of unsound mind as determined by a court of competent jurisdiction; or

(c) be an undischarged bankrupt person.

(3) The incorporators shall apply for incorporation as a credit union by sending to the superintendent

(a) the proposed articles of incorporation;

(b) the proposed by-laws;

(c) a notice of registered office; and

(d) other information that the superintendent may require.

Articles

7. (1) Articles of incorporation of a credit union shall be in the form prescribed by regulation and shall set out,

(a) the name of the credit union;

(b) the place in the province where the registered office is to be situated;

(c) the name, residence address and principal occupation of each first director;

(d) a statement of the proposed bond of association of the credit union;

(e) the classes and maximum number of shares that the credit union is authorized to issue other than membership shares, and if there will be 2 or more classes of shares the rights, privileges, restrictions and conditions attaching to each class of shares;

(f) if the right to transfer shares of the credit union is to be restricted, a statement that the right to transfer shares is restricted and the nature of the restrictions; and

(g) restrictions on the business that the credit union may carry on,

and shall provide for other matters which under this Act are required to be dealt with in the articles.

(2) The articles may set out provisions permitted by this Act to be set out in the by-laws of the credit union.

(3) For the purpose of paragraph (1)(d), "bond of association" means a characteristic common to all members of a credit union and which leads them to join together in a credit union.

By-laws

8. (1) The by-laws of a credit union shall provide for those matters that are applicable but are not set out in the articles as follows:

(a) the qualifications for, conditions of and method of applying for and terminating membership in a credit union;

(b) the location of meetings of members, the procedure and quorum at those meetings, the rights in relation to voting and the making, repealing or amending of by-laws, the right of members to vote by ballot, mail or other means that are prescribed in the by-laws and the manner, form and effect of voting;

(c) the election, term of office, removal of and filling of vacancies among directors, committee members and officers, their powers, duties and remuneration, and the procedure and quorum at meetings of the board of directors; and

(d) other matters which by this Act are required to be dealt with in the by-laws.

(2) The by-laws of a credit union may provide for matters in addition to those referred to in paragraphs (1)(a) to (d) if the by-laws are not inconsistent with this Act.

Certificate of incorporation

9. (1) The superintendent may approve an application for incorporation as a credit union

(a) where he or she is satisfied that

(i) the proposed articles of incorporation and by-laws are in compliance with this Act,

(ii) the proposed credit union will be organized and operated in accordance with section 3,

(iii) the applicants are qualified to establish and the proposed directors are qualified to establish and operate the proposed credit union, and

(iv) sections 7 and 8 have been complied with;

(b) where the guarantee corporation has notified the superintendent in writing that it is satisfied that the proposed credit union has met all criteria established by the guarantee corporation for the incorporation of new credit unions;

(c) where the central has notified the superintendent in writing that it supports the establishment of, and has the resources available to provide support to, the new credit union; and

(d) unless he or she considers the application is contrary to the public interest.

(2) The superintendent shall file the articles of incorporation and by-laws submitted under subsection 6(3) and shall issue a certificate of incorporation in accordance with section 232.

(3) The superintendent shall give notice of the issuing of a certificate of incorporation in the Gazette.

Certificate of incorporation

10. (1) A credit union comes into existence on the date shown in the certificate of incorporation.

(2) A certificate of incorporation shall be considered to be proof

(a) that the provisions of this Act in relation to incorporation of a credit union and all requirements precedent and incidental to incorporation have been complied with; and

(b) that the credit union has been incorporated under this Act as of the date shown in the certificate of incorporation.

Business commencement requirements

11. (1) A credit union incorporated under this Part shall not commence business in the province until the superintendent has given his or her approval for that commencement.

(2) The superintendent shall not approve the commencement of business of a credit union unless that credit union has complied with the requirements that are prescribed by regulation for the commencement of business.

(3) Subsection (1) shall not prohibit business activities that are necessary to enable the credit union to meet the requirements of subsection (2).

(4) A credit union shall deposit with central all deposits and share subscriptions taken before that credit union is approved to commence business and central shall hold those deposits and share subscriptions in the manner prescribed by regulation for the members by whom or on whose behalf they were paid until that credit union commences business.

Name

12. (1) A credit union shall include the words "credit union" or the words "caisse populaire" in its name and the word "Limited" or "Limitee" or the abbreviation "Ltd." or "Ltee" as the last word of that credit union's name.

(2) A credit union shall clearly identify itself and set out its name in legible characters in all contracts, invoices, negotiable instruments, orders, advertising and other representations to the public.

(3) A credit union may carry on business by a name other than its full name, provided that the words "credit union" or "caisse populaire" are included in that name.

(4) A person or association of persons shall not

(a) use the words "credit union" or "caisse populaire" or a derivative or abbreviation of those words as part of its name; or

(b) conduct business in the province in a manner that might lead to the belief that that person or association of persons is carrying on business as a credit union,

unless that person or association of persons is incorporated under this Act or an Act of the Parliament of Canada or of another province of Canada.

(5) Subsection (4) does not apply to the central or the guarantee corporation.

(6) Notwithstanding subsection (1), a credit union existing under the Co-operative Societies Act in force immediately before the commencement of this Act and operating under the title or name of "Co-operative Credit Society" may be continued under this Act in that name.

Name reservation

13. The superintendent may, on the written request of a person and on payment of a fee, reserve for 90 days a name for the use and benefit of persons forming a credit union.

Prohibited names

14. (1) A credit union shall not carry on business under a name

(a) that is identical to the name of an existing or a dissolved credit union except as may be prescribed by regulation;

(b) that, in the opinion of the superintendent, suggests or implies a connection with the Crown or a member of the Royal Family, the Government of Canada, the government of a province or territory of Canada or a department, branch, bureau, service, agency or activity of that government, without the consent in writing of the appropriate authority;

(c) that includes the word "loan", "trust", "mutual", "insurance" or "securities"; or

(d) which in the opinion of the superintendent is contrary to public policy.

(2) A credit union shall not carry on business under a name that is similar to the name of another business, association or corporation if the use of that name by the credit union would, in the opinion of the superintendent, be likely to confuse or mislead, unless the business, association or guarantee corporation consents in writing to its name being given in whole or in part to the credit union and, if required by the superintendent, the business, association or guarantee corporation undertakes to dissolve or to change its name within 6 months after the incorporation of the credit union.

(3) Where a credit union is granted a name subject to an undertaking given under subsection (2) and the undertaking is not carried out within the specified time, the superintendent may direct the credit union to which the name is granted to change its name to a name that complies with this Act and, if the credit union fails to comply with that directive within 60 days after the service of that directive, the superintendent may revoke the name of the credit union and assign to it a name or number and, until changed in accordance with section 126, the name of the credit union is the name or number assigned.

(4) Where a credit union

(a) comes into existence or is continued with a name; or

(b) upon an application to change its name, is granted a name,

that violates this section, the superintendent may direct the credit union to change its name.

(5) Where a credit union is directed under subsection (4) to change its name and fails within 60 days after the service of that directive to change its name to a name that complies with this Act, the superintendent may revoke the name of the credit union and assign to it a name or number and, until changed in accordance with section 126, the name or number of the credit union is the name or number assigned.

(6) Where a credit union has had its name revoked and a name or number assigned to it under subsection (3) or (5), the superintendent shall issue a certificate of amendment showing the new name of the credit union and shall give notice of the change of name in the Gazette.

Pre-incorporation contract

15. (1) Except as provided in this section, a person who enters into a contract in the name of or purportedly on behalf of a credit union before it comes into existence is personally bound by the contract and is entitled to the benefits of it.

(2) A credit union may, within a reasonable time after it comes into existence, by an action or conduct signifying its intention to be bound by it, adopt an oral or written contract made before it came into existence in its name or on its behalf, and on that adoption

(a) the credit union is bound by the contract and is entitled to the benefits of it as if the credit union had been in existence at the date of the contract and had been a party to it; and

(b) a person who purported to act in the name of or on behalf of the credit union ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

(3) Except as provided in subsection (4), whether or not an oral or written contract made before the coming into existence of a credit union is adopted by the credit union, a party to the contract may apply, within a reasonable time after the date of incorporation of the credit union, to the court for an order fixing obligations under the contract as joint or joint and individual or apportioning liability between or among the credit union and a person who purported to act in the name of or on behalf of the credit union and a judge of the court may make an order that he or she considers appropriate.

(4) If expressly provided in the oral or written contract, a person who purported to act in the name of or on behalf of the credit union before it came into existence is not bound by the contract or entitled to the benefits of it.

PART II
CAPACITY AND POWERS

Capacity

16. A credit union has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

Jurisdiction outside province

17. A credit union may, with the approval of the superintendent, carry on its business, conduct its affairs and exercise its powers in a jurisdiction outside the province to the extent that the laws of that jurisdiction permit.

Business of credit unions

18. (1) A credit union may carry on the business of a credit union and may,

(a) receive deposits from and operate chequing services for its members; and

(b) make loans to its members.

(2) A credit union shall not carry on a business other than that appertaining to the business of credit unions and a credit union shall not

(a) engage in the provision of real estate brokerage services;

(b) except as authorized under another Act of the province, execute the office of executor, administrator, guardian of a minor's estate or of a mentally incompetent person or provide services of a fiduciary nature commonly provided by a trust company;

(c) issue securities on behalf of another person or otherwise carry on the business of a securities dealer; and

(d) carry on the business of an insurance company or otherwise act as an insurer, agent, broker or adjuster as defined in the Insurance Adjusters, Agents and Brokers Act.

(3) Notwithstanding subsections (1) and (2), a credit union may in the manner prescribed by regulation, enter into an arrangement with a financial institution or another corporation for the provision of a service offered by that financial institution or other corporation.

Insurance

19. (1) A credit union shall not require, directly or indirectly, that a borrower place insurance for the security of a credit union with a particular insurance agency or company.

(2) Nothing in subsection (1) precludes a credit union

(a) from requiring insurance to be placed by a member for the security of a credit union; or

(b) from entering into those group plans of insurance as may be prescribed by regulation with an insurance agency or company for the security of a credit union or for the benefit of its members.

Subsidiaries and trade

20. (1) A credit union may establish a subsidiary corporation as prescribed by regulation.

(2) Except as provided under this Act, a credit union shall not, directly or indirectly, through a subsidiary or otherwise, deal in goods, wares and merchandise or engage in a trade or other business.

Restrictions

21. (1) It is not necessary for a by-law to be passed in order to confer a particular power on a credit union or its directors.

(2) A credit union shall not carry on a business or exercise a power if it is restricted by its articles, by-laws or this Act from carrying on that business or exercising that power and shall not exercise its powers in a manner contrary to its articles, by-laws or this Act.

(3) An act of a credit union, including a transfer of property to or by a credit union, is not invalid by reason only that the act or transfer is contrary to its articles, by-laws or this Act.

No contravention notice

22. A person is not affected by and shall not be considered to have notice or knowledge of the contents of a document concerning a credit union by reason only that the document has been filed with the superintendent or is available for inspection at an office of the credit union.

Reliance

23. A credit union or a guarantor of an obligation of the credit union may not assert against a person dealing with the credit union or with a person who has acquired rights from the credit union that

(a) this Act, the regulations, articles or by-laws of the credit union have not been complied with;

(b) the persons named as directors in the most recent notice sent to the superintendent under this Act are not the directors of the credit union;

(c) the place named in the most recent notice sent to the superintendent under this Act is not the registered office of the credit union;

(d) a person held out by the credit union as a director, officer or agent of the credit union has not been appointed or does not have authority to exercise the powers or perform the duties that are customary in the business of the credit union or usual for that director, officer or agent;

(e) a document issued by a director, officer or agent of the credit union with actual or usual authority to issue the document is not valid or genuine; and

(f) financial assistance to members or directors or a sale, lease or exchange of all or substantially all of the property of the credit union was not authorized,

except where the person has or, by virtue of that person's position with or relationship to the credit union ought to have, knowledge of that fact.

PART III
REGISTERED OFFICE AND RECORDS

Registered office

24. (1) A credit union shall at all times have a registered office in the place within the province specified in its articles.

(2) A notice of registered office shall be sent to the superintendent together with articles that designate or change the place of the registered office of the credit union.

(3) The directors of a credit union may change the address of the registered office within the place specified in the articles.

(4) A credit union shall file a notice of a change of address with the superintendent, within 15 days after a change of address of its registered office.

Branch office

25. A credit union may establish or relocate a branch office of the credit union as prescribed by regulation.

Records

26. (1) A credit union shall prepare and maintain, at its registered office or at another place in the province designated by the directors, records containing

(a) copies of the articles and the by-laws and all amendments to them;

(b) the executed minutes of meetings and resolutions of members;

(c) a register of directors, officers and committee members setting out the names, residence addresses and principal occupations of all persons who are or have been directors, officers or committee members of the credit union with the dates on which each became or ceased to be a director, officer or committee member;

(d) a members' register setting out the names and the latest known addresses of its members and the number and issue price of the membership shares held by each member; and

(e) the accounting records and the executive minutes of meetings and resolutions of the directors and a committee appointed by the directors.

(2) Notwithstanding subsection (1), where a credit union, satisfies the superintendent,

(a) that it is necessary to keep the records referred to in subsection (1) at a place other than the registered office of the credit union; and

(b) that those records will at all reasonable times be open for inspection by a person entitled to examine them, at the registered office of the credit union or some other place in the province approved by the superintendent,

the superintendent may, on terms and conditions that he or she considers appropriate, authorize the credit union to keep the records at a place other than the registered office.

(3) The superintendent may, on terms and conditions that he or she considers appropriate, vary or revoke an authorization made under subsection (2).

Examination of records

27. (1) The members of a credit union, their agents and legal representatives may examine the records referred to in paragraphs 26(1)(a), (b) and (c) during the normal business hours of the credit union and may take extracts from them without charge.

(2) The members of the credit union, their agents and legal representatives may examine the members' register referred to in paragraph 26(1)(d) during the normal business hours of the credit union and may, on payment of a reasonable fee, receive from the credit union a copy of the members' register.

(3) An application made under subsection (1) shall have attached an affidavit of the applicant that

(a) states the name and address of the applicant;

(b) is made by a director or officer of the corporation if the applicant is a corporation; and

(c) states that the register will not be used by a person except for the purpose relating to the affairs of the credit union.

(4) A person who uses a register for a purpose not related to the affairs of the credit union commits an offence.

(5) A credit union shall make the members' register available at a meeting of members for examination by the members.

(6) The directors of a credit union or the authorized representative of the board of directors may examine the records of the credit union at all reasonable times without charge.

(7) The superintendent or a person authorized by him or her may examine the records of a credit union at all reasonable times without charge.

Form of records

28. (1) All registers and other records required by this Act to be prepared and maintained may be in a bound or loose-leaf form or in a photographic film form, or may be entered or recorded by a system of mechanical or electronic data processing or other information storage device that is capable of reproducing the required information in intelligible written form within a reasonable time.

(2) A credit union and its agents shall take reasonable precautions to

(a) prevent loss or destruction of;

(b) prevent falsification of entries in; and

(c) facilitate detection and correction of inaccuracies in,

the registers and other records required by this Act to be prepared and maintained.

Corporate seal

29. (1) The directors of a credit union may adopt a seal for the credit union, and that seal shall contain the full name of the credit union in legible characters.

(2) An instrument or agreement executed on behalf of a credit union by a director, an officer or an agent of the credit union is not invalid merely because a corporate seal is not affixed to it.

PART IV
CAPITALIZATION AND OPERATING
STANDARDS

Member shares

30. (1) Member equity shares of a credit union shall have an issue price fixed by the articles and that price shall not be less than $5 per share.

(2) A credit union is not limited as to the number of member equity shares it may issue to members.

(3) A member of a credit union shall purchase and hold not fewer than the number of fully paid member equity shares that is prescribed by regulation.

(4) Notwithstanding subsection (3), the by-laws of a credit union may permit or require that members hold more than the number of member equity shares that are prescribed by regulation.

Transitional

31. Member equity shares issued by a credit union operating under the Co-operative Societies Act immediately before the commencement of this Act shall continue to be valid as if issued by a credit union under this Act.

Shares other than members' equity shares

32. (1) In addition to member equity shares, the articles of a credit union may provide for the issuing of surplus shares for the purpose of section 37 and, with the approval of the superintendent, other classes of shares.

(2) If the articles provide for the issuing of classes of shares in addition to member equity shares, there shall be set out in the articles

(a) the maximum number of shares in each class other than surplus shares that the credit union is entitled to issue;

(b) the total consideration to be paid for each class of shares other than surplus shares; and

(c) the rights, privileges, restrictions and conditions, including dividends, attaching to the shares of each class.

(3) The superintendent shall not approve the issuing of a class of shares other than member equity shares or surplus shares if, in the opinion of the superintendent, issuing those shares would

(a) not be consistent with the purpose of a credit union generally;

(b) not be in the financial interest of the credit union; or

(c) increase the risk that the credit union would make a claim against the guarantee corporation.

(4) Member equity shares shall rank behind all other classes of shares issued by the credit union and holders of member equity shares shall not, upon the winding-up or liquidation of a credit union, be entitled to reconsider, in whole or in part, their member equity shares until the amounts outstanding on all other classes of shares have been paid in full.

Share certificates not required

33. A credit union is not required to issue share certificates for member equity shares.

Considerations

34. (1) Member equity shares shall not be issued until the consideration for those shares is fully paid in money.

(2) A credit union shall not issue member equity shares if the proposed consideration for those shares consists in whole or in part of a promissory note or a promise to pay.

Patronage refunds

35. With the approval of the members at the annual meeting of a credit union, that credit union may declare and pay to its members a patronage refund which shall be calculated in accordance with the by-laws of the credit union.

Dividends on shares

36. A credit union may, with the approval of the members at the annual meeting of the credit union and in accordance with its by-laws, declare and pay dividends on shares issued by the credit union.

Purchase of surplus shares

37. A credit union may in its by-laws provide that the whole of a patronage refund or dividend on shares to be paid or credited to a member, or a part of the patronage refund or dividends on shares as may be specified in the by-laws of the credit union, may be applied to purchase on behalf of the member, surplus shares of the credit union, up to the number that may be specified in the by-laws.

Restriction on payment

38. (1) Notwithstanding sections 35 and 36, a credit union shall not pay a patronage refund or a dividend on shares if there are reasonable grounds for believing that

(a) the credit union is, or would after payment be, unable to pay its liabilities as they become due;

(b) the realizable value of the credit union's assets is, or would after the payment be, less than the aggregate of its liabilities and its equity other than retained earnings; or

(c) the equity of the credit union is, or would after the payment be, less than that required under section 54 and the regulations.

(2) If, but for paragraph (1)(c), a credit union would be able to make a payment referred to in subsection (1), the superintendent may, upon the recommendation of the guarantee corporation, authorize a payment of a patronage refund or dividend upon those terms and conditions that he or she considers advisable.

Exception

39. (1) Nothing in section 38 affects the payment of a dividend on shares other than member equity or surplus shares if the dividend is required to be paid in accordance with the terms of a share certificate.

(2) A payment authorized under subsection (1) shall be disclosed in the notes of the financial statements of the credit union.

Liability limited

40. A member is not responsible for an act, default or liability of the credit union or for an engagement, claim, payment, loss, injury, transaction, matter or thing relating to or connected with the credit union.

Remedy

41. This Act shall not curtail, abridge or defeat a remedy for the recovery

(a) from the borrower of money loaned by a credit union in violation of this Act; and

(b) from the member of a credit union of an amount withdrawn in excess of the amount contained in a member's deposit account.

Unclaimed balances

42. If a deposit account contains less than an amount prescribed by regulation and business has not been transacted in connection with the account over a period prescribed by regulation, the credit union may deal with the account in accordance with the regulations.

Member right to withdraw deposits

43. (1) A member may withdraw an amount contained in his or her deposit account together with accrued interest during the normal business hours of the credit union.

(2) Notwithstanding subsection (1), a credit union may require in writing, not more than 90 days' notice in writing of a member's intention to withdraw an amount contained in the member's deposit account.

(3) Subsections (1) and (2) do not apply in relation to deposits placed with a credit union for a stated term or an amount contained in a deposit account on which a bill of exchange payable on demand may be drawn.

Trust funds

44. (1) Except where the credit union is the trustee, a credit union is not bound to see to the execution of a trust, whether express, implied or constructive, to which a share or deposit is subject, and where an account is subject to a trust of which the credit union has notice, the cheque, bill of exchange, withdrawal slip, or receipt of the person

(a) in whose name the account stands; or

(b) who is, according to the document creating the trust, entitled to deal with the trust,

is, notwithstanding this kind of trust, sufficient authorization to and a valid and binding discharge of the credit union and the credit union is not bound to see to the application of money paid in relation to that cheque, bill of exchange, withdrawal slip or receipt.

(2) Unless the instrument of trust permits, an amount contained in a deposit account held by a trustee in trust for a named beneficiary or otherwise may not be charged to secure a loan or obligation.

Partial payment on death

45. Where a member of a credit union dies and there is no executor of a will of the deceased member or administrator of the estate of the deceased member, the credit union may as prescribed by regulation on the receipt of an affidavit or other proof of death and proof of claim as may be required by the credit union, pay an amount prescribed by regulation out of a deposit account of the deceased member to the person who appears to be entitled to the amount of the deceased member's interest and payment made under this section releases the credit union from further liability in relation to the money paid.

Nomination of beneficiary

46. (1) A member of a credit union may, by document, signed by the member, witnessed, and filed with the credit union, nominate a person to whom the member's interest in the credit union is to pass and vest upon the member's death.

(2) The interest of the member referred to in subsection (1) shall, on the death of that member, pass and vest in the person nominated as fully as though passed and vested during the lifetime of the member.

(3) A member of a credit union may vary or revoke a nomination made by the member under subsection (1) by a document, signed by the member, witnessed, and filed with the credit union.

Loans

47. (1) Subject to those terms, conditions, restrictions or limitations as may be established by the guarantee corporation a credit union shall establish, in accordance with the regulations, loan policies in relation to the lending activities of the credit union.

(2) A credit union shall not make loans except in accordance with the regulations and the loan policies established in accordance with subsection (1).

Report

48. The superintendent may require a credit union to report to the guarantee corporation the existence of a deposit made by a member of the credit union where that deposit is greater than an amount prescribed by regulation.

Lien

49. (1) Notwithstanding another provision of this Act, a credit union has a lien on the deposits and shares of a member or other person to whose credit the deposits and shares stand in the records of the credit union, and interest on them, for indebtedness due or accruing due to it by the member or other person or for an obligation in relation to the indebtedness and the deposits and shares may not be withdrawn or redeemed unless the credit union consents.

(2) A credit union may apply the deposits and shares on which it has a lien, and interest on them, to an obligation in relation to the indebtedness without notice to any person.

(3) For the purposes of subsection (2), an indebtedness shall be considered to be in default where

(a) an amount of the principal or interest is not paid on the date on which it becomes due and payable; or

(b) there has been a failure to observe or perform an obligation with respect to the indebtedness.

Overdrafts

50. Except in accordance with the regulations, an officer or employee of a credit union shall not permit the withdrawal of funds from a deposit account of a member if the funds in the account are not sufficient to cover the withdrawal.

Liquid assets

51. (1) A credit union shall maintain liquid assets in accordance with the regulations.

(2) A credit union may make investments for the purpose of meeting the requirements in relation to liquid assets only in accordance with the regulations.

Investments

52. A credit union may make investments in addition to those referred to in subsection 51(2) only in accordance with the regulations.

Doubtful loans

53. A credit union shall maintain an allowance for doubtful loans in accordance with the regulations.

Equity

54. A credit union shall maintain a level of equity in accordance with the regulations.

Borrowing

55. A credit union shall not borrow money in excess of the amount prescribed by regulation.

Matching

56. A credit union shall match the term and return of its investments and loans with the term and return of its members' deposits in the credit union in accordance with the regulations.

Insurance required

57. A credit union shall maintain those types and minimum levels of insurance and bonding coverage as may be required by the guarantee corporation.

Valuation of assets

58. (1) Where, in the opinion of the superintendent, the stated value of the assets of a credit union is greater than their realizable value, the superintendent may require the credit union to take those steps that he or she considers necessary to ensure that the financial position of the credit union is accurately reflected in the records of the credit union.

(2) Where, in the opinion of the superintendent, the realizable value of the assets of a credit union is less than the aggregate of its liabilities and its equity other than retained earnings, he or she may

(a) prohibit the credit union from taking deposits or making payments to the members of the credit union;

(b) limit the payments referred to in paragraph (a) for such period as he or she considers necessary to protect the interests of the members of the credit union; and

(c) take other action that he or she considers necessary to protect the interests of the members of the credit union.

PART V
MEMBERSHIP

Membership

59. (1) The membership of a credit union consists of its incorporators and those persons whose applications for membership are accepted by the directors of the credit union in accordance with this Act and the articles and by-laws of the credit union.

(2) Subject to the by-laws, the directors of a credit union may refuse to accept an application for membership if they are satisfied that it is not in the interest of the credit union to accept the application.

(3) A person under 19 years of age may be accepted as a member of a credit union and shares may be held and money may be received by the credit union in that person's name or in the name of a trustee for that person if the trustee is a member or is eligible to be a member of the credit union.

(4) A credit union may, if provided in its articles and by-laws and in accordance with the regulations, provide associate membership in that credit union.

(5) A credit union shall not be a member or an associate member of another credit union.

Bond of association

60. (1) The articles of a credit union may provide that membership in the credit union shall be limited to groups having a bond of association.

(2) Notwithstanding subsection (1), a member of the credit union who leaves a group having a bond of association may retain membership in the credit union and all the rights and privileges of a member if the by-laws of the credit union so provide.

(3) For the purpose of this section, "bond of association" means a characteristic common to all members of a credit union and which leads them to join together in a credit union.

Membership termination

61. (1) Unless the by-laws otherwise provide, the directors may terminate the membership of a member of a credit union by a resolution passed by a majority of not less than 3/4 of the directors at a meeting called to consider the resolution.

(2) A member whose membership is proposed to be terminated under subsection (1) is entitled to at least 7 days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds on which the membership is proposed to be terminated.

(3) A member whose membership is proposed to be terminated under subsection (1) is entitled to appear and be heard in person or by counsel at a meeting at which the resolution is to be considered.

(4) Within 7 days after a resolution is passed in accordance with subsection (1), the credit union shall, by registered mail, notify the person whose membership is so terminated.

(5) A person whose membership is terminated under subsection (1) may appeal the termination at the next general meeting of the members of the credit union by sending a notice of appeal to the credit union within 14 days after the notice was mailed under subsection (4).

(6) At a meeting of members to which an appeal under subsection (5) is brought, the members shall, by a majority vote, confirm or set aside the resolution of the directors terminating the membership of a member.

(7) The members of a credit union may terminate the membership of a member by special resolution.

(8) A person who appeals a termination of membership in accordance with subsection (5) shall, notwithstanding the resolution terminating membership, continue to be a member of the credit union until the termination is confirmed by a meeting of members under subsection (6).

(9) A person whose membership is terminated under this section shall not again be admitted to membership in the credit union except by a special resolution of the members at a general meeting.

Membership withdrawal

62. (1) A member may withdraw from a credit union on those terms and conditions as this Act and the articles or the by-laws of the credit union may provide.

(2) Provisions in relation to the termination of or withdrawal from membership in a credit union shall not affect the provisions of a contract between a terminated or withdrawing member and the credit union and a provision shall not affect the term for which a person has agreed to place deposits with the credit union.

Remedy preserved

63. The termination of or withdrawal from membership in a credit union does not release a person from a liability to the credit union.

By-laws

64. (1) Subject to the articles of a credit union, the members of a credit union may at an annual meeting or general meeting called for that purpose by special resolution of the members enact, amend or repeal by-laws in relation to those matters authorized or required by this Act to be dealt with in the by-laws of the credit union.

(2) Notwithstanding subsection (1), a by-law and an amendment or a repeal of a by-law is not effective until it is approved by the superintendent.

(3) A proposed by-law or amendment or repeal of a by-law may be sent to the superintendent for approval before its adoption by the members of the credit union.

(4) Where a by-law, amendment or repeal of a by-law is approved by the superintendent before its adoption by the members of a credit union,

(a) the by-law, amendment or repeal of the by-law shall be adopted by the members of the credit union within 30 days after receipt of the approval of the superintendent; and

(b) a certified copy of the adopted by-law or the amendment or repeal of the by-law shall be filed with the superintendent within 30 days after its adoption by the members of the credit union or a later time that may be authorized by the superintendent.

(5) If a credit union fails to comply with subsection (4), the by-law, amendment or repeal is void.

Members bound

65. The articles and by-laws of a credit union bind the credit union and its members.

Place of meetings

66. Meetings of the members of a credit union shall be held at the place within the province provided in the by-laws or, in the absence of a provision, at the place within the province that the directors determine.

Calling meetings

67. (1) The directors of a credit union

(a) shall call an annual meeting of members to be held within 3 months after the end of the fiscal year of the credit union

(i) to consider the annual report of the directors, the financial statements of the credit union and the auditor's report,

(ii) to appoint the auditor,

(iii) to elect directors, and

(iv) to deal with other matters that may properly come before the meeting; and

(b) may call a special meeting of members.

(2) At the request of the directors, the superintendent may extend the time in which the first or a subsequent annual meeting of the credit union shall be held.

Record date

68. The record date for determining the members entitled to receive notice of a meeting of members and entitled to vote at that meeting shall be at the close of business 30 days preceding the day on which the notice is given.

Notice of meetings

69. (1) Notice of the time and place of a meeting of members shall be given not less than 14 days and not more than 30 days before the meeting

(a) to each member entitled to vote at the meeting; and

(b) to the auditor of the credit union.

(2) If a meeting of members is adjourned by one or more adjournments for more than 7 days, notice of the adjourned meeting shall be given as for an original meeting.

(3) All business transacted

(a) at a special meeting of members; or

(b) at an annual meeting of members, except consideration of the annual report of the directors, the financial statements of the credit union, the auditor's report, election of directors, appointment of the auditor and other business authorized by the by-laws to be transacted at an annual meeting,

shall be considered to be special business.

(4) Notice of a meeting of members at which special business is to be transacted shall state

(a) the nature of that business in sufficient detail to permit the member receiving the notice to form a reasoned judgment on it; and

(b) the text of a special resolution to be submitted to the meeting or, if the full text is too lengthy for convenient inclusion in the notice, a summary of the text.

Waiver of notice

70. (1) A member or another person entitled to attend a meeting of members may in any manner waive notice of the meeting, and attendance of the member or other person at the meeting is a waiver of notice of the meeting, except where that person attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called.

(2) An objection made under subsection (1) shall be made at the commencement of the meeting.

Member notice

71. (1) A member entitled to vote at a meeting of members may

(a) submit to the credit union notice of a matter that the member proposes to raise at the meeting, afterwards referred to as a "proposal"; and

(b) discuss at the meeting any matter in respect of which the member would have been entitled to submit a proposal.

(2) A credit union shall set out a proposal in the notice of the meeting at which the proposal is to be presented.

(3) If requested by a member submitting a proposal, the credit union shall include in the notice of meeting or attach to it a statement by the member of not more than 200 words in support of the proposal, and the name and address of the member.

(4) A proposal may include nominations for the election of directors if the election of those nominated as directors would conform with the provisions of this Act, the articles and by-laws of the credit union, but this subsection does not prevent nominations being made at a meeting of members.

(5) A credit union is not required to comply with subsections (2) and (3)

(a) if the proposal is not submitted to the credit union at least 30 days before the anniversary date of the previous annual meeting of members;

(b) if it appears that the proposal is submitted by the member primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the credit union or its directors, officers or members or for a purpose that is not related in a significant way to the business or affairs of the credit union;

(c) if the credit union, at the member's request, included a proposal in a notice of meeting of members held within 2 years preceding the receipt of that request and the member failed to present the proposal at that meeting;

(d) if substantially the same proposal was submitted to the members in a notice of a meeting of members held within 2 years preceding the receipt of the member's request, and the proposal was defeated; or

(e) if the rights conferred by this section are being abused to secure publicity.

(6) A credit union or person acting on its behalf shall not incur liability by reason only of circulating a proposal or statement in compliance with this section.

(7) If a credit union refuses to include a proposal in a notice of meeting, the credit union shall, within 10 days after receiving the proposal, notify the member submitting the proposal of its intention to omit the proposal from the notice of meeting and send to the member a statement of the reasons for the refusal.

(8) On the application of a member claiming to be aggrieved by a refusal under subsection (7), the court may restrain the holding of the meeting to which the proposal is sought to be presented and make another or further order it thinks fit.

(9) The credit union or a person claiming to be aggrieved by a proposal may apply to the court for an order permitting the credit union to omit the proposal from the notice of meeting, and the court, if it is satisfied that subsection (5) applies, may make an order as it thinks fit.

(10) An applicant under subsection (8) or (9) shall give the superintendent notice of the application and the superintendent is entitled to appear and be heard in person or by counsel.

Quorum

72. (1) A quorum at a meeting of members shall be not less than 11 members, provided that the majority of those members are not directors and employees of the credit union.

(2) If a quorum is present at the opening of a meeting of members, the members present may, unless the by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

(3) If a quorum is not present at the opening of a meeting of members, the members present may adjourn the meeting to a fixed time and place but may not transact any other business.

Voting

73. (1) A member of a credit union who is 19 years of age or over may vote at a meeting of members.

(2) A member of a credit union has only one vote on a question that may be voted on at a meeting of members.

Corporate representation

74. (1) If a corporation or association of persons is a member of a credit union, the credit union shall recognize a natural person authorized by a resolution of the directors or governing body of the corporation or association of persons to represent it at meetings of members of the credit union.

(2) Notwithstanding section 75, a natural person authorized under subsection (1) may exercise, on behalf of the corporation or association that person represents, all the powers the corporation or association could exercise if it were a natural person.

Voting by proxy

75. A member shall not vote by proxy at a meeting of members of a credit union.

Joint membership

76. A credit union may in its by-laws provide that 2 or more persons may jointly hold a membership in a credit union but that membership is entitled to only one vote.

Executors and administrators

77. An executor or administrator holding a membership in a credit union in the capacity of executor or administrator shall represent that membership at meetings of the credit union and may vote as a member.

Ballot

78. A credit union may in its by-laws establish procedures to permit members to vote by mail ballot or by other means.

Voting method

79. (1) Unless the by-laws otherwise provide, voting at a meeting of members of a credit union shall be by show of hands except where a ballot is demanded by a member entitled to vote at the meeting.

(2) A member may demand a ballot either before or after a vote by show of hands and the result of the ballot shall be the decision of the members.

Requisition by members to call meeting

80. (1) The directors shall call a special meeting of the members on receipt of a written request specifying the purpose of the meeting from the lesser of 10% of the members or 500 members of the total credit union membership having a right to vote at the meeting but not less than 50 members.

(2) The request referred to in subsection (1), may consist of several documents in the same form, each signed by one or more members and shall state the business to be transacted at the meeting and shall be sent to the registered office of the credit union.

(3) On receiving the request referred to in subsection (1), the directors shall call a meeting of members to transact the business stated in the request, unless the business of the meeting as stated in the request includes a matter described in paragraphs 71(5)(b) to (e).

(4) If the directors do not, within 30 days after receiving the request referred to in subsection (1), call a meeting, a member who signed the request may call the meeting.

(5) A meeting called, held and conducted in accordance with this section is for all purposes a properly called, held and conducted meeting of members of the credit union.

(6) Unless the members otherwise resolve at a meeting called under subsection (4), the credit union shall reimburse the members for the expenses reasonably incurred by them in requesting, calling and holding the meeting.

(7) A request under subsection (4) shall give the superintendent notice of the application and the superintendent is entitled to appear and be heard in person or by counsel.

Meeting called by superintendent

81. (1) If it is impracticable to call a meeting of members of a credit union in the manner in which meetings of members may be called or to conduct the meeting in the manner required by this Act and the by-laws, or for another reason the superintendent thinks fit, the superintendent may order a meeting to be called, held and conducted in a manner that he or she directs.

(2) The superintendent may order that the quorum required by this Act or the by-laws be varied or dispensed with at a meeting called, held and conducted in accordance with this section.

(3) A meeting called, held and conducted in accordance with this section is for all purposes a properly called, held and conducted meeting of members of the credit union.

PART VI
DIRECTORS AND OFFICERS

Directors

82. (1) A credit union shall in its by-laws establish a fixed number of directors, which number shall not be fewer than 5.

(2) The directors of a credit union shall

(a) exercise the powers of the credit union directly or indirectly through the employees and agents of the credit union; and

(b) direct the management of the business and affairs of the credit union.

Qualifications

83. A person who is a citizen of Canada, 19 years of age or older, a member of the credit union and who satisfies the requirements set out in the by-laws of the credit union may be a director, unless he or she

(a) is an undischarged bankrupt person;

(b) is an employee of a credit union, the central or the guarantee corporation;

(c) is not bondable;

(d) is an auditor, or a member of the auditor's firm, of that credit union;

(e) is a parent, child, spouse, brother or sister of an employee of the credit union;

(f) is the solicitor of that credit union;

(g) is a representative of a bargaining agent for the employees of that credit union;

(h) is a public employee whose official duties are concerned with the affairs of credit unions; or

(i) is a person who has a loan with the credit union on which principle or interest is in arrears for a period established by regulation.

Terms of office

84. (1) A director named in the articles holds office from the issue of the certificate of incorporation until the first meeting of members.

(2) The members of a credit union shall, by ordinary resolution at the first meeting of the members and at each succeeding annual meeting of the members at which an election of directors is required, elect directors to hold office for a term established in the by-laws and that term shall not exceed 3 years.

(3) Notwithstanding the provisions of subsection (2), the by-laws of a credit union may provide the manner in which members of a credit union elect directors for a district at a district meeting.

(4) It is not necessary that all directors elected at a meeting of members hold office for the same term.

(5) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of members following that director's election.

(6) Notwithstanding anything contained in this section, if directors are not elected at a meeting of the members, the incumbent directors continue in office until their successors are elected.

Ceasing to hold office

85. (1) A director of a credit union ceases to hold office when he or she

(a) dies or resigns;

(b) is removed from office in accordance with section 86; or

(c) is disqualified under section 83.

(2) A resignation of a director becomes effective at the time a written resignation is received by the credit union, or at the time specified in the resignation, whichever is later.

Removal of directors

86. (1) The members of a credit union may by ordinary resolution at a special meeting remove a director from office.

(2) A vacancy created by the removal of a director from office may be filled at the meeting of the members at which the director is removed or, if not so filled, may be filled under section 88.

Reasons

87. (1) A director who

(a) resigns;

(b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing the director from office; or

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed or elected to fill the office of director instead of that person whether because of that person's resignation or removal or because that person's term of office has expired or is about to expire,

is entitled to submit to the credit union a written statement giving the reasons for the resignation or for opposing an action or resolution proposed for the purposes described in paragraphs (b) and (c).

(2) Where a director resigns under paragraph (1)(a), he or she may request that the credit union send to members of the credit union and the superintendent, a copy of the statement referred to in subsection (1) and where a request is made, the credit union shall immediately comply with that request.

(3) Where a director receives a notice under paragraphs (1)(b) and (c), the credit union shall immediately send a copy of the statement referred to in subsection (1) to members of that credit union and to the superintendent.

(4) A credit union or person acting on its behalf shall not incur liability by reason only of circulating a statement in compliance with subsections (2) and (3).

Vacancy

88. (1) A quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number of directors or from the members' failure to elect the required number of directors.

(2) If the members fail to elect the required number of directors at a meeting, the directors elected at that meeting may exercise all the powers of the directors if the number of directors so elected constitutes a quorum.

(3) If there is a failure to elect the required number of directors at a meeting of members, the directors then in office shall immediately call a meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by a member.

(4) Notwithstanding subsection (1), the articles or by-laws may provide that a vacancy among the directors shall be filled only by a vote of the members.

(5) If a vacancy among the directors is filled in accordance with subsection (1), the appointment shall be ratified at the next meeting of members.

Notice of change of directors

89. (1) Within 15 days after a change of directors occurs, a credit union shall send to the superintendent a notice in the prescribed form setting out the change and the superintendent shall file the notice.

(2) An interested person or the superintendent may apply to the court for an order requiring a credit union to comply with subsection (1), and on the application the court may so order and make any further order it thinks fit.

(3) A director named in the articles or in a notice sent by the credit union to the superintendent under subsection (1) is presumed for the purposes of this Act to be a director of the credit union.

Meetings

90. (1) Unless the articles or by-laws otherwise provide, the directors of a credit union may meet at a place and on notice that the directors may determine.

(2) Unless the articles or by-laws otherwise provide, a majority of the required number of directors constitutes a quorum at a meeting of directors and, notwithstanding a vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

(3) Unless the by-laws otherwise provide, a notice of a meeting of directors need not specify a matter that is to be dealt with at the meeting except where that matter

(a) is a question or matter requiring the approval of the members;

(b) is respecting the filling of a vacancy among the directors;

(c) is respecting the issuance or redemption of any shares of the credit union other than membership shares; or

(d) requires the approval of financial statements referred to in subsection 106(1).

(4) A director may waive a notice of a meeting of directors and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of business on the grounds that the meeting was not lawfully called, provided that the objection is made at the start of the meeting.

(5) Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.

(6) Subject to the by-laws, a director may participate in a meeting of directors or a committee of directors by means of telephone or other communication facilities that permit all persons participating in the meeting to hear each other, and a director participating in the meeting by those means shall be considered for the purposes of this Act to be present at that meeting.

Committees

91. (1) The directors of a credit union may appoint committees and may delegate to those committees the powers of the directors.

(2) The members of a committee appointed by the directors shall be members of the credit union and the chairperson of the committee shall be a director of the credit union.

(3) A committee appointed by the directors shall keep minutes of its proceedings and shall submit to the directors at each meeting of directors the minutes of the committee's proceedings during the period since the last meeting of the directors.

(4) Notwithstanding subsection (1), a committee appointed by the directors shall not

(a) submit to the members a question or matter requiring approval of the members;

(b) fill a vacancy among the directors;

(c) issue or redeem shares, except in the manner and on the terms authorized by the directors; or

(d) approve a financial statement referred to in subsection 106(1).

Credit and audit committees

92. The directors of a credit union shall establish, in accordance with the regulations, an audit committee and a credit committee, and those committees shall perform those duties and have those powers provided for in the regulations.

Validity of acts

93. An act of a director or an officer is valid notwithstanding an irregularity in the election or appointment of, or a defect in the qualifications of, the director or officer.

Resolution

94. (1) A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors or of a committee appointed by the directors

(a) satisfies all requirements of this Act relating to meetings of directors or committees appointed by the directors;

(b) is valid as if it had been passed at a meeting of directors or a committee appointed by the directors; and

(c) is effective from the date specified in the resolution, which shall not be before the date on which the first director signed the resolution.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or of a committee appointed by the directors.

Liability

95. (1) Directors of a credit union who vote for or consent to a resolution authorizing a payment contrary to section 38 or the payment of an indemnity contrary to section 103 are jointly and individually liable to restore to the credit union an amount so paid and not otherwise recovered by the credit union.

(2) Where a loan is made by a credit union to a member in violation of this Act, the person receiving the loan and all directors, officers and members of committees of the credit union who, with knowledge of the violation, made or approved the loan are jointly and individually liable to the credit union for the unpaid balance of the loan, with interest.

(3) A director, an officer or a member of a committee who satisfies a judgment made as a result of an application to the court and under this section is entitled to contribution from all other persons who by virtue of this Act are also liable.

(4) A director, an officer or a member of a committee who is liable under subsection (1) or (2) may apply to the court for an order compelling a member or other recipient to pay money or deliver property to the director, officer or member of a committee that was improperly paid or distributed to the member or other recipient.

(5) An action to enforce a liability imposed by subsection (1) or (2) may not be commenced after 2 years after the date of the resolution authorizing the thing complained of.

Duty to report

96. A director of a credit union who becomes aware that

(a) the credit union is unable to make a lawful payment it is required to make, except with the result that

(i) the credit union would after the payment be unable to pay its liabilities as they become due, or

(ii) the realizable value of the credit union's assets would after the payment be less than the aggregate of its liabilities and its equity other than retained earnings; or

(b) the credit union is financially unsound or conducting its affairs in a manner that tends to increase the risk of a claim upon the guarantee corporation,

shall, within 7 days after becoming aware of it, give written notice of the matter to the superintendent.

Material contracts

97. (1) In this section and section 98, "officer" includes a committee member, the most senior employee of the credit union and an agent of a credit union.

(2) In this section and section 98, "material contract" includes a contract made by a credit union under which the credit union

(a) employs a person as a full-time employee;

(b) retains the services of a person otherwise than as an employee; or

(c) disposes of or acquires property whether by sale, purchase, lease or otherwise, for consideration that exceeds $5,000 in value.

(3) A director or an officer shall be considered to have a material interest in a material contract in which one or more of the following persons is a party or in which any of them have a material interest:

(a) the spouse of the director or officer;

(b) the parent, child, grandparent, grandchild, brother or sister of the director or officer or of the spouse of the director or officer; or

(c) the spouse of a person mentioned in paragraph (b).

(4) A director or an officer shall be considered to have a material interest in a material contract involving another person where the director or officer is

(a) a creditor of that person for a debt in an amount that exceeds $5,000;

(b) a guarantor of the debts of that person in an amount that exceeds $5,000;

(c) the owner or beneficial owner of not less than 20% of the issued shares of a class of shares of that person;

(d) a partner of that person; or

(e) a director or an officer of that person.

(5) For the purpose of this section and section 98, a material contract does not include

(a) an arrangement by way of security for money lent to or obligations undertaken by a director, officer or employee of the credit union for the benefit of the credit union;

(b) a contract relating primarily to the remuneration of directors or officers of the credit union;

(c) a contract for indemnity or insurance under section 103; or

(d) loans made to directors, officers or employees in the ordinary course of the credit union's business and in compliance with this Act, the by-laws and the loan policies of the credit union.

Disclosure

98. (1) A director or officer of a credit union who

(a) is a party to a material contract or proposed material contract with the credit union; or

(b) has a material interest in a contract or proposed contract between a person and the credit union,

is considered to have a conflict of interest with the credit union and shall disclose in writing to the credit union and request to have entered in the minutes of meetings of directors the nature and extent of the interest and shall not participate in a vote conducted by the directors or of a committee of the credit union relating to the material contract or proposed material contract.

(2) The onus is upon the director or officer and the credit union to demonstrate

(a) that the terms of a loan in which the director or officer has a material interest are no more favourable than those offered by the credit union in the ordinary course of business; and

(b) for the purpose of subsection (1), that it is reasonable that the services or property be obtained or supplied and those services or property are normally provided to the public in the ordinary course of business by the director or officer.

(3) A director or officer shall as prescribed by regulation, make the disclosure required by subsection (1) immediately upon the director or officer becoming aware of the conflict of interest.

(4) For the purpose of this section, general notice to the directors of a credit union by a director or officer, declaring that he or she has a material interest in a contract is a sufficient declaration of interest in relation to that contract.

(5) A contract or transaction in which a director or officer has a conflict of interest is neither void nor voidable by reason only of that conflict of interest or by reason only that a director with a conflict of interest is present at or is counted to determine the presence of a quorum of a meeting of directors or a committee of directors that authorized the contract or transaction, if the director or officer disclosed the conflict of interest in accordance with this section, did not participate in the vote to authorize that contract or transaction and the contract or transaction was approved by the directors or the members and it was reasonable and fair to the credit union at the time it was approved.

(6) When a director votes on a resolution in which the director has declared a conflict of interest, the contract or transaction that is the subject of the resolution is valid only if it is approved by not less than 2/3 of the votes cast by the members at a special meeting of the credit union.

(7) Where a director or officer of a credit union fails to disclose a conflict of interest in accordance with this section or participates in a vote which is not subsequently ratified by the members, the court may, upon the application of the credit union or a member of the credit union, set aside the contract or transaction on those terms as it sees fit.

(8) A director or officer of a credit union who, without reasonable cause, fails to disclose a conflict of interest in accordance with this section is guilty of an offence and liable on summary conviction to a fine not exceeding $500 and that director or officer, on conviction, shall cease to hold office and shall not be eligible for election as a director or for appointment as an officer of a credit union for a period of 5 years after the date of the conviction.

(9) An auditor shall immediately report to the board of directors and the superintendent a breach of a provision of this section of which the auditor is aware and, if the board of directors does not act to rectify the breach within a reasonable period of time, the auditor shall immediately report the failure to rectify to the superintendent.

Designation of officers

99. (1) The directors may elect or appoint officers of the credit union, specify their duties and delegate to them powers to manage the business and affairs of the credit union, except powers to

(a) submit to the members a question or matter requiring the approval of the members;

(b) fill a vacancy among the directors;

(c) issue or redeem shares, except in the manner and on the terms authorized by the directors; or

(d) approve financial statements referred to in subsection 106(1).

(2) A director may become an officer of the credit union and a member of a committee.

(3) Two or more offices of the credit union may be held by the same person.

(4) Subsections (1) to (3) are subject to the articles and by-laws of the credit union.

Remuneration and expenses

100. The directors of a credit union shall be paid remuneration and reimbursed for those reasonable expenses incurred in the performance of their duties as may be approved by the members of the credit union at the annual meeting of the credit union and in accordance with the by-laws of the credit union.

Duty of care

101. (1) A director and officer of a credit union, in exercising the powers and discharging the duties of a director or an officer, shall

(a) act honestly and in good faith with a view to the best interests of the credit union; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) A provision in a contract, the articles, the by-laws or a resolution shall not relieve a director or an officer from the duty to act in accordance with this Act.

(3) This section is in addition to and not a derogation from another enactment or rule of law relating to the duty or liability of directors or officers of a credit union.

Dissent

102. (1) A director who is present at a meeting of directors shall be considered to have consented to a resolution passed or action taken at the meeting, unless the director

(a) requests that his or her dissent be recorded in the minutes of the meeting;

(b) sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) sends a dissent by registered mail to the registered office of the credit union immediately after the meeting is adjourned.

(2) A director who votes for or consents to a resolution is not entitled to dissent under subsection (1).

(3) A director who was not present at a meeting at which a resolution was passed or an action was taken shall be considered to have consented to a resolution passed or action taken, unless within 7 days after becoming aware of the resolution the director

(a) causes his or her dissent to be placed with the minutes of the meeting; or

(b) sends a dissent by registered mail to the registered office of the credit union.

(4) A director who relies in good faith on

(a) financial statements of the credit union represented by an officer or the auditor of the credit union to reflect fairly the financial position of the credit union; or

(b) the report of a lawyer, accountant, engineer, appraiser or another person whose profession lends credibility to a statement made by him or her

is not liable under section 95.

Indemnification

103. (1) Except in relation to an action

(a) by or on behalf of the credit union or corporation to procure a judgment in its favour; or

(b) by or on behalf of the superintendent or the guarantee corporation, in which cases the approval of the court must first be obtained,

a credit union may indemnify a director or an officer of the credit union or a person who acts or acted at the credit union's request as a director or an officer of a corporation of which the credit union is or was a member, shareholder or creditor, and his or her heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in relation to a civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or an officer of the credit union or corporation, if the director or officer

(c) acted honestly and in good faith with a view to the best interest of the credit union; and

(d) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing the conduct was lawful.

(2) A person referred to in subsection (1) is entitled to indemnity from the credit union in relation to all costs, charges and expenses reasonably incurred in connection with the defence of civil, criminal or administrative action or proceeding to which that person is made a party by reason of being or having been a director or an officer of a credit union or corporation if the person seeking indemnity

(a) was substantially successful on the merits in defence of the action or proceeding; and

(b) fulfils the conditions set out in paragraphs (1)(c) and (d).

(3) A credit union may purchase and maintain insurance for the benefit of a person referred to in subsection (1) against liability incurred by that person

(a) as a director or an officer of the credit union, except where the liability relates to the failure of that person to act honestly and in good faith with a view to the best interests of the credit union; and

(b) as a director or an officer of another corporation where he or she acts or acted in that capacity at the credit union's request except where the liability relates to the failure to act honestly and in good faith with a view to the best interests of the corporation.

(4) A credit union or a person referred to in subsection (1) may apply to the court for an order approving an indemnity under this section and the court may so order and make a further order it thinks fit.

(5) An applicant under subsection (4) shall give the superintendent and the guarantee corporation notice of the application and the superintendent and the guarantee corporation are entitled to appear to be represented and be heard in person or by counsel.

(6) On an application under subsection (4), the court may order notice to be given to a person and that person is entitled to appear to be represented and be heard in person or by counsel.

PART VII
RETURNS AND FINANCIAL DISCLOSURE

Fiscal year

104. The fiscal year of a credit union ends on December 31 of each year.

Annual returns

105. (1) A credit union shall, within 4 months after the end of each fiscal year, complete and file a return with the superintendent showing, as of the end of the preceding fiscal year,

(a) the name of the credit union;

(b) the address of the registered office of the credit union;

(c) the date when the latest annual meeting of the members of the credit union was held;

(d) the names, residence addresses and principal occupations of the directors of the credit union;

(e) the names and addresses of officers of the credit union and the most senior employee of the credit union; and

(f) other information in relation to the credit union that may be required by this Act or the superintendent.

(2) The return shall be on a form provided by the superintendent and shall be signed and the contents of it shall be certified to be true by a director or an officer of the credit union.

(3) In addition to the return required under subsection (1), the superintendent may require a credit union to file, within a time that he or she specifies, an additional return containing other information that the superintendent may require.

(4) The regulations may prescribe a filing fee payable by a credit union to the superintendent upon the filing of a return under this section, and additional fees may be charged for late filing.

(5) A credit union shall provide to the superintendent and the central, periodic financial reports on or before the dates that are prescribed by regulations.

(6) If as a result of an audit an auditor prepares a management letter highlighting weaknesses and deficiencies in the financial affairs of the credit union and other matters which may affect the well being of the credit union, he or she shall provide a copy of it to the superintendent.

Annual financial statements

106. (1) The directors of a credit union shall place before the members at every annual meeting

(a) financial statements in relation to the preceding fiscal year;

(b) the report of the auditor; and

(c) other information in relation to the financial position of the credit union and the results of its operations as may be required by this Act, the articles or by-laws of the credit union.

(2) The financial statements required under subsection (1) shall, except as otherwise required by this Act or the superintendent, be prepared in accordance with generally accepted accounting principles.

(3) At each annual meeting of members of a credit union the directors shall disclose

(a) the aggregate amount of remuneration paid to all directors;

(b) the aggregate amount paid to all directors as reimbursement for expenses incurred on credit union business;

(c) the details of loans made to directors or officers and to persons with whom directors or officers have a material interest, which do not conform to the credit union's ordinary lending practices for members who are not directors or officers; and

(d) other information that may be required to be disclosed by the regulations.

(4) A credit union shall, before each annual meeting of members, send a copy of the documents referred to in subsections (1) and (3) to the superintendent.

(5) A credit union shall upon request, provide to the guarantee corporation information which the guarantee corporation may reasonably require to enable it to discharge its responsibilities under this Act.

Conditions re: financial statements

107. A credit union shall not issue, publish or circulate copies of financial statements referred to in subsection 106(1) unless the financial statements are

(a) approved by the directors and the approval is evidenced by the signatures of 2 or more of the directors on the statements; and

(b) accompanied by the report of the auditor of the credit union.

Request for documents

108. A credit union shall, on request of a member, provide to the member a copy of the documents referred to in subsection 106(1).

Auditors

109. (1) At the annual meeting of a credit union the members of that credit union shall appoint an auditor who qualifies under subsection (2).

(2) An individual or firm of accountants is qualified to be an auditor of a credit union if

(a) in the case of a natural person, that person is an accountant who

(i) is a member in good standing of an institute or association of accountants incorporated under an Act of the legislature of a province or territory of Canada,

(ii) has experience at a senior level in performing audits of a financial institution, and

(iii) is independent of the credit union; and

(b) in the case of a firm of accountants, the member of the firm designated by the firm to conduct the audit on behalf of the firm is qualified in accordance with paragraph (a).

(3) For the purpose of this section,

(a) independence is a question of fact; and

(b) a person shall be considered not to be independent of the credit union if that person or that person's business partner

(i) is a business partner, director, officer or employee of the credit union, the central or the guarantee corporation or of a director, officer or employee of the credit union,

(ii) beneficially owns or controls, directly or indirectly, a material interest in the shares of the credit union, or

(iii) has been a liquidator, administrator, receiver or trustee in bankruptcy of the credit union within the 2 years preceding that person's proposed appointment as auditor of the credit union.

(4) A person is not disqualified from being an auditor of a credit union by reason only of the person's membership in the credit union.

(5) An auditor who is disqualified under this section shall immediately resign after becoming aware of the disqualification.

(6) Notwithstanding subsection (7), an interested person may apply to the court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

(7) Notwithstanding subsection (5), an interested person may apply to the superintendent for an order exempting an auditor from disqualification under this section and the superintendent may, if satisfied that an exemption would not unfairly prejudice the members, make an exemption order on those terms as he or she thinks fit, and that order may have retroactive effect.

Auditor removal

110. (1) The members of a credit union may at a special meeting remove from office an auditor appointed by them.

(2) A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed.

(3) Notice of a meeting called for the purpose of removing an auditor from office shall be given to the guarantee corporation and the superintendent, and the superintendent and the guarantee corporation are entitled to be represented and heard at that meeting.

Ceasing to hold office

111. (1) An auditor of a credit union ceases to hold office on his or her

(a) death or resignation; or

(b) removal from office in accordance with subsection 109(6) or 110(1).

(2) A resignation of an auditor becomes effective at the time a written resignation is sent to the credit union, or at the time specified in the resignation, whichever is later.

Vacancy

112. (1) The directors shall immediately fill a vacancy in the office of auditor.

(2) If there is not a quorum of directors, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by a member.

(3) Notwithstanding subsection (1), the by-laws of a credit union may provide that a vacancy in the office of auditor shall only be filled by vote of the members.

(4) An auditor appointed to fill a vacancy holds office for the unexpired term of the auditor's predecessor.

Auditor appointed by superintendent

113. (1) If a credit union does not have an auditor, the superintendent may appoint and fix the remuneration of an auditor and the auditor appointed holds office until an auditor is appointed in accordance with section 112.

(2) The remuneration of an auditor appointed under subsection(1) shall be paid by the credit union.

Right and duty to attend meetings

114. (1) The auditor of a credit union shall receive notice of every meeting of members and of the audit committee and is entitled to attend and be heard at those meetings on matters relating to the auditor's duties.

(2) If a director or member of a credit union gives written notice not less than 10 days before a meeting of members requesting the attendance of the auditor or former auditor of the credit union at a meeting, the auditor or former auditor shall attend the meeting at the expense of the credit union and answer questions relating to the auditor's or former auditor's duties as auditor of the credit union.

(3) A director or member who gives a notice under subsection (2) shall send a copy of the notice to the credit union at the same time as sending a notice under subsection (2).

(4) An auditor or former auditor of a credit union who fails without reasonable cause to comply with subsection (2) commits an offence.

Statement of auditor

115. (1) An auditor who

(a) resigns;

(b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing him or her from office; or

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the auditor's term of office has or is about to expire,

is entitled to submit to the credit union and the superintendent a written statement giving the reasons for the resignation or opposing a proposed action or resolution.

(2) The credit union shall send immediately a copy of the statement referred to in subsection (1) to every member entitled to receive notice of a meeting referred to in subsection 114(1).

(3) A person shall not accept an appointment or consent to be appointed as an auditor of a credit union to replace an auditor who has resigned or been removed or whose term has expired or is about to expire until the person has requested and received from the auditor a written statement of the circumstances and the reason the auditor is to be replaced.

(4) Notwithstanding subsection (3), a person otherwise qualified may accept an appointment or consent to be appointed as auditor of a credit union if, within 15 days after making the request referred to in that subsection, a reply is not received.

(5) Unless subsection (4) applies, the appointment as auditor of a credit union of a person who has not complied with subsection (3) is void.

Examinations by auditor

116. (1) The auditor of a credit union shall make those examinations that he or she considers necessary to enable him or her to report on the financial statements referred to in subsection 106(1) and on other financial statements required by this Act, or the articles or by-laws of the credit union to be placed before the members of a credit union.

(2) The auditor's examination referred to in subsection (1) shall, except as otherwise required by this Act, or the superintendent, be conducted in accordance with generally accepted auditing standards.

Superintendent may enlarge scope

117. (1) The superintendent may enlarge or extend the scope of the audit or direct that another or a particular examination be made or procedure be established in a particular case where in his or her opinion the public interest requires.

(2) The credit union shall pay the costs and expenses incurred in connection with a report or audit required under subsection (1).

Right to demand information

118. (1) On the demand of the auditor of a credit union, the present or former directors, officers, committee members, employees or agents of the credit union shall furnish

(a) information and explanations; and

(b) access to records, documents, books, accounts and vouchers of the credit union,

that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under subsection 116(1) and as the directors, officers, committee members, employees or agents are reasonably able to furnish.

(2) On the demand of the auditor of a credit union, the directors of a credit union shall obtain from the present or former directors, officers, employees and agents of a subsidiary of the credit union and furnish to the auditor information or explanations that the present or former directors, officers, employees and agents of the subsidiary are reasonably able to furnish and that, in the opinion of the auditor, are necessary to enable the auditor to make the examination and report required under subsection 116(1).

(3) A person who, in good faith, makes an oral or written communication under this section is not liable in a civil action arising from that communication.

Auditor's report

119. (1) The auditor of a credit union shall make a report in writing

(a) on the financial statements referred to in subsection 106(1) to the members of the credit union not fewer than 10 days before the date of the annual meeting of the members; and

(b) on those other financial statements that may be required by this Act or the articles or by-laws of the credit union to be placed before the members on or before the date that the statement is distributed.

(2) In a report required under subsection(1), the auditor shall state whether, in the auditor's opinion, the financial statements referred to in the report present fairly the financial position of the credit union at the end of the fiscal year or other period to which it relates and the results of the operation of the credit union and changes in its financial position for that fiscal year or other period and whether

(a) the auditor has obtained the information and explanations required;

(b) the examination has been made in accordance with generally accepted auditing standards; and

(d) reliance has been placed on the reports of other auditors.

Audit committee

120. (1) A credit union shall have an audit committee composed of not less than 3 members of the credit union, none of whom are officers of the credit union.

(2) An audit committee shall review the financial statements of the credit union, meet at least annually with the auditor to review the financial performance of the credit union and perform those other functions as may be prescribed by regulation.

(3) The auditor of a credit union or a member of the audit committee may call a meeting of the committee.

(4) A director or an officer of a credit union shall upon becoming aware of an error or misstatement in a financial statement that the auditor or a former auditor has reported upon notify the audit committee and the auditor.

(5) An auditor or former auditor of a credit union who is notified or becomes aware of an error or misstatement in a financial statement that the auditor has reported upon shall, if in the auditor's opinion the error or misstatement is material, inform each director accordingly.

(6) Where, under subsection (5), the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall

(a) prepare and issue a revised financial statement; and

(b) otherwise inform the members and the superintendent.

(7) A director and an officer of a credit union who knowingly fails to comply with subsection (4) or (6) is guilty of an offence.

Duty of auditor

121. (1) It is the duty of the auditor of a credit union to report in writing to the directors of a credit union transactions or conditions that affect, or could affect, the well-being of the credit union and that, in the opinion of the auditor, are not satisfactory and require rectification and the auditor shall, as occasion requires, make a report to the directors where

(a) a change occurs in the circumstances of the credit union that might materially and adversely affect the financial position of the credit union or its ability to carry on or transact business as a going concern;

(b) there has been a violation of this Act;

(c) there has been a violation of the Criminal Code (Canada);

(d) the credit union has entered into a transaction that, in the opinion of the auditor, is not within the powers of the credit union; or

(e) the credit union has adopted or implemented a business or financial practice and procedure that, in the opinion of the auditor, may contribute to material losses by the credit union.

(2) An auditor who makes a report under subsection (1) shall transmit that report in writing to the manager, audit committee and directors of the credit union and the report shall be presented to the next meeting of directors after the receipt of the report, and it shall be incorporated into the minutes of that meeting and the auditor shall, at the time of transmitting the report, furnish a copy of the report to the superintendent.

(3) An auditor is not required to make a report under this section unless the auditor becomes aware of the circumstances described in subsection (1) in the ordinary course of the auditor's duties.

Additional requirements

122. (1) The guarantee corporation may, and shall, when required by the superintendent, require that the auditor of a credit union report to the guarantee corporation and superintendent on the extent of the auditor's procedures in the examination of the financial statements of the credit union and may require that the auditor enlarge or extend the scope of that examination or direct that another particular procedure be performed.

(2) The guarantee corporation may, and shall, when required by the superintendent, require that the auditor of a credit union make a particular examination relating to the adequacy of the procedures adopted by the credit union for the safety of its creditors and members, or another examination that, in the opinion of the guarantee corporation and superintendent, the public interest may require.

(3) A requirement of the guarantee corporation under subsections (1) and (2) shall be in writing.

(4) The auditor of a credit union shall comply with requirements of the guarantee corporation under subsection (1) or (2) and shall make a report to the guarantee corporation in relation to the requirements immediately after complying with them.

(5) Costs or expenses incurred in relation to the requirements of the guarantee corporation or the superintendent under subsection (1) or (2) shall be borne by the credit union.

Access to papers

123. On the request of the superintendent, the auditor shall make available to the superintendent the working papers of the auditor used in conducting an audit or preparing a report under this Act.

Qualified privilege

124. An oral or written statement or report made under this Act by the auditor of a credit union has qualified privilege.

No liability

125. (1) An auditor or former auditor of a credit union who in good faith makes an oral or written statement or report under this Act shall not be liable in a civil action arising from the statement or report.

(2) Subsection (1) does not relieve an auditor or former auditor from liability in connection with a report referred to in paragraph 106(1)(b) or subsection 116(1).

PART VIII
FUNDAMENTAL CHANGES

Amendment of articles

126. (1) Subject to the approval of the superintendent under section 128, the articles of a credit union may be amended by special resolution of the members.

(2) Notwithstanding subsection (1), the articles of a credit union containing a clerical error may be amended by resolution of the directors or by ordinary resolution of the members to correct the error.

Articles to superintendent

127. Where the articles of a credit union are amended under section 126 those articles of amendment shall, within 6 months of the date of the resolution of the members authorizing the amendment, be sent to the superintendent for filling and the superintendent shall refuse to accept amended articles that are not filed within those 6 months.

Certificate of amendment

128. On receipt of articles of amendment, the superintendent may, if satisfied that the amendment is advisable, file the articles and issue a certificate of amendment in accordance with section 232.

Effect of certificate

129. (1) An amendment becomes effective on the date shown in the certificate of amendment and the articles are amended accordingly.

(2) An amendment to the articles of a credit union shall not affect an existing cause of action, claim or liability to prosecution in favour of or against the credit union or its directors, committee members or officers, or a civil, criminal or administrative action or proceeding to which the credit union or its directors, committee members, or officers is a party.

Restated articles

130. (1) The credit union may, and shall when directed by the superintendent, restate the articles of incorporation as amended.

(2) Restated articles of incorporation in prescribed form shall be sent to the superintendent.

(3) On receipt or restated articles of incorporation, the superintendent shall issue a restated certificate of incorporation in accordance with section 232.

(4) Restated articles of incorporation are effective on the date shown in the restated certificate of incorporation and supersede the original articles of incorporation and all amendments to them.

Amalgamation

131. (1) Two or more credit unions may amalgamate and continue as one credit union.

(2) A credit union that is under supervision under Part XIII shall not amalgamate without the consent of its supervisor.

Amalgamation agreement

132. Credit unions proposing to amalgamate shall enter into an agreement with each other setting out the terms and means of effecting the amalgamation and, in particular, setting out

(a) the provisions required to be included in articles of incorporation under section 7;

(b) the address of the registered office of the amalgamated credit union;

(c) the name and address of each proposed director of the amalgamated credit union;

(d) the name, residence address and principal occupation of each proposed director of the amalgamated credit union;

(e) the manner in which the shares of each amalgamating credit union are to be converted into shares of the amalgamated credit union;

(f) if shares of an amalgamating credit union are not to be converted into shares of the amalgamated credit union, the amount of money that the holders of those shares are to receive in addition to or instead of shares of the amalgamated credit union;

(g) the proposed by-laws of the amalgamated credit union; and

(h) details of arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated credit union.

Approval of agreement

133. (1) The directors of each amalgamating credit union shall submit the amalgamation agreement for approval at a meeting of the members of the amalgamating credit unions.

(2) A notice of a meeting of members shall be sent in accordance with section 69 to each member of each amalgamating credit union and shall include or be accompanied by a copy or summary of the amalgamation agreement and shall state that a member is entitled to dissent in accordance with section 139.

(3) An amalgamation agreement is adopted when the members of each amalgamating credit union have approved the amalgamation by a special resolution.

(4) An amalgamation agreement may provide that before the issue of a certificate of amalgamation the agreement may be terminated by the directors of any of the amalgamating credit unions.

Articles of amalgamation

134. (1) Subject to subsection 133(4), after an amalgamation has been adopted under subsection 133(3), articles of amalgamation in the form prescribed by regulation shall be sent to the superintendent.

(2) The articles of amalgamation shall have attached to them an affidavit made under oath or affirmation of a director or an officer of each amalgamating credit union that establishes to the satisfaction of the superintendent that

(a) there are reasonable grounds for believing that

(i) each amalgamating credit union is and the amalgamated credit union will be able to pay its liabilities as they become due, and

(ii) the realizable value of the assets of the amalgamated credit union upon completion of the amalgamation will not be less than the aggregate of its liabilities and its equity other than retained earnings; and

(b) there are reasonable grounds for believing that

(i) a creditor or member of the amalgamating credit unions will not be prejudiced by the amalgamation, or

(ii) adequate notice has been given to all known creditors of the amalgamating credit unions and a creditor does not object to the amalgamation except on grounds that are frivolous or vexatious.

(3) The superintendent may exempt a credit union from the requirements of paragraph (2)(a) if the guarantee corporation consents to the amalgamation.

(4) For the purpose of subparagraph (2)(b)(ii), adequate notice is given if

(a) a notice in writing is sent to each known creditor having a claim against the credit union in an amount that exceeds $1,000;

(b) a notice is given in the Gazette and once in a newspaper published or distributed in a place where each amalgamating credit union has its registered office; and

(c) each notice states that the credit union proposes to amalgamate with one or more specified other credit unions in accordance with this Act unless a creditor of the credit union objects to the amalgamation within 30 days after the date of the notice.

Compulsory amalgamation

135. Where a credit union that is under supervision under Part XIII is ordered by its supervisor to amalgamate in accordance with section 224, the provisions of section 133 and subsection 134(2) do not apply to the credit union which is ordered to amalgamate.

Certificate and effect of amalgamation

136. (1) On receipt of articles of amalgamation, the superintendent may, if satisfied that the amalgamation is advisable, file the articles and issue a certificate of amalgamation in accordance with section 232.

(2) On the date shown in the certificate of amalgamation

(a) the amalgamation of the amalgamating credit unions and their continuance as one credit union becomes effective;

(b) the property of each amalgamating credit union continues to be the property of the amalgamated credit union;

(c) the amalgamated credit union continues to be liable for the obligations of each amalgamating credit union;

(d) an existing cause of action, claim or liability to prosecution remains unaffected;

(e) a civil, criminal or administrative action or proceeding pending by or against any of the amalgamating credit unions may be continued by or against the amalgamated credit union;

(f) a conviction against, or ruling, order or judgment in favour of or against an amalgamating credit union may be enforced by or against the amalgamated credit union;

(g) the articles of amalgamation shall be considered to be the articles of incorporation of the amalgamated credit union and the certificate of amalgamation shall be considered to be the certificate of incorporation of the amalgamated credit union;

(h) on the filing of a copy of the certificate of amalgamation, certified as a true copy by the superintendent, in a land titles registry or other recording office, all the lands, charges on land, estates, real, personal or mixed real and personal property, effects, rights, credits, judgments, assignments and rights enforceable by legal action of every description belonging to the amalgamating credit unions are transferred and vested in the amalgamated credit union without further act, conveyance or other deed; and

(i) the members of the amalgamating credit unions become members of the amalgamated credit union and the shares held in the amalgamating credit unions become shares in the amalgamated credit union subject to the terms of the amalgamation agreement.

Extraordinary sale, lease or exchange

137. (1) A sale, lease or exchange of all or substantially all of the property of a credit union requires the approval of the members in accordance with this section.

(2) A notice of a meeting of members called under subsection (1) shall be sent in accordance with section 69 to each member and shall

(a) include or be accompanied by a copy or summary of the agreement of sale, lease or exchange; and

(b) state that a member is entitled to dissent in accordance with section 139.

(3) At the meeting held in accordance with a notice referred to in subsection (2), the members may by special resolution approve the sale, lease or exchange and may fix or authorize the directors to fix a term or condition of it.

(4) A sale, lease or exchange referred to in subsection (1) is adopted when the members have approved the sale, lease or exchange.

(5) The directors of a credit union may, if authorized by the members approving a proposed sale, lease or exchange, and subject to the rights of third parties, abandon the sale, lease or exchange without further approval of the members.

Approval of superintendent

138. (1) The credit union shall, before the completion of a sale, lease or exchange referred to in section 137, obtain the approval of the superintendent.

(2) An approval shall not be granted under subsection (1) unless the superintendent has received an affidavit made under oath or affirmation of a director or officer of the credit union proposing to sell, lease or exchange its property establishing, to the satisfaction of the superintendent, that there are reasonable grounds for believing that

(a) the sale, lease or exchange of the property will not increase the likelihood of a claim upon the guarantee corporation;

(b) creditors, including shareholders of the credit union who are not members, will not be prejudiced by the sale, lease or exchange of the property; and

(c) adequate notice has been given to all known creditors of the credit union and a creditor does not object to the sale, lease or exchange of the property otherwise than on grounds that are frivolous or vexatious.

(3) For the purpose of subsection (2), adequate notice is given if

(a) a notice is published once in the Gazette and once in a newspaper published or distributed in the place where the credit union has its registered office; and

(b) each notice states that the credit union proposes to sell, lease or exchange all, or substantially all of its property under section 139, unless a creditor or the credit union objects to the sale, lease or exchange within 30 days from the date of the notice.

(4) The Bulk Sales Act does not apply to a sale, lease or exchange of the property of a credit union.

Dissent

139. (1) A member of a credit union may dissent if the credit union resolves to

(a) change its name;

(b) amalgamate with another credit union under section 133;

(c) sell, lease or exchange all or substantially all its property under section 137; and

(d) add, change or remove a provision that is set out in the articles.

(2) A dissenting member shall send to the credit union, at or before a meeting of members at which a resolution referred to in subsection (1) is to be voted on, a written objection to the resolution but, where the dissenting member fails to send the written objection as required, the dissenting member does not lose the right to dissent if the credit union failed to give the dissenting member notice of the purpose of the meeting or of the right to dissent.

(3) The credit union shall, within 10 days after the members adopt the resolution,

(a) send to each member who has filed an objection under section (2), a notice that the resolution has been adopted, but notice is not required to be sent to a member who withdraws an objection; and

(b) send to the superintendent a copy of the resolution and copies of written objections received by the credit union under subsection (2).

(4) A resolution in respect of which written objection has been sent to the credit union under subsection (2) shall not be effective until approved by the superintendent.

(5) The superintendent may require as a condition of approval under subsection (4) that a part or all of the indebtedness or other liability of the credit union to the dissenting member be paid or satisfied on those terms that the superintendent may stipulate.

Reorganization

140. (1) In this section, "reorganization" means the reorganization of a credit union in accordance with a court order made under

(a) section 202;

(b) the Bankruptcy Act (Canada), approving a proposal; or

(c) any other Act of the Legislature that affects the rights of the credit union, its members or creditors.

(2) If a credit union is subject to a reorganization, its articles may be amended by the order to effect a change that might lawfully have been made by an amendment under section 126.

(3) Where a reorganization is made, the court may also

(a) authorize the issue of debt obligations of the credit union and fix the terms of them; and

(b) appoint directors in place of or in addition to all of the directors then in office.

(4) After a reorganization has been made, articles of reorganization in prescribed form shall be sent to the superintendent.

(5) On receipt of articles of reorganization, the superintendent shall file the articles and issue a certificate of amendment in accordance with section 232.

(6) A reorganization becomes effective on the date shown in the certificate of amendment and the articles of incorporation are amended accordingly.

PART IX
DISSOLUTION, LIQUIDATION AND
REVIVAL

Voluntary dissolution

141. (1) A credit union that does not have property and liabilities may be dissolved by special resolution of the members.

(2) A credit union that has property or liabilities or both may be dissolved by special resolution of the members if

(a) by the special resolution the members authorize the directors to cause the credit union to distribute any property and discharge liabilities; and

(b) the credit union has, under section 137, sold its property, distributed residual property and discharged all of its liabilities.

(3) A credit union which is being dissolved under this section shall prepare articles of dissolution in accordance with section 142 and that section applies in relation to the dissolution.

Voluntary liquidation and dissolution

142. (1) The directors, or a member in accordance with section 71, may propose the voluntary liquidation and dissolution of a credit union.

(2) Notice of a meeting of members at which voluntary liquidation and dissolution is to be proposed shall set out the terms of the liquidation and dissolution.

(3) A credit union may be liquidated and dissolved by special resolution of the members.

(4) A statement of intent to dissolve in prescribed form shall be sent to the superintendent.

(5) On receipt of a statement of intent to dissolve, the superintendent, if satisfied that the credit union will be able to discharge all of its obligations and liabilities before dissolution, shall issue a certificate of intent to dissolve in accordance with section 232.

(6) Where a certificate of intent to dissolve is issued, the credit union shall cease to carry on business except to the extent necessary for the liquidation, but its legal existence continues until the superintendent issues a certificate of dissolution.

(7) After a certificate of intent to dissolve is issued, the credit union shall

(a) immediately give notice of the dissolution to be sent to each known creditor of the credit union;

(b) immediately give notice in the Gazette and once in a newspaper published or distributed in the place where the credit union has its registered office and take reasonable steps to give notice of the dissolution in every jurisdiction where the credit union carries on business;

(c) proceed to collect its property, to dispose of properties that are not to be distributed in kind to its members, to discharge all its obligations and to do all other acts required to liquidate its business; and

(d) after giving the notice required under paragraphs (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, in accordance with the provisions of the special resolution authorizing the dissolution.

(8) At any time after issue of a certificate of intent to dissolve and before a certificate of dissolution is issued, a certificate of intent to dissolve may be revoked by sending to the superintendent a statement of revocation of intent to dissolve in prescribed form, if the revocation is approved in the same manner as the resolution under subsection (3).

(9) On receipt of a statement of revocation of intent to dissolve, the superintendent shall issue a certificate of revocation of intent to dissolve in accordance with section 232.

(10) On the date shown in the certificate of revocation of intent to dissolve, the revocation is effective and the credit union may continue to carry on its business.

(11) If a certificate of intent to dissolve has not been revoked and the credit union has complied with subsection (7), the credit union shall prepare articles of dissolution.

Articles of dissolution and certificate

143. (1) Articles of dissolution in the form prescribed by regulation shall be sent to the superintendent.

(2) On receipt of articles of dissolution, the superintendent shall issue a certificate of dissolution in accordance with section 232.

(3) The credit union ceases to exist on the date shown in the certificate of dissolution.

Dissolution by superintendent

144. (1) The superintendent may dissolve a credit union by issuing a certificate of dissolution in accordance with section 232

(a) where a credit union is in default for a period of 2 consecutive years in sending to the superintendent or the guarantee corporation a notice or document required by this Act;

(b) where a credit union is in default in sending to the superintendent or the guarantee corporation a fee or assessment required by this Act; or

(c) where the superintendent has reasonable cause to believe that a credit union is not carrying on business.

(2) Notwithstanding subsection (1), the superintendent shall not dissolve a credit union under this section until

(a) the credit union has been given 90 days' notice of the superintendent's decision to dissolve the credit union; and

(b) a notice of the decision to dissolve the credit union has been given not less than 30 days before the date the superintendent may dissolve the credit union in the Gazette and in other publications as the superintendent considers appropriate.

(3) Where a credit union notifies the superintendent in writing that it is not carrying on business or is not in operation, paragraph (2)(a) does not apply and the superintendent may give a notice in compliance with paragraph (2)(b).

(4) Unless the credit union remedies the default, cause is shown as to why the credit union should not be dissolved or an order is made by a court under section 145, the credit union shall be considered to be dissolved on the date specified in the notice under paragraph (2)(b) and the superintendent shall issue a certificate of dissolution in accordance with section 232.

Application to court

145. (1) A member of a credit union or the superintendent may apply to the court for an order to liquidate and dissolve a credit union and if

(a) the court is satisfied that

(i) an act or omission of the credit union effects a result,

(ii) the business or the affairs of the credit union are or have been carried on or conducted in a manner, or

(iii) the powers of the directors of the credit union have been exercised in a manner,

that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of a depositor, shareholder, creditor, director or officer;

(b) the court is satisfied that the credit union is

(i) not fulfilling the purpose of a credit union generally,

(ii) carrying on business in violation of the restrictions contained in its articles or this Act, or

(iii) not organized or operated in accordance with this Act; or

(c) the court is satisfied it is just and equitable that the credit union should be liquidated and dissolved,

the court may order that the credit union be placed under the supervision of a supervisor for the purposes of liquidation and dissolution.

(2) On application under this section, the court may make an order, in addition to the order under subsection (1), as it thinks fit.

(3) On receipt of an order under subsection (1), the superintendent shall

(a) give notice of the order in the Gazette; and

(b) issue a certificate of dissolution in accordance with section 232 after

(i) all obligations of the credit union are discharged and all its property distributed or disposed of, and

(ii) he or she has given a final report to the court.

Custody of records

146. The guarantee corporation shall retain the documents and records of a dissolved credit union for 6 years immediately following the effective date of the credit union dissolution.

Effect of dissolution

147. (1) In this section, "member" includes the heirs and legal representatives of a member.

(2) Notwithstanding the dissolution of a credit union under this Act,

(a) a civil, criminal or administrative action or proceeding commenced by or against the credit union before its dissolution may be continued as if the credit union had not been dissolved;

(b) a civil, criminal or administrative action or proceeding may be brought against the credit union within 2 years after its dissolution as if the credit union had not been dissolved; and

(c) a property that would have been available to satisfy a judgment or order if the credit union had not been dissolved remains available for that purpose.

(3) Service of a document on a credit union after its dissolution may be effected by serving the document on a person named as a director in the most recent notice sent to the superintendent under this Act.

(4) Notwithstanding the dissolution of a credit union, a member to whom property has been distributed is liable to a person claiming under subsection (2) to the extent of the amount received by that member on the distribution, and an action to enforce that liability may be brought within 2 years after the date of the dissolution of the credit union.

(5) A court may order an action referred to in subsection (4) be brought against the persons who were members, subject to those conditions as the court thinks fit and, if the plaintiff's claim is established, the court may refer the proceedings to a referee or other officer of the court who may

(a) add as a party to the proceedings each person found by the plaintiff who was a member or shareholder;

(b) determine, subject to subsection (4), the amount that each person who was a member or shareholder shall contribute towards satisfaction of the plaintiff's claim; and

(c) direct payment of the amounts so determined.

Unclaimed property

148. (1) Upon the dissolution of a credit union, the portion of the property distributable to a creditor, shareholder or member who cannot be found shall be converted into money and paid to the guarantee corporation.

(2) A payment under subsection (1) is considered to be in satisfaction of the debt to or claim of the creditor, shareholder or member.

(3) If it is established that a person is entitled to money paid to the guarantee corporation under this Act, the guarantee corporation shall pay the amount of that money to that person.

(4) If after the dissolution of a credit union it is established that a person is entitled to receive a document for registration in the registry of deeds or other registry executed by that credit union, the guarantee corporation shall execute the documents on behalf of the dissolved credit union.

(5) A document executed by the guarantee corporation under subsection (4) shall be accepted for registration in the registry of deeds or other registry, if the guarantee corporation has placed an explanation for its actions upon the document and has otherwise complied with the requirements of the registry of deeds or other registry.

(6) Subject to this section and section 147, property of a credit union that has not been disposed of at the date of its dissolution vests in the guarantee corporation.

(7) The costs of liquidation shall be paid out of the property of the credit union.

Revival

149. (1) Where a credit union is dissolved under section 141, 142 or 144, an interested person may apply to the superintendent to have the credit union revived.

(2) Articles of revival in prescribed form shall be sent to the superintendent.

(3) Where a credit union is dissolved on the order of the court, an interested person may apply to the court to have the credit union revived.

Certificate of revival and effect

150. (1) On receipt of articles of revival or an order of the court to revive the credit union, the superintendent shall issue a certificate of revival in accordance with section 232.

(2) A credit union is revived as a credit union under this Act on the date shown on the certificate of revival, and after that date the credit union, subject to those reasonable terms as may be imposed by the court or the superintendent and to the rights acquired by a person after its dissolution, has all the rights and privileges and is liable for the obligations that it would have had if it had not been dissolved.

Return of property on revival

151. If a credit union is revived under section 150, property other than money that vested in the guarantee corporation under section 148 that has not been disposed of shall be returned to the credit union and there shall be paid to the credit union by the guarantee corporation

(a) an amount equal to money received by the guarantee corporation under section 148; and

(b) where property other than money vested in the guarantee corporation under section 148 and that property has been disposed of, an amount equal to the lesser of

(i) the value of the property at the date it vested in the guarantee corporation, and

(ii) the amount realized by the guarantee corporation from the disposition of the property.

Effect of Bankruptcy Act (Canada)

152. (1) This Part does not apply to a credit union that is bankrupt within the meaning of the Bankruptcy Act (Canada).

(2) Proceedings taken under this Part to dissolve or to liquidate and dissolve a credit union shall be stayed if a credit union becomes subject to or takes a proceeding under the Bankruptcy Act (Canada).

PART X
THE CREDIT UNION CENTRAL OF
NEWFOUNDLAND AND LABRADOR

Application

153. (1) This Part applies to the central.

(2) Part III, except section 25, sections 35, 36, 41, 49 and 54, and Part VII apply, with the necessary changes, to the central.

Central continued

154. (1) The Credit Union Central of Newfoundland and Labrador established under the Co-operative Societies Act in force immediately before the commencement of this Act is continued as a corporation under this Act.

(2) The directors and officers of the central referred to in subsection (1) who held office immediately before the commencement of this subsection continue in office until their successors are appointed or elected in accordance with this Act.

(3) On the commencement of this Act

(a) the central

(i) becomes subject to this Act,

(ii) continues to be the owner of its property, and

(iii) continues to be liable for its obligations;

(b) an action, claim or prosecution commenced immediately before the commencement of this Act and involving the central is unaffected;

(c) a civil, criminal or administrative action or proceeding pending by or against the central may be continued by or against the central; and

(d) a conviction against, or ruling, order or judgment in favour of or against the central may be enforced by or against the central.

Prohibition

155. A person other than the central shall not carry on the business of a central in the province.

Articles

156. Within one year after the commencement of this Act, the central shall file with the superintendent articles of continuance in the form prescribed by regulation, setting out

(a) the name of the central;

(b) the place in the province where the registered office of the central is situated;

(c) the name, residence address and principal occupation of each director of the central; and

(d) restrictions on the business that the central may carry on,

and providing for all other matters which by this Act are required to be dealt with in the articles of the central.

Purpose

157. (1) The purposes of the central are to

(a) receive and manage deposits made by its member credit unions for the purpose of meeting the liquidity requirements of those credit unions;

(b) receive and manage deposits made by its member credit unions in addition to those deposits referred to in paragraph (a);

(c) develop and provide to its member credit unions, financial services and other services which, by their nature, can be most effectively provided by the central, including advisory, educational and research services;

(d) promote sound business and financial policies and procedures, including those relating to lending activities, for the benefit of its member credit unions and to assist those credit unions in the implementation of those policies and procedures;

(e) promote the organization, development and welfare of credit unions in the province;

(f) encourage co-operation among co-operatives and credit unions in the province; and

(g) do those things that may be required or authorized by this Act.

(2) The central, with the approval of the superintendent may contract with a central of another province or territory of Canada or the Credit Union Central of Canada to carry out the purposes referred to in subsection (1).

Powers of a natural person

158. (1) The central has the capacity rights, powers and privileges of a natural person.

(2) Subject to the approval of the superintendent, the central has the capacity to carry on its business, conduct its affairs and exercise its powers in a jurisdiction outside the province to the extent that the laws of that jurisdiction permit.

Duty to act within powers

159. (1) It is not necessary for a by-law to be passed in order to confer a particular power conferred by this Act on the central or its directors.

(2) The central shall not carry on business or exercise power which it is restricted by its by-laws from carrying on or exercising, nor shall the central exercise powers in a manner contrary to its by-laws.

(3) An act of the central is not invalid by reason only that the act is contrary to its by-laws or this Act.

Other duties

160. The central may do all things necessary or incidental to the attainment of its purposes, and may, in addition,

(a) carry out those other duties and activities in relation to credit unions as the central and its member credit unions agree upon or as may be set out in the by-laws of the central; and

(b) assist credit unions in carrying out recommendations or orders made by the guarantee corporation or the superintendent in relation to credit unions.

Investments

161. The central

(a) shall invest, in accordance with the regulations, those amounts provided to the central by its member credit unions for the purpose of meeting the liquidity requirements of its member credit unions; and

(b) may make other investments only in accordance with the regulations.

Fees

162. Subject to those terms and conditions as may be specified in the by-laws, the central may levy and collect from its member credit unions that amount of money in the form of fees as may be required by the central to enable it to carry out its purposes under this Act.

Shares

163. (1) The central is authorized to issue to its members an unlimited number of common shares that shall have an issue price of $5 each.

(2) Members and associate members of the central shall purchase and hold those numbers of shares in the central as may be required by the by-laws.

(3) The central shall not be required to issue share certificates.

Classes of shares

164. In addition to common shares, the articles of the central may provide for the issuing to its members and associate members of more than one class of shares, and if the articles provide, there shall be set out the maximum number of shares in each class, other than common shares, that the central is entitled to issue, the total consideration to be paid for each class of shares, and the rights, privileges, restrictions, conditions including dividends, attached to the shares of each class.

Additional share purchase

165. The central may, in its by-laws, provide that in each fiscal year, the whole or a part of a patronage refund credited to a member or associate member as may be prescribed in the by-laws be applied to purchase on behalf of the member or associate member additional shares of the central, up to the number that may be specified in the by-laws.

Prohibition

166. The central shall not pay a dividend on, or redeem shares if there are reasonable grounds for believing that

(a) the central is, or would be, unable to pay its liabilities as they become due; or

(b) the realizable value of the central's assets is, or would be, less than the aggregate of

(i) its liabilities, and

(ii) the amount that would, at that time, be required to pay the holders of shares that have a right to be paid, on a redemption or in a liquidation, rateably with or prior to the holders of the shares to be purchased or reconsidered.

Membership

167. A credit union shall be a member of the central.

Associate members

168. (1) The central may, in its by-laws, permit persons who are not credit unions to become associate members of the central upon those terms and conditions that are set out in its by-laws.

(2) An associate member of the central has only those rights and privileges that are specifically granted to associate members in the by-laws of the central.

Delegates

169. (1) The powers of the members of the central are vested in delegates who shall be elected or appointed by the credit union members of the central in a manner prescribed in the by-laws of the central.

(2) Delegates who are elected or appointed in accordance with the by-laws of the central shall exercise fully and completely the powers of the members of the central and a meeting of the delegates of the central has the same effect as a meeting of the members of the central.

(3) A delegate has only one vote on a question that may be voted on at a meeting of the central.

Liability

170. A member or associate member is not responsible for a default or liability of the central or for an engagement, claim, payment, loss, injury, transaction, matter or thing relating to or connected with the central.

By-laws

171. (1) The by-laws of the central shall provide for a matter required by this Act to be included in those by-laws and shall provide for the

(a) qualifications, conditions and method of applying for and terminating membership or associate membership;

(b) location of meetings of delegates, the mode of holding meetings and the quorum at meetings;

(c) procedure by which members or delegates call a special meeting of delegates;

(d) enactment, amendment or repeal of by-laws at an annual meeting or general meeting called for that purpose;

(e) right of delegates to vote by ballot, mail or other means and the manner, form and effect of votes at meetings;

(f) election, term of office, removal of and filling of vacancies among directors, committee members and officers, their powers, duties and remunerations;

(g) procedure and quorum at meetings of board of directors;

(h) establishment, maintenance and relocation of a registered office and branch offices for the central wherever it is considered necessary or appropriate;

(i) establishment of the fiscal year end of the central;

(j) incorporation and ownership of subsidiary companies by the central;

(k) investment and use of the assets of the central;

(l) loan of money to its members or associate members;

(m) borrowing or raising or securing the payment of money;

(n) charging, hypothecation, mortgaging or pledging the real and personal property of the central;

(o) issuing of debt obligations by the central;

(p) entering into agreements with other centrals to accept deposits from and provide services to credit unions; and

(q) other matters which, by this Act, are required to be dealt with in the by-laws of the central.

(2) Section 64 applies, with the necessary changes, to the adoption of by-laws by the central.

(3) The superintendent shall approve a by-law enacted by the central if the superintendent is satisfied that the by-law conforms with this Act and is consistent with the purposes of the central.

(4) The by-laws of the central bind the central and its members.

Directors

172. (1) The central shall, in its by-laws, establish a fixed number, or a minimum and maximum number, of directors for the central.

(2) The directors of the central shall

(a) exercise the powers of the central directly, or indirectly through the employees and the agents of the central; and

(b) direct the management of the business and affairs of the central.

Qualifications

173. A citizen of Canada who is a delegate of a credit union and 19 years of age or older except

(a) an undischarged bankrupt person;

(b) an employee, auditor or solicitor of the central or the guarantee corporation;

(c) a person who is not bondable;

(d) a public employee whose official duties are concerned with the affairs of the central or credit unions;

(e) a delegate of a member which fails to comply with the requirements set out in the by-laws of the central; and

(f) a person who has a loan with a credit union for which the repayment of principal and interest is in arrears for the period established by regulation,

may be a director of the central.

Information

174. The central shall, upon request, provide to the guarantee corporation the information concerning credit unions which the guarantee corporation may reasonably require to enable the guarantee corporation to discharge its responsibilities under this Act.

PART XI
CREDIT UNION DEPOSIT GUARANTEE CORPORATION

Application

175. This Part applies to the Credit Union Deposit Guarantee Corporation.

Continuation

176. The Credit Union Deposit Guarantee Corporation existing under the Co-operative Societies Act immediately before the commencement of this Act is continued subject to the provisions of this Act, and the members of the board of the guarantee corporation continue in office until their successors are appointed.

Purposes

177. The purposes of the guarantee corporation are:

(a) to provide, for the benefit of persons having deposits with credit unions in the province, deposit insurance against loss of part or all of those deposits by making payments to the depositors to the extent and in the manner authorized by this Act;

(b) in those circumstances that the guarantee corporation considers appropriate, to provide assistance to credit unions for the purpose of stabilization or for the orderly liquidation of a credit union;

(c) to protect deposits in credit unions against impairment arising from financial losses and insolvency by

(i) promoting the development and implementation of sound business and financial policies and procedures by credit unions, and

(ii) establishing and implementing loss prevention programs and other controls;

(d) to perform all duties delegated to it by the superintendent;

(e) to act as supervisor of a credit union; and

(f) to do those other things as may be required or authorized by this Act or the regulations.

Capacity

178. The guarantee corporation has the capacity, rights, powers and privileges of a natural person.

Powers

179. The guarantee corporation may

(a) determine the amounts of money to be levied and collected from credit unions for the purpose of section 197;

(b) borrow money on the credit of the guarantee corporation or on bills of exchange or promissory notes drawn, made, accepted or endorsed by or on behalf of the guarantee corporation and pledge as security any of the assets of the guarantee corporation;

(c) enter into an agreement or arrangement with a person relating to

(i) the stabilization of credit unions,

(ii) the merger, amalgamation and winding up of a credit union,

(iii) financial assistance that it considers necessary to meet the requirements of its operations, and

(iv) other matters as it considers appropriate for the attainment of its purposes;

(d) apply to the minister for loans or guarantees of loans to assist it in carrying out its purpose;

(e) make or cause to be made those examinations and inquiries in relation to credit unions and those actuarial or similar studies as the guarantee corporation considers appropriate;

(f) guarantee loans made by third parties to credit unions and take security for those guarantees;

(g) make investments in relation to the deposit guarantee fund or have those investments made;

(h) assume or purchase the liabilities or assets of credit unions on their liquidation or dissolution;

(i) establish terms, conditions, restrictions and limitations in relation to the lending activities of credit unions and the loan policies to be established by credit unions;

(j) issue directives in relation to sound business and financial policies and procedures to be followed by credit unions including directives in relation to those matters referred to in paragraph (i);

(k) make available to credit unions assistance including financial assistance for the purpose of stabilization on terms and conditions that it considers appropriate;

(l) assume the costs of the winding up of credit unions;

(m) enter into an agreement with the central where the central is authorized to carry out those duties and activities on behalf of the guarantee corporation that may be specified in the agreement;

(n) engage employees, enter into agreements or arrangements and incur those costs and expenses that are required to carry out the purposes of the guarantee corporation;

(o) arrange compulsory insurance programs for credit unions or insurance coverage on behalf of those credit unions;

(p) require credit unions to make reports and specify the contents, frequency and form of those reports;

(q) maintain a long term unclaimed balance account in accordance with this Act;

(r) administer the regulations under this Act as delegated by the minister; and

(s) do those other things that may be necessary or incidental to the attainment of its purposes.

Board

180. (1) The affairs of the guarantee corporation shall be administered by a board of directors of not more than 6 members who shall be appointed by the minister.

(2) The directors appointed under subsection (1) shall include

(a) 3 persons nominated by the minister in accordance with the regulations; and

(b) 3 persons nominated by the board of directors of the central provided that those persons are not employees of a credit union.

(3) The members appointed under paragraph (2)(b) shall serve for a term of 3 years and shall continue in office until replaced.

Officers

181. (1) The chairperson and the secretary treasurer of the board of directors of the guarantee corporation shall be appointed in accordance with the regulations from among directors nominated by the minister under paragraph 180(2)(a).

(2) The vice-chairperson of the board of directors of the guarantee corporation shall be appointed by the board from among its members who were nominated by the central under paragraph 180(2)(b).

(3) The board of directors of the guarantee corporation shall appoint those officers and committees it considers necessary to fulfil the purpose of the guarantee corporation under this Act.

(4) Notwithstanding paragraph 186(2)(b), employees required to exercise the powers and duties of the guarantee corporation shall be considered to be employees of the government of the province, shall be employed in the manner required by law and the board of directors may determine the duties of those employees.

Vacancy

182. Where a vacancy occurs in the board of the guarantee corporation, the minister shall fill the vacancy in accordance with section 180.

Office ceases

183. A member of the board of a guarantee corporation ceases to hold office upon

(a) death or resignation;

(b) becoming disqualified from holding the office; or

(c) being removed from office by the minister.

Management

184. The board of directors of the guarantee corporation shall

(a) exercise the powers of the guarantee corporation directly, or indirectly through its employees and agents; and

(b) direct the management of the business and affairs of the guarantee corporation.

Quorum

185. (1) A majority of the members of the board of directors of the guarantee corporation constitutes a quorum.

(2) The agreement of the majority of the members of the board of directors of the guarantee corporation present at a meeting of that board shall be necessary for a decision to be valid.

(3) The chairperson may vote as a director at a meeting of the board of directors of the guarantee corporation and where there is an equality of votes, he or she shall have another vote.

By-laws

186. (1) The board, in order to regulate the business and affairs of the guarantee corporation, may enact by-laws and amend or repeal them.

(2) The guarantee corporation may make by-laws

(a) respecting the administration, management and control of the property and affairs of the guarantee corporation;

(b) respecting the functions, duties and remuneration of the officers, agents and employees of the guarantee corporation;

(c) respecting the appointment or disposition of special committees created by the guarantee corporation;

(d) respecting the appointment of an auditor;

(e) respecting the time and place for the holding of meetings of the directors and the procedure at those meetings;

(f) respecting the manner in which a credit union may represent that it is a contributor to the deposit guarantee fund;

(g) authorizing and controlling the use by credit unions and the central of marks, signs, advertisements or other devices indicating that deposits with credit unions are insured by the guarantee corporation;

(h) defining the word "deposit" for the purpose of deposit insurance;

(i) adopting a seal for the guarantee corporation;

(j) prescribing standards of sound business and financial practices for credit unions; and

(k) respecting the conduct in all other particulars of the affairs of the guarantee corporation.

Guaranteed deposit insurance

187. (1) The guarantee corporation shall insure deposits placed with a credit union to an amount determined in accordance with the regulations.

(2) Where the guarantee corporation is obligated to make payment in accordance with paragraph 189(a) in relation to a deposit insured by it, the guarantee corporation as soon as possible after the obligation arises shall, in relation to that deposit, make payment, or have that payment made to the person who appears entitled to it by the records of the credit union with whom the deposit was made by paying, or having paid, to that person an amount in money equal to so much of the person's outstanding claim against the credit union as is insured by the guarantee corporation.

(3) Payment under this section by or on behalf of the guarantee corporation in relation to a deposit insured by deposit insurance discharges the guarantee corporation from all liability in relation to that deposit.

(4) Where the guarantee corporation makes a payment, or has a payment to be made, under this section in relation to a deposit with a credit union, the guarantee corporation is subrogated to the extent of the payment made to all the rights and interests of the depositor as against that credit union.

(5) The guarantee corporation may deduct from payment under subsection (2) the amount the credit union is entitled to deduct from the deposit under a lien, right of set off or specific charge effectively as if the credit union itself were repaying the deposit in full.

(6) The deduction of an amount by the guarantee corporation under subsection (2) in respect of a lien, right of set off or specific charge discharges the liability of the member to the credit union to the extent of the amount deducted.

(7) Where a member entitled to a guaranteed deposit cannot be located, the guarantee corporation shall pay the amount guaranteed into its long-term unclaimed balances account.

Prohibition

188. (1) A credit union shall not advertise or hold out by a written or oral representation that its deposits are insured by the guarantee corporation otherwise than by those marks, signs, advertisements or other devises that are authorized by the by-laws of the guarantee corporation and used in the manner and on the occasions specified by the by-laws.

(2) A credit union that violates subsection (1) is guilty of an offence.

Deposit guarantee fund

189. The guarantee corporation shall establish and maintain a deposit guarantee fund which may be used for the following purposes:

(a) on the liquidation of a credit union, to pay out claims of depositors in accordance with section 187;

(b) to provide financial assistance to credit unions for the purpose of stabilization; and

(c) to pay costs or expenses incurred in doing those other things as may be necessary for or incidental to the attainment of the purposes of the guarantee corporation.

Determination of levy

190. The guarantee corporation shall determine the amount of money to be levied and collected from credit unions to enable the guarantee corporation to provide its services and to carry out its purposes in accordance with this Act.

Manner of collection

191. (1) The guarantee corporation shall levy and collect from credit unions those amounts as may be determined by the guarantee corporation, in a manner and at those times as the guarantee corporation may direct.

(2) A credit union shall pay to the guarantee corporation those amounts that may be levied under subsection (1) at the times required by the guarantee corporation.

Loans to guarantee corporation

192. (1) On the application of the guarantee corporation, the minister may, with the approval of the Lieutenant-Governor in Council and subject to those terms and conditions as the minister considers appropriate,

(a) make loans or advances to the guarantee corporation; and

(b) guarantee any loans or advances made to the guarantee corporation by others.

(2) The amount of a loan or advance made to the guarantee corporation under paragraph (1)(a) shall be paid out of the Consolidated Revenue Fund of the province.

Records

193. The board shall keep proper records of the affairs of the guarantee corporation and of matters delegated to it by the superintendent under subsections 241(3) and 242(3).

Fiscal year

194. The fiscal year of the guarantee corporation ends on December 31 in each year.

Audit

195. The books and accounts of the guarantee corporation shall be examined, checked and audited at least once each year.

Application

196. Sections 93 to 103, 106, 107, 109 to 116 and 118 to 121, 124 and 125 apply, with the necessary changes, to the guarantee corporation.

Payment of levy

197. A credit union shall pay to the guarantee corporation the amounts levied by the guarantee corporation.

Report to minister

198. (1) The guarantee corporation shall, within 90 days after the end of each fiscal year, send to the minister

(a) a copy of its financial statements, with the auditor's report on them for that fiscal year;

(b) the annual report of the guarantee corporation; and

(c) further information respecting the financial position of the guarantee corporation and the results of its operations as may be required by the superintendent under this Act and the regulations.

(2) The guarantee corporation shall, within 90 days after the end of each fiscal year or within the extended period that the minister approves, send to the central and each credit union a copy of its financial statements, with the auditor's report on them, for that fiscal year.

PART XII
REMEDIES, OFFENCES AND PENALTIES

Definitions

199. In this Part

(a) "action" means an action under this Act;

(b) "complainant" means

(i) a member of a credit union,

(ii) a registered owner or beneficial owner, or former registered owner or beneficial owner, of a share of a credit union or the central,

(iii) a director or an officer or a former director or officer of a credit union, the central or guarantee corporation,

(iv) a creditor of a credit union, the central or guarantee corporation,

(v) the superintendent,

(vi) a credit union,

(vii) central,

(viii) the guarantee corporation, or

(ix) another person who, in the discretion of the court, is a proper person to make an application under this Part.

Derivative action

200. (1) A complainant may apply to the court for leave to bring an action in the name and on behalf of a credit union, or for leave to intervene in an action to which the credit union is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the credit union.

(2) A complainant who applies to the court under subsection (1) shall give the superintendent notice of the application and the superintendent is entitled to appear and be heard in person or by counsel.

(3) An action may be brought and an intervention in an action may be made under subsection (1) if the court is satisfied that

(a) the complainant has given reasonable notice to the directors of the credit union of the complainant's intention to apply to the court under subsection (1) if the directors of the credit union do not bring, diligently prosecute or defend or discontinue the action;

(b) the complainant is acting in good faith; and

(c) it appears to be in the interest of the credit union that the action be brought, prosecuted, defended or discontinued.

Powers of court

201. In connection with an action brought or intervened in under section 200, the court may make an order it thinks fit including,

(a) an order authorizing the complainant or other person to control the conduct of the action;

(b) an order giving directions for the conduct of the action;

(c) an order directing that an amount adjudged payable by the defendant in the action shall be paid, in whole or in part, directly to former and present members of the credit union;

(d) an order requiring the credit union to pay reasonable legal fees incurred by the complainant in connection with the action; and

(e) an order requiring the credit union to furnish to the complainant or to another person all material or information relevant to the action including

(i) the financial statements of the credit union,

(ii) the name and address of each member of the credit union, and

(iii) the name and address of each creditor of the credit union, including any creditor with unliquidated, further or contingent claims and a person with whom the credit union has a contract.

Application to court

202. (1) A complainant may apply to the court for an order under this section.

(2) Where, upon an application under subsection (1) with respect to any credit union, the central or the guarantee corporation, the court is satisfied that

(a) an act or omission of the credit union, the central or the guarantee corporation effects a result;

(b) the business or affairs of a credit union, the central or the guarantee corporation are or have been carried on or conducted in a manner; or

(c) the powers of the directors of a credit union, the central or the guarantee corporation are to have been exercised in a manner

that is unlawful, unfairly prejudicial or that unreasonably disregards the interests of a complainant, the court may make an order to rectify the matters complained of.

(3) In an application under this section, the court may make an interim or final order it thinks fit including,

(a) an order restraining the conduct complained of;

(b) an order placing a credit union or the central under supervision under sections 220 and 221;

(c) an order placing a credit union under supervision under section 220 for the purpose of liquidation and dissolution;

(d) an order to regulate the affairs of a credit union, the central or the guarantee corporation by amending its articles or by-laws;

(e) an order directing an issue or exchange of securities;

(f) in the case of a credit union or the central an order appointing directors in place of or in addition to all or any of the directors then in office;

(g) an order varying or setting aside a transaction or contract to which a credit union, the central or the guarantee corporation is a party, and compensating the credit union, the central or the guarantee corporation or any other party to the transaction or contract;

(h) an order directing rectification of the registers or other records of the credit union or the central under subsection 204(1);

(i) an order requiring the trial of an issue; and

(j) an order compensating a complainant or another person.

(4) Where an order made under this section directs an amendment of the articles or by-laws of a credit union or the central, in the case of

(a) an amendment to the articles, the directors shall immediately comply with section 126; and

(b) an amendment to the by-laws, the directors shall immediately send to the superintendent the amended by-laws together with a certified copy of the court order,

and another amendment to the articles or by-laws shall not be made without consent of the court, until the court otherwise orders.

Application

203. (1) An application made or an action brought or intervened in under this Part shall not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to a credit union or the central has been or may be approved by the members, but evidence of approval by the members may be taken into account by the court in making an order under this Part.

(2) An application made or an action brought or intervened in under this Part shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given upon those terms as the court thinks fit and, if the court determines that the interest of any complainant may be substantially affected by the stay, discontinuance, settlement or dismissal, the court may order a party to the application or action to give notice to that complainant.

(3) A complainant is not required to give security for costs in an application made or action brought or intervened in under this Part.

(4) In an application made or an action brought or intervened in under this Part, the court may order the credit union, the central or the guarantee corporation to pay to the complainant interim costs, including legal fees and disbursements, but the complainant may be held accountable for any interim costs paid upon final disposition of the application or action.

Rectification of register

204. (1) Where the name of a person is alleged to be or to have been wrongly registered or retained in, or wrongly deleted or omitted from, the registers or other records of a credit union or the central, the credit union or the central or a member or other security holder or any complainant may apply to the court for an order that the registers or records be rectified.

(2) Upon an application under subsection (1), the court may make an order it thinks fit including, an order

(a) requiring the registers and records of the credit union or the central to be rectified;

(b) restraining the credit union or the central from calling or holding a meeting of members or allocating or paying interest before rectification of the registers or records;

(c) determining the right of a party to the proceedings to have that party's name entered or retained in, or deleted or omitted from the registers or records of the credit union or the central whether the issue arises between 2 or more members or security holders, or between the credit union or the central and a member or security holder or alleged member or security holder; and

(d) compensating a party who has incurred a loss by reason of the wrongful entry, retention, deletion or omission.

Compliance application

205. If a credit union, central or the guarantee corporation, or a director, officer, member, employee, agent, auditor, trustee, or supervisor of them does not comply with

(a) this Act;

(b) the articles or by-laws of the credit union, the central or the guarantee corporation; or

(c) an order of the minister, superintendent or the guarantee corporation made under this Act,

a complainant may, in addition to another remedy the complainant has, apply to the court for an order directing that person to comply with, or restraining that person from violating the provision, articles, by-laws or order and, on that application, the court may order and make any further order it thinks fit.

Application for direction

206. The superintendent may apply to the court for direction in relation to a matter concerning the superintendent's duties and powers under this Act and, on that application, the court may give direction and make any other order it thinks fit.

Appeal

207. (1) A person may appeal a decision or an order of the minister or the superintendent to the court within 30 days after the making of the decision or order.

(2) An appeal under subsection (1) may be made on a question of law or fact or both and the court, after hearing the appeal, may

(a) affirm or reverse the decision or order;

(b) direct the minister or superintendent to make another decision or order that the minister or superintendent is authorized to make under this Act; or

(c) substitute its decision or order for that of the minister or superintendent.

Review and examination

208. The superintendent or, for a credit union, the guarantee corporation

(a) shall review information and returns received from credit unions or the central and their directors, officers, committee members or employees;

(b) may examine the business and affairs of a credit union or the central;

(c) shall be given access to all records, books, accounts, vouchers and other documents; and

(d) may make those inquiries that are necessary to ascertain whether a credit union or the central has complied with this Act, or an order or direction.

Examination powers

209. (1) For the purpose of the examination referred to in section 208, a credit union and the central shall prepare and submit to the superintendent or for a credit union, the guarantee corporation, the information with respect to its business and affairs, in addition to the returns required under Part VII, as the superintendent may require.

(2) Upon an examination, the superintendent or a person that the superintendent may authorize has the powers of a commissioner appointed under the Public Inquiries Act.

Voluntary compliance

210. (1) Where, in the opinion of the superintendent or for a credit union, the guarantee corporation, a credit union or the central is committing an act or pursuing a course of conduct that

(a) does not comply with this Act;

(b) might reasonably be expected, if continued, to result in a state of affairs that would not be in compliance with this Act;

(c) does not comply with an undertaking given or an agreement made with the minister or superintendent under this Act; or

(d) constitutes a practice that might prejudice or adversely affect the interests of depositors,

the credit union or the central may enter into a program of voluntary compliance related to an act or course of conduct described in paragraph (a), (b), (c) or (d).

(2) A voluntary compliance program under this section shall

(a) be first approved by the superintendent;

(b) be in writing; and

(c) bind the credit union or the central from the time it is approved by the superintendent.

(3) Where a voluntary compliance program is entered into, the superintendent shall not be prevented from making orders against a credit union or the central

(a) on matters not covered by the program;

(b) where the program is not complied with, on matters covered in the voluntary compliance program;

(c) if there has been a deterioration in the condition of the credit union or the central; or

(d) on matters covered in the program where all the facts related to the matter covered by the program were not known by the minister at the time the program was entered into.

(4) The superintendent, on the request of a credit union or the central, may approve the alteration of a voluntary compliance program entered into under this section.

Compliance order

211. (1) Where in the opinion of the superintendent, or for a credit union, the guarantee corporation, a credit union or the central is committing an act or pursuing a course of conduct that

(a) does not comply with this Act;

(b) might reasonably be expected, if continued, to result in a state of affairs that would not be in compliance with this Act;

(c) does not comply with a voluntary compliance program under section 210; or

(d) does not comply with an undertaking given or agreement made with the minister or the superintendent under this Act,

the guarantee corporation or the superintendent may give notice to the credit union or the central of an intention to order the credit union or the central to cease doing an act or to cease pursuing a course of conduct identified by the guarantee corporation or the superintendent or order that the credit union or the central perform those acts that, in the opinion of the guarantee corporation or the superintendent, are necessary to remedy the situation.

(2) The credit union or the central may, by written notice served on the superintendent within 15 days after the service of the notice on the credit union or the central under subsection (1), request a hearing before the superintendent.

(3) Where a hearing is not requested within the time set out in subsection (2) or (4), or where a hearing is held and the guarantee corporation or the superintendent is of the opinion that an order described in subsection (1) should be made, the superintendent may make an order and that order shall take effect immediately or at a later date as may be set out in the order.

(4) Notwithstanding subsection (2), where, in the opinion of the guarantee corporation or the superintendent, the interests of the depositors or the public may be prejudiced or adversely affected by a delay in the issuing of an order, the guarantee corporation or the superintendent may make an interim order as described in subsection (1) which shall become final on the fifteenth day after its making unless within that time a hearing before the superintendent is requested.

(5) A request for a hearing under subsection (4) shall be in writing and served on the superintendent.

(6) Where a hearing is requested under subsection (4), the superintendent may extend the interim order until the hearing is concluded or an appeal from the hearing is concluded and the order is confirmed, varied or revoked.

(7) Where an order is made with respect to a credit union or the central under this section, a copy of the order shall be sent to each director of the credit union or the central.

(8) The superintendent may, after giving the credit union or the central named in the order an opportunity to be heard, modify or revoke an order made under this section.

Appeal

212. (1) A party to a hearing under section 211 before the superintendent may, within 15 days after the receipt of the superintendent's decision, appeal the decision to the minister by serving a notice in writing of the appeal on the superintendent who shall advise the minister immediately of the appeal and the minister may hear the appeal or appoint an appeal board to do so.

(2) An appeal shall be based on the evidence that may be presented to the minister or the appeal board and the minister or the appeal board upon hearing an appeal may confirm, vary or revoke the decision, order, approval or consent that is the subject of the appeal.

Minister consent

213. (1) Where this Act provides for a decision, order, approval or consent of the minister, the decision, order, approval or consent is subject to those terms and conditions that the minister may impose.

(2) A decision, order, approval or consent of the minister under this Act shall be in writing.

(3) Before making a decision or order refusing an approval or consent or granting an approval or consent subject to terms and conditions, the minister shall give the credit union or the central notice of the minister's intention and the credit union or the central may require a hearing before the minister.

(4) The minister may, having given the credit union or the central an opportunity to be heard, confirm, revoke or vary a decision, order, approval, consent or refusal.

Appearance by superintendent

214. The superintendent is entitled to appear and be heard in person or by counsel at a hearing before the minister or an appeal board appointed under section 212.

Private or public hearings

215. A hearing before the superintendent or the minister or an appeal board, at the discretion of the superintendent or the minister or the appeal board, may be heard in private or in public.

Offence

216. (1) A person who makes or assists in making a report, return, notice or other document required by this Act to be sent to the superintendent or to another person that

(a) contains an untrue statement of a material fact;

(b) does not state a material fact; or

(c) contains a misleading statement

is guilty of an offence and liable on summary conviction to a fine not less than $500 and not exceeding $5,000 or to imprisonment for a term not exceeding 6 months, or to both the fine and imprisonment.

(2) Where a person guilty of an offence under subsection (1) is a corporation, then, whether or not the corporation has been prosecuted or convicted, a director or officer of the corporation who knowingly authorizes, permits or acquiesces in the offence is also guilty of an offence and liable on summary conviction to a fine not less than $5,000 and not exceeding $25,000 or to imprisonment for a term not exceeding 6 months, or to both the fine and imprisonment.

(3) A person is not guilty of an offence under subsection (1) or (2) if the untrue statement or omission was unknown to that person and in the exercise of reasonable diligence could not have been known to that person.

General offence

217. A person who, without reasonable cause, contravenes a provision of this Act for which another punishment, is not provided in this Act is guilty of an offence and is liable on summary conviction to a fine not less than $500 and not exceeding $5,000 in the case of a natural person and not less than $5,000 and not exceeding $25,000 in the case of a corporation.

Compliance order

218. (1) Where a person is convicted of an offence under this Act, the convicting court may, in addition to a punishment imposed, order the person to comply with the provision of the Act for the contravention of which that person has been convicted.

(2) A prosecution for an offence under this Act shall be instituted within 2 years from the time when the subject matter of the complaint arose.

(3) A civil remedy for an act or omission under this Act is not suspended or affected by reason only that the act or omission is an offence under this Act.

Maintenance of action

219. (1) Notwithstanding anything contained in this Part, where an action could be brought against a person by a credit union or the central for loss or damage suffered by or an accounting due to the credit union or the central by reason of the negligence of the person or the failure of the person to comply with this Act, or with the articles or by-laws of the credit union or the central or any orders, directions or notices of the superintendent or the guarantee corporation, if

(a) the action has not been brought, the superintendent or, in the case of a credit union, the guarantee corporation may, without leave, bring and maintain the action; or

(b) the action has been brought, the superintendent or, in the case of a credit union, the guarantee corporation may apply to the court to be added as a plaintiff and to be given the conduct of the action,

and money recovered by the superintendent or the guarantee corporation shall be held for the benefit of the credit union or the central or, where a grant, loan or advance has been made by the guarantee corporation, the guarantee corporation shall be held for the benefit of the guarantee corporation.

(2) An action for damages does not lie against the minister, the superintendent, the guarantee corporation or a person directed by them, for an act or thing done or omitted under this Act that was done or omitted in good faith.

PART XIII
COMPLIANCE AND SUPERVISION

Supervision of credit union

220. Where the superintendent or the guarantee corporation is satisfied that a credit union is carrying on its business in a manner that contravenes this Act or is financially unsound, including those situations where

(a) a credit union is unable to pay its liabilities as they become due;

(b) the realizable value of the assets of a credit union is less than the aggregate of its liabilities and the capital account of all classes of shares of the credit union, other than the equity of members;

(c) a credit union has requested and the guarantee corporation has determined to give it financial assistance;

(d) a credit union fails to file a report or document required to be filed by this Act within the time fixed for filing by this Act;

(e) in the opinion of the superintendent or the guarantee corporation a credit union has not been following sound business practices; and

(f) has failed to comply with an order of the superintendent or of the guarantee corporation,

the superintendent or the guarantee corporation may give notice to the credit union that it is declared to be under the supervision of a supervisor appointed by the superintendent.

Supervision of central

221. Where the superintendent is satisfied that the central is carrying on its business in a manner that contravenes this Act or is financially unsound, including those situations where

(a) the central is unable to pay its liabilities as they become due;

(b) the realizable value of the assets of the central is less than the aggregate of its liabilities and the capital account of all classes of shares of the central;

(c) the central is unable to meet its obligations or manage liquidity requirements;

(d) the central fails to file a report or document required to be filed by this Act within the time fixed for filing by this Act;

(e) in the opinion of the superintendent the central has not been following sound business practices; or

(f) has failed to comply with an order of the superintendent,

the superintendent may give notice to the central that it is declared to be under the supervision of a supervisor appointed by the superintendent.

Supervisor

222. (1) The superintendent may appoint the guarantee corporation or another person as a supervisor to supervise a credit union under section 220.

(2) The supervisor appointed by the superintendent to supervise the central under section 221 shall not be the guarantee corporation.

Length of supervision

223. Where a credit union or the central is declared to be under supervision under sections 220 and 221, the credit union or the central remains subject to the supervision until

(a) the supervisor appointed under section 222 applies to the superintendent to have the credit union or the central released from supervision;

(b) the credit union or the central applies in writing to the superintendent, with notice to the supervisor, to be released from supervision, stating reasons in support of its application, and the superintendent approves the application;

(c) the superintendent, by notice to the credit union or the central and its supervisor, releases the credit union or the central from supervision;

(d) the credit union is liquidated, dissolved or amalgamated; or

(e) in the case of a credit union or the central that has been placed under supervision by the court, an order of the court has been made releasing the credit union or the central from supervision.

Powers of supervisor

224. (1) Subject to the approval of the superintendent, or to an order of the court, where a credit union or the central has been placed under the supervision of a supervisor, the supervisor appointed under section 222 may

(a) exercise or direct the exercise of the powers of the credit union or the central;

(b) inspect the affairs of the credit union or the central and make inquiries from its officers, directors, committee members, employees and members;

(c) require the credit union or the central to correct any practices that, in the opinion of the supervisor, are contributing to the financial difficulties suffered by the credit union or the central or are likely to contribute to the unsound conduct of its affairs;

(d) order the credit union or the central and its directors, committee members, officers and employees to refrain from exercising those powers of the credit union or the central or of its directors, committee members, officers or employees or that may be specified in the order unless approved by the supervisor or the authorized agent or employee of the supervisor;

(e) order the credit union or the central not to declare or pay interest or dividends, or to restrict the amount of interest or dividends to be paid to a rate or an amount fixed by the supervisor;

(f) carry on, manage and conduct the operations of the credit union or the central and, in the name of the credit union or the central, preserve, maintain, realize, dispose of and add to the property of the credit union or the central, receive the incomes and revenues of the credit union or the central and exercise all the powers of the credit union or the central and of its directors, officers, committees and employees;

(g) exclude the directors of the credit union or the central and its officers, committee members, employees and agents from the property and business of the credit union;

(h) in the case of a credit union, reorganize, amalgamate, dissolve, wind-up, liquidate or otherwise dispose of the business of the credit union; and

(i) exercise those other powers that may be granted to it by order of the court.

(2) A supervisor appointed under section 222 shall ensure that the interests of all creditors of a credit union or the central are properly and lawfully provided for.

Report

225. A supervisor appointed under section 222 shall, within 30 days of being appointed, submit a report to the superintendent containing

(a) an assessment of the financial condition of the credit union or central and the nature and circumstances giving rise to the supervision;

(b) a statement of the course of action in relation to the supervision; and

(c) the other information that the superintendent may require.

Directions

226. A supervisor appointed under section 222 may apply to the court for direction in the exercise of his or her powers.

Accounting

227. A supervisor appointed under section 222 shall, upon request of the superintendent and upon discharge, fully account to the superintendent for the supervision of the credit union or the central.

Release of claims

228. Unless the superintendent or the court otherwise orders, within 30 days after completion of the final accounting under section 227, the supervisor is released from all claims by the credit union or the central or a member of the credit union other than claims arising out of fraud or dishonesty.

PART XIV
GENERAL

Notice

229. (1) A notice or document required by this Act, or by the by-laws of a credit union, or the central, to be sent to a person entitled to receive notice from the credit union or the central may be given in accordance with the by-laws or, in the absence of a provision in the by-laws, may be sent by prepaid mail addressed to, or may be delivered personally to

(a) the person at the latest address of the person, as shown in the records of the credit union or the central or its transfer agent; and

(b) in the case of a director, at the latest address of the director, as shown in the records of the credit union or the central, or in the last notice filed under section 89.

(2) A notice or document mailed in accordance with subsection (1) is considered to have been received by the person entitled to receive notice at the time it would be delivered in the ordinary course of mail, unless there are reasonable grounds for believing that the person did not receive the notice or document at that time or at all.

(3) Where a credit union or the central mails a notice or document to a person in accordance with subsection (1) and the notice or document is returned on 2 consecutive occasions because the person cannot be found, the credit union or the central is not required to send a further notice or document to the person until the credit union or the central is informed, in writing, of the new address of that person.

(4) Where the by-laws of a credit union or the central provide for the giving of a notice to members under subsection (1) by insertion of the notice in a newspaper or other publication, the notice is considered to have been received by the members at the time the publication containing the notice is distributed.

(5) Where the by-laws of a credit union or the central provide for the giving of a notice to members under subsection (1) by posting the notice in a specified place, the notice is considered to have been received by the members at the time the notice is posted.

Service of notice

230. A notice or document required to be sent to or served upon a credit union or the central may be sent by registered mail to the registered office of the credit union or the central shown in the last prescribed notice filed with the superintendent and, if so sent, it is considered to have been received or served at the time it would be delivered in the ordinary course of mail, unless there are reasonable grounds for believing that the credit union or the central did not receive the notice or the document at that time or at all.

Waiver of notice

231. Where a notice or document is required by this Act to be given or sent, the giving or sending of the notice or document may be waived or the time for the giving or sending of the notice or document may be waived or abridged at any time with the consent in writing of the person entitled to the notice or document.

Certificates

232. (1) Where this Act requires or authorizes the superintendent to issue a certificate or to certify a fact, the certificate shall be signed by the superintendent or by a deputy superintendent appointed under section 241.

(2) A certificate referred to in subsection (1) or a certified copy of the certificate, when introduced as evidence in a civil, criminal or administrative action or proceeding, is conclusive proof of the facts certified without proof of the signature or official character of the person appearing to have signed the certificate.

Signatures

233. (1) A certificate issued on behalf of a credit union or the central stating a fact that is set out in the articles or by-laws of the credit union or the members of the credit union or the central, or in a trust indenture or other contract to which the credit union or the central is a party may be signed by a director, officer or a transfer agent of the credit union or the central.

(2) When introduced as evidence in a civil, criminal or administrative action or proceeding

(a) a certificate of a kind referred to in subsection (1);

(b) a certified extract from a members' register or a securities register of a credit union or the central; or

(c) a certified copy of minutes or an extract from minutes of a meeting of members or directors or a committee of directors of a credit union or the central,

is, in the absence of evidence to the contrary, proof of the facts certified without proof of the signature or official character of the person appearing to have signed the certificate.

(3) An entry in a securities or members' register of, or a share certificate issued by, a credit union or the central is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered is the owner of the securities described in the register or in the certificate.

Copies

234. Where a notice or document is required to be sent to the superintendent under this Act, the superintendent may accept a copy of the notice or document.

Verification

235. (1) The superintendent may require that a document or a fact stated in a document required by this Act to be sent to the superintendent be verified in accordance with subsection (2).

(2) A document or fact required by this Act or by the superintendent to be verified may be verified by affidavit made under oath or affirmation.

(3) The superintendent may require a credit union or the central to authenticate a document, and the authentication may be signed by the secretary or director or authorized person or by the solicitor for the credit union or the central.

Statement of intent

236. (1) In this section, "statement" means a statement of intent to dissolve or statement of revocation of intent to dissolve referred to in section 142.

(2) Where this Act requires that articles or a statement relating to a credit union be sent to the superintendent, unless otherwise specifically provided by this Act,

(a) 2 duplicate originals of the articles or the statement shall be signed by a director or officer of the credit union or, in the case of articles of incorporation, by the incorporators; and

(b) where the articles or statement conform to law and are accompanied by all the required by-laws or other documents and the fees in respect of the articles or statement are paid, the superintendent shall, subject, where required by this Act, to being satisfied that it is advisable,

(i) endorse on each of the 2 duplicate originals of the articles or statement the prescribed certificate indicating the date on which the articles or statement become effective,

(ii) file one duplicate original of the articles or statement endorsed in accordance with subparagraph (i),

(iii) send the other duplicate original of the articles or statement, endorsed in accordance with subparagraph (i), to the credit union or its representative, and

(iv) publish in the Gazette a notice of the issue of the certificate and the date the articles or statement to which it relates become effective.

(3) The date indicated on a certificate issued under subsection (2) as the date the articles or statement become effective shall not be earlier than the date on which the superintendent received the articles or statement or court order under which the certificate is issued.

(4) The superintendent may provide to a person

(a) a certificate that a credit union or other person has or has not filed with the superintendent a document required to be filed under this Act or another Act for which this Act was substituted; or

(b) a certified copy of a document in the custody and control of the superintendent.

Alter notice or document

237. The superintendent may alter a notice or document, other than an affidavit or statutory declaration, if so authorized by or on behalf of the person who sent the notice or document to the superintendent.

Corrected certificate

238. (1) Where a certificate or order containing an error is issued by the superintendent, the superintendent shall issue a corrected certificate or order and may

(a) demand the surrender of the certificate or order containing the error; and

(b) request the directors or members of the credit union to

(i) pass resolutions, or

(ii) send to the superintendent the documents required to comply with this Act,

and take those other steps that the superintendent reasonably requires.

(2) A certificate or order corrected under subsection (1) has effect from the date of the certificate or order it replaces.

(3) Where a corrected certificate or order issued under subsection (1) materially amends the terms of the original certificate or order, the superintendent shall immediately give notice of the correction in the Gazette.

Examination of documents

239. (1) A person who has paid the appropriate fee is entitled during usual business hours to examine the annual returns, notices, articles or by-laws of a credit union or the central or an order of declaration of the superintendent or court filed with the superintendent.

(2) The superintendent shall furnish, upon receipt of the appropriate fee, a person with a copy or a certified copy of a document to which reference is made in subsection (1).

Records

240. (1) The records required by this Act to be prepared and maintained by the superintendent may be in bound or loose-leaf form or in photographic film form, or may be entered or recorded by a system of mechanical or electronic data processing or by another information storage device that is capable of reproducing any required information in intelligibly written form within a reasonable time.

(2) Where the records maintained by the superintendent are prepared and maintained in other than written form

(a) the superintendent shall furnish any copy required to be furnished under subsection 239(2) in intelligibly written form; and

(b) a report reproduced from those records, if it is certified by the superintendent, is admissible in evidence to the same extent as the original records would have been if they had been in written form.

(3) The superintendent is not required to produce a document, other than a certificate and attached articles or statement filed under section 236 after 6 years from the date the superintendent receives it.

Superintendent

241. (1) The minister shall appoint a Superintendent of Credit Unions for the purpose of this Act and may appoint a deputy superintendent to act in the place of the superintendent in his or her absence.

(2) The superintendent shall

(a) act under the instructions of the minister;

(b) have general supervision over all matters relating to this Act; and

(c) carry out those duties and may exercise those powers that may be required or authorized by this Act.

(3) The superintendent may delegate to the guarantee corporation those duties that may be necessary for the administration of the regulations under this Act.

(4) The superintendent may issue directives with respect to the interpretation, clarification of the Act and the powers referred to in subsection (2).

Register of credit unions

242. (1) The superintendent shall maintain a register of credit unions in which to keep the name of every credit union that is

(a) incorporated under this Act;

(b) continued under this Act;

(c) registered under this Act; or

(d) restored to the register under this Act,

provided that the credit union has not been struck off that register.

(2) Documents, notices or information required to be sent to or filed with the superintendent under this Act shall be filed with the superintendent at the same location as the register referred to in subsection (1).

(3) The superintendent may delegate to the guarantee corporation the duties necessary to carry out the requirements of subsections (1) and (2).

Regulations

243. The minister may make regulations

(a) prescribing a matter required or authorized by this Act to be prescribed;

(b) respecting articles of incorporation and the by-laws of a credit union;

(c) respecting associate memberships in credit unions;

(d) prescribing fees and late fees for the purposes of this Act;

(e) respecting requirements for the commencement of business by a credit union including names permitted or not permitted and the location of branch and relocated offices;

(f) respecting the designation of classes of shares of a credit union and respecting the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to shares or classes of shares of a credit union;

(g) respecting arrangements for the provision of a service in accordance with subsection 18(3) and of an insurance service in accordance with section 19;

(h) restricting the business and activities that may be carried on by a credit union, central or the guarantee corporation and respecting those restrictions;

(i) respecting the creation of a subsidiary;

(j) respecting the manner in which a deposit account is to be dealt with for the purpose of section 42;

(k) respecting the payment of funds from an account under section 45;

(l) respecting the lending activities of a credit union generally, the loans that may be made by a credit union and the kinds and amounts of those loans, the loan policies to be established by a credit union and the terms, conditions, restrictions or limitations in relation to those lending activities, loans or loan policies;

(m) respecting deposit accounts generally, the amounts of funds to be maintained in a deposit account and the circumstances in which a member of a credit union may be permitted to make overdrafts on deposit accounts of the member and requiring or respecting the establishment of policies of credit unions in relation to overdrafts;

(n) respecting the liquid assets to be maintained by a credit union under section 51;

(o) respecting the making of investments by a credit union including any prohibitions, conditions, restrictions or limitations in relation to those investments;

(p) respecting an allowance for doubtful loans to be maintained by a credit union;

(q) respecting the equity to be maintained by a credit union;

(r) respecting the amount that may be borrowed by a credit union under section 55;

(s) respecting matching under section 56;

(t) respecting insurance and bonding coverage to be maintained by a credit union;

(u) requiring directors and officers of credit unions to meet requirements respecting their training;

(v) respecting the manner in which a member of a credit union may appeal a termination of membership;

(w) respecting the terms and conditions on which a member may withdraw from a credit union;

(x) respecting arrears in payment of principle and interest to a credit union for the purposes of appointment as a director under sections 83 and 173;

(y) respecting conflicts of interest under section 98;

(z) respecting the articles of amalgamation and dissolution that may be required;

(aa) respecting the establishment of an audit committee by a credit union and the duties and powers of an audit committee;

(bb) respecting the establishment of a credit committee by a credit union and the duties and powers of a credit committee;

(cc) respecting information to be shown in the return of a credit union for the purpose of section 105;

(dd) respecting financial statements and auditors reports for the purpose of this Act and the regulations;

(ee) respecting information to be disclosed to the members of a credit union for the purpose of subsections 106(1) and (3);

(ff) requiring or authorizing the central to do certain things for the purpose of paragraph 171(q);

(gg) respecting the making of investments by the central including prohibitions, conditions, restrictions or limitations in relation to those investments;

(hh) requiring or authorizing the guarantee corporation to do certain things for the purpose of section 177;

(ii) respecting the making of investments by the guarantee corporation including prohibitions, conditions, restrictions or limitations in relation to those investments;

(jj) respecting, for the purpose of section 191, the amount of the annual levies that the guarantee corporation is to levy and collect annually from its member credit unions, including a maximum or minimum restrictions in relation to that amount and the manner of its collection;

(kk) respecting information to be included in the report of the guarantee corporation for the purpose of section 198;

(ll) requiring or authorizing the guarantee corporation to do certain things for the purpose of section 179;

(mm) respecting the nomination of persons as directors of the guarantee corporation under paragraph 180(2)(a) and respecting the appointment of a chairperson and secretary treasurer under subsection 181(1);

(nn) respecting the amount to which deposits are insured for the purpose of section 187;

(oo) respecting the duties and powers of the superintendent;

(pp) respecting the delegation of the administration of this Act to the guarantee corporation;

(qq) respecting forms and the filing of information and documents required for the purposes of this Act;

(rr) respecting articles of continuance;

(ss) defining a word or a phrase used in this Act but not defined in this Act; and

(tt) generally, to give effect to the purposes of this Act.

PART XV
TRANSITIONAL, REPEAL AND
CONSEQUENTIAL AMENDMENTS

Matters done under former Act

244. (1) Upon the commencement of this Act all

(a) articles of a credit union incorporated under the Co-operative Societies Act in force immediately before the commencement of this Act;

(b) cancellations, suspensions, proceedings, acts, registrations, supervisors orders and things; and

(c) affidavits, declarations, by-laws, resolutions, regulations and documents,

lawfully done under a provision of the Co-operatives Societies Act are presumed to have been lawfully done, and continue in effect under this Act as though they had been lawfully done under this Act.

(2) For the purpose of this section "lawfully done" means to have been lawfully granted, issued, imposed, made, taken, done, commenced, filed or passed as the circumstances require.

(3) Notwithstanding another provision of this Act, if a provision of the articles, by-laws, resolutions and constating instruments of a credit union, the central or the guarantee corporation lawfully incorporated under the Co-operative Societies Act in force immediately before the commencement of this Act is inconsistent under, repugnant to, or not in compliance with this Act, that provision is not illegal or invalid solely by reason of that inconsistency, repugnancy or non-compliance.

(4) An act, matter or proceeding or thing done or taken by a credit union or a director, member or officer of a credit union under a provision mentioned in subsection (3) under the Co-operative Societies Act in force immediately before the commencement of this Act is not illegal or invalid by reason of being prohibited or not authorized by law after the commencement of this Act.

(5) Where a provision of the articles, by-laws or resolutions of a credit union, the central or the guarantee corporation is inconsistent with the provisions of this Act, the credit union, central or guarantee corporation shall file with the superintendent, amending articles, by-laws or resolutions that comply with this Act within 2 years of the commencement of this Act.

Application and continuance

245. (1) Every credit union incorporated under the Co-operative Societies Act in force immediately before the commencement of this Act shall, within 2 years after the commencement of this Act, apply to the superintendent for a certificate of continuance under this Act.

(2) Every credit union incorporated under the Co-operative Societies Act in force immediately before the commencement of this Act continues in being, for all purposes, without a loss of status upon the commencement of this Act.

(3) A fee to defray administration costs may be prescribed in respect of an application and certificate of continuance under this Part.

Amending instruments

246. Amendments to the articles, by-laws, resolutions and constating instruments of a credit union, the central or guarantee corporation incorporated under the Co-operative Societies Act in force immediately before the commencement of this Act shall be made in accordance with this Act.

Articles of continuance

247. (1) Articles of continuance may without so stating in the articles effect an amendment to the constating instruments of a credit union incorporated under the Co-operative Societies Act, in force immediately before the commencement of this Act whether incorporated in, confirmed or ratified by or referred to in a statute or a regulation, if the amendment is an amendment that a credit union incorporated under this Act may make in its articles.

(2) Articles of continuance shall be sent to the superintendent in the form and manner prescribed by regulation.

Certificate of continuance

248. (1) Upon receipt of an application under this Part, the superintendent may, and if the applicant complies with all reasonable requirements of the superintendent to have the credit union continued in accordance with the requirements of this Act, the superintendent shall issue a certificate of continuance to that credit union in accordance with this Act.

(2) On the date shown in the certificate of continuance

(a) the credit union incorporated under the Co-operative Societies Act in force immediately before the commencement of this Act becomes a credit union to which this Act applies as if it had been incorporated under this Act; and

(b) the articles of continuance are the articles of the continued credit union.

Non-application of RSN 1990 cC-35

249. The Co-operative Societies Act, immediately after the commencement of this Act, shall not apply to credit unions in the province.

Consequential amendments

250. (1) The Schedule to the Department of Finance Act is amended by adding immediately after item number 3 the following:

3.1 Credit Union Act

(2) Where, in an Act existing immediately before the commencement of this Act there is a reference to a credit union incorporated under the Co-operative Societies Act, upon the commencement of this Act that reference to a credit union shall be considered to be a reference to a credit union continued or incorporated under this Act.

Commencement

251. This Act comes into force on a day to be proclaimed by the Lieutenant-Governor in Council.

©Earl G. Tucker, Queen's Printer