This is an official version. Copyright © 2009: Queen's Printer, Important Information
Statutes of Newfoundland and Labrador 2009 1. Short title 2. Definitions 3. Part prevails 4. Prohibition PART
I 5. Incorporation 6. Articles 7. By-laws 8. Application for incorporation 9. Certificate of incorporation 10. Business commencement requirements 11. Name 12. Prohibited names 13. Pre-incorporation contract PART
II 14. Capacity 15. Jurisdiction outside province 16. Business of credit unions 17. Coercive tied selling 18. Subsidiaries and trade 19. Restrictions 20. No contravention notice 21. Reliance PART
22. Registered office 23. Branch office 24. Records 25. Examination of records 26. Form of records PART
IV 27. Member shares 28. Shares other than members' equity shares 29. Dividend or patronage refund 30. Purchase of surplus shares 31. Exception 32. Liability limited 33. Remedy 34. Unclaimed balances 35. Member right to withdraw deposits 36. Trust funds 37. Partial payment on death 38. Loans 39. Lien 40. Liquid assets 41. Investments 42. Doubtful loans 43. Equity 44. Borrowing 45. Matching 46. Insurance required 47. Sound business and financial practices PART
V 48. Membership 49. Bond of association 50. Membership termination 51. Remedy preserved 52. By-laws 53. Members bound 54. Place of meetings 55. Calling meetings 56. Record date 57. Notice of meetings 58. Waiver of notice 59. Member notice 60. Quorum 61. Voting 62. Corporate representation 63. Voting by proxy 64. Joint membership 65. Executors and administrators 66. Ballot 67. Requisition by members to call meeting 68. Meeting called by superintendent PART
VI 69. Directors 70. Qualifications 71. Terms of office 72. Ceasing to hold office 73. Removal of directors 74. Reasons 75. Vacancy 76. Notice of change of directors 77. Meetings 78. Appointing committees 79. Establishing committees 80. Validity of acts 81. Resolution 82. Liability 83. Duty to report 84. Designation of officers 85. Remuneration and expenses 86. Duty of care 87. Dissent 88. Indemnification PART
89. Fiscal year 90. Annual returns 91. Annual financial statements 92. Conditions re: financial statements 93. Request for documents 94. Auditors 95. Auditor removal 96. Vacancy 97. Auditor appointed by guarantee corporation 98. Duty to attend meetings 99. Examinations by auditor 100. Superintendent or guarantee corporation may enlarge scope 101. Right to demand information 102. Auditor's report 103. Audit committee 104. Duty of auditor 105. Additional requirements 106. Access to papers 107. Qualified privilege 108. No liability PART
VIII 109. Amendment of articles 110. Articles to superintendent 111. Certificate of amendment 112. Effect of certificate 113. Restated articles 114. Amalgamation 115. Amalgamation agreement 116. Approval of agreement 117. Articles of amalgamation 118. Compulsory amalgamation 119. Certificate and effect of amalgamation 120. Extraordinary sale, lease or exchange 121. Approval of guarantee corporation 122. Dissent 123. Reorganization under a court order PART
IX 124. Mandatory dissolution 125. Voluntary dissolution by members 126. Voluntary liquidation and dissolution 127. Articles of dissolution and certificate 128. Custody of records 129. Effect of dissolution 130. Unclaimed property 131.
Effect of Bankruptcy and Insolvency Act
( PART
X 132. Application 133. Continuation 134. Duties 135. Capacity 136. Powers 137. Board 138. Officers 139. Vacancy 140. Office ceases 141. Management 142. Quorum 143. By-laws 144. Guaranteed deposit insurance 145. Prohibition 146. Deposit guarantee fund 147. Determination of levy 148. Manner of collection 149. Loans to guarantee corporation 150. Records 151. Fiscal year 152. Audit 153. Application 154. Payment of levy 155. Report to minister PART
XI 156. Definitions 157. Derivative action 158. Powers of court 159. Application to court 160. Application 161. Rectification of register 162. Compliance application 163. Application for direction 164. Appeal 165. Review and examination 166. Examination powers 167. Voluntary compliance 168. Compliance order 169. Offence 170. General offence 171. Compliance order following offence 172. Maintenance of action PART
XII 173. Supervision of credit union 174. Supervisor 175. Length of supervision 176. Powers of supervisor 177. Report 178. Accounting PART
XIII 179. Notice 180. Service of notice 181. Waiver of notice or delivery 182. Certificates 183. Signatures 184. Copies 185. Verification 186. Statement of intent 187. Alter notice or document 188. Corrected certificate 189. Examination of documents 190. Records 191. Superintendent 192. Register of credit unions 193. Regulations 194. Fees and forms PART
XIV 195. Transitional 196. Amending instruments 197.
SNL1995 cC-37.1 198. 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, 2009. Definitions 2. In this Act (a) "articles" means (i) the original or restated articles of incorporation, amendment, amalgamation, continuance, reorganization and dissolution of a credit union, and (ii) a statute or other constating instrument evidencing the corporate existence of a credit union continued as a credit union under this Act; (b) "associate member" means a person other than a member who has rights as set out in the by-laws and the regulations but that person shall not have a vote at a meeting of a credit union or become a director of a credit union; (c) "bond of
association" means a characteristic common to all members of a credit
union; (d) "court"
means the Trial Division of the Supreme Court of Newfoundland and (e) "credit union" means a corporation incorporated or continued as a credit union under this Act and includes a caisse populaire; (f) "deposit" means money placed in an account in a credit union or a financial central; (g) "director" in relation to a credit union means a person occupying in the credit union, 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 or another period as approved by the superintendent, (ii) the book value of surplus shares issued by the credit union, (iii) the retained earnings of the credit union, and (iv) other capital items
approved by the superintendent, unless the credit union has an accumulated deficit, in which case it means the amounts determined under subparagraphs (i), (ii) and (iv) minus the accumulated deficit; (i) "guarantee corporation" means the Credit Union Deposit Guarantee Corporation continued under section 133; (j) "member" means a person who is a shareholder of a credit union and who, in accordance with the credit unions by-laws, qualifies for membership in that credit union; (k) "minister" means the minister appointed under the Executive Council Act to administer this Act; (l) "ordinary resolution" means a resolution passed by a majority of the votes cast by the members 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 to its members, based on the business done by each of them with the credit union; (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 or the guarantee corporation taken by a creditor to secure payment of a debt or performance of an obligation of a credit union or the guarantee corporation and includes a certificate evidencing a share or debt obligation; (p) "sound business and
financial practices" means a set of stated business principles as set out
by the guarantee corporation against which the credit unions' boards of
directors and the credit unions' management personnel can measure their
performance; (q) "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; (r) "subsidiary" means a corporation in which a credit union has a majority of the voting shares; (s) "superintendent" means the Superintendent of Credit Unions appointed under section 191; and (t) "supervisor"
means the guarantee corporation or a person appointed by the guarantee
corporation under section 174 to supervise a credit union. Part prevails 3. Where
a provision of Part X is inconsistent with another provision of this Act, the
provision of that Part prevails. Prohibition 4. A
person not incorporated as a credit union under this Act or under or continued
under the Credit Union Act in force
immediately before the commencement of this Act, shall not carry on the business
of a credit union in the province. PART I Incorporation (2) The incorporators shall apply for
incorporation as a credit union by sending to the superintendent (a) the proposed articles
of incorporation in a form acceptable to the superintendent; (b) the proposed by-laws that
are required by the Act and the Regulations; and (c) other information
that the superintendent may require. Articles 6. (1) Articles
of incorporation of a credit union 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 where
there will be 2 or more classes of shares the rights, privileges, restrictions
and conditions attaching to each class of shares; (f) where 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. By-laws 7. (1) A credit union shall establish by-laws which provide for
those matters required by the regulations and the by-laws shall be approved by ordinary
resolution of the members in attendance at a duly convened meeting of the
credit union. (2) The by-laws of a credit union may provide for
matters in addition to those matters required by the regulations if the by-laws
are not inconsistent with this Act. Application for
incorporation 8. (1) The
guarantee corporation may approve an application for incorporation as a credit
union (a) where the guarantee
corporation is satisfied that (i) the proposed articles of incorporation and by-laws are in compliance with this Act, (ii) the applicants are
qualified to establish and the proposed directors are qualified to establish
and operate the proposed credit union, and (iii) sections 6 and 7 have
been complied with; and (b) unless the guarantee
corporation considers the application is contrary to the public interest. (2) The superintendent shall if the guarantee
corporation approves the application under subsection (1), file the articles of
incorporation and by-laws submitted under subsection 5(2)
and shall issue a certificate of incorporation in accordance with section 182. (3) The superintendent shall give notice of the
issuing of a certificate of incorporation in the Gazette. Certificate of
incorporation 9. (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 on the date shown in the certificate of
incorporation. Business commencement
requirements 10. (1) A
credit union incorporated under this Part shall not commence business in the
province until the guarantee corporation has given approval for that
commencement. (2) The guarantee corporation 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) All
deposits and share subscriptions taken in support of an application for
incorporation of a credit union or before a credit union is approved to
commence business shall be held in trust in the manner required by the
guarantee corporation. Name 11. (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, seals, 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 incorporated or continued under the Credit Union Act in force immediately
before the commencement of this Act. (5) Subsection (4) does not apply to the guarantee
corporation. (6) Notwithstanding subsection (1), a credit union
continued under the Credit Union 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. Prohibited names 12. (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, 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 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 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. (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 subsections (3) or (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 109, 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 (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 13. (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) Where 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. Capacity 14. A
credit union has the capacity and, subject to this Act, the rights, powers and
privileges of a natural person. Jurisdiction
outside province 15. (1) A credit union may, with the approval of the guarantee corporation, 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. (2) A credit union may enter into joint services
with other credit unions to provide services to its members who reside in the
province and to its members that move and reside outside the province. Business of
credit unions 16. (1) A
credit union may carry on the business of a credit union as permitted by the
Act and, unless otherwise restricted may, (a) receive deposits from
and operate chequing services for its members; (b) make loans to its members; (c) sell life insurance products through its branches either through an affiliate, by contractual arrangement or in the capacity of a licensed agent or broker as defined in the Insurance Adjusters, Agents and Brokers Act, including but not limited to (i) life insurance, (ii) disability insurance, (iii) annuities, (iv) segregated funds, (v) critical illness insurance, and (vi) long term care insurance; and (d) provide other
financial services including wealth management, mutual funds, financial
planning and taxation services. (2) A credit union shall not carry on a business
other than that pertaining to the business of credit unions and a credit union
shall not (a) engage in the trading
of real estate; (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 disabled 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; (d) carry on the business of an insurance company; and (e) carry on the business
of a property and casualty agent, broker or adjustment company. (3) Notwithstanding
subsections (1) and (2), a credit union may, in the manner prescribed by
regulation, enter into an arrangement for services. Coercive tied selling 17. (1) A
credit union shall not engage in coercive tied selling that imposes undue
pressure on, or coerces a person to obtain a product or service from a particular
person, including the credit union and its affiliates, as a condition for
obtaining another product or service from the credit union. (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 18. (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 19. (1) 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 or the regulations 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. (2) An act of a credit union against good faith
third party purchasers, 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 20. 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 21. 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 Registered office 22. (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 the articles that designate 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 registered office with the superintendent within 15 days after a change of
address of its registered office. Branch office 23. A
credit union may establish or relocate a branch office of the credit union as
prescribed by regulation. Records 24. 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 membership 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. Examination of
records 25. (1) The
members of a credit union, their agents and legal representatives may examine
the records referred to in paragraphs 24(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
24(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) A request 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 shall 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 guarantee corporation or a person
authorized by the guarantee corporation may examine the records of a credit
union at all reasonable times without charge. Form of records 26. (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. PART IV Member shares 27. (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 a share. (2) 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. (3) Notwithstanding subsection (2), 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. Shares other than
members' equity shares 28. (1) In
addition to member equity shares, the articles of a credit union may provide
for the issuing of surplus shares and other shares with the approval of the
superintendent. (2) Where 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. Dividend or patronage refund 29. A
credit union that has met the capital requirement prescribed in the regulations
may, with the approval of the members of the credit union, issue a dividend or
patronage refund as long as the dividend or patronage refund does not reduce
capital below that prescribed in the regulations. Purchase of
surplus shares 30. 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 that 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. Exception 31. (1) Nothing
in section 29 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 32. 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 33. 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 34. Where
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 35. (1) A member may withdraw an amount contained in his or her deposit account together with accrued interest (a) during the normal business hours of the credit union at the credit union; or (b) through electronic
withdrawal that may be provided by 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 36. (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 37. 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 on the receipt of an affidavit or other proof of death and
proof of claim that 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. Loans 38. Subject to those terms, conditions, restrictions
or limitations that 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. Lien 39. (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 which is in default 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. Liquid assets 40. (1) A credit union shall maintain liquidity in accordance with the regulations. (2) A credit union may make investments for the
purpose of meeting the requirements in relation to liquidity only in accordance
with the regulations. Investments 41. A
credit union may make investments in addition to those referred to in
subsection 40(2) only in accordance with the regulations. Doubtful loans 42. A
credit union shall maintain an allowance for doubtful loans in accordance with
the regulations. Equity 43. A
credit union shall maintain equity in accordance with the regulations. Borrowing 44. A
credit union shall not borrow money in excess of the amount prescribed by
regulation. Matching 45. 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 46. A credit union shall maintain those types and minimum levels of insurance that may be required by the guarantee corporation or as may be prescribed by regulation. Sound business and financial practices 47. A
credit union shall comply with sound business and financial practices that are set
out by the guarantee corporation. Membership 48. (1) The membership of a credit union consists of those members
defined in accordance with this Act and the articles and by-laws of the credit
union. (2) Subject to the by-laws of the credit union and
laws of general application, 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, where 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 49. (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 where the
by-laws of the credit union so provide. Membership termination 50. Membership
in a credit union may be terminated, withdrawn or refused in accordance with
the by-laws of the credit union. Remedy preserved 51. 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 52. (1) Subject
to the articles of a credit union, the members of a credit union may at an
annual general meeting or special 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) Where a credit union fails to comply with
subsection (4), the by-law, amendment or repeal is void. Members bound 53. The
articles and by-laws of a credit union bind the credit union and its members. Place of meetings 54. 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 55. The
directors of a credit union (a) shall call an annual
meeting of members to be held within 4 months, or another time that is approved
by the superintendent, 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. Record date 56. 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 57. (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 to each member entitled to
vote at the meeting. (2) Where 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 special meeting of members 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 58. (1) A
member or another person entitled to attend a meeting of members may 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 59. (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 a 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) Where 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
the by-laws of the credit union. (5) A credit union is not required to comply with
subsections (2) and (3) where (a) 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) the directors of the credit union reasonably
believe 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) 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) 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) the directors of the
credit union reasonably believe that 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) Where 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 appropriate. (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, where
it is satisfied that subsection (5) applies, may make an order that it thinks
appropriate. (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 60. (1) A
quorum at a meeting of members shall be as set out in the by-laws of the credit
union. (2) Where a quorum is not present at the opening
of, or during, a meeting of members, the members present shall adjourn the
meeting to a fixed time and place. Voting 61. (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 62. (1) Where
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 63, 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 63. A
member shall not vote by proxy at a meeting of members of a credit union. Joint membership 64. 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 65. 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 66. A
credit union may in its by-laws establish procedures to permit members to vote
by mail ballot or by other means. Requisition by
members to call meeting 67. (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. (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 59(5)(b) to (e). (4) Where 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 member calling a meeting 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 68. (1) Where
it is impractical 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 appropriate, 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 69. (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 70. 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 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,
grandchild, spouse, brother or sister or in-law of an employee of the credit
union, not necessarily living in the same residence of that employee; (f) is the solicitor of
that credit union; (g) is a representative
of a bargaining agent for the employees of that credit union; or (h) is a public employee
whose official duties are concerned with the affairs of credit unions. Terms of office 71. (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) 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 72. (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 73; or (c) is disqualified under
section 70. (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 73. (1) The members of a credit union may by ordinary resolution at a special meeting called under section 67 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 75. (3) Where a vacancy is not filled under subsection
(2) the superintendent may appoint a director to fill that vacancy. Reasons 74. (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) or (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) or (3). Vacancy 75. (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) Where 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 where the number of directors so
elected constitutes a quorum. (3) Where 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) Where 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 76. (1) Within
30 days after a change of directors occurs, a credit union shall send to the
superintendent a notice 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 appropriate. (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 77. (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
issuing or redemption of shares of the credit union other than membership
shares; or (d) requires the approval
of financial statements referred to in subsection 91(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 appointed by the directors
under subsection 78(1) and section 79 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. Appointing committees 78. (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; (d) approve a financial statement referred to in subsection 91(1); or (e) approve or amend
policies that are set by the board. Establishing committees 79. The directors of a credit union shall establish
those committees which the minister may prescribe by regulation and those
committees shall perform the duties and have the powers provided for in the
regulations. Validity of acts 80. 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 81. (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 82. (1) Directors
of a credit union who vote for or consent to a resolution authorizing a payment
that is contrary to section 29 or the payment of an indemnity that is contrary
to section 88 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) shall be commenced within 2 years from the date of having
received written notification of the complaint. Duty to report 83. A
director of a credit union who becomes aware that the credit union is unable to
make a lawful payment it is required to make shall, within 7 days after becoming
aware of it, give written notice of the matter to the guarantee corporation. Designation of
officers 84. (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; (d) approve financial statements referred to in subsection 91(1); or (e) approve or amend
policies that are set by the board. (2) A director may become an officer of the credit
union and a member of a committee but an officer cannot be a member of the
audit 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 85. The
directors of a credit union may be paid remuneration and reimbursed for those
reasonable expenses incurred in the performance of their duties, as set out in the
by-laws of the credit union. Duty of care 86. (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 87. (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 certified
mail to the registered office of the credit union within one business day 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 certified
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 82. Indemnification 88. (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 shall 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 appropriate.
(5) An applicant under subsection (4) shall give
the guarantee corporation notice of the application and the guarantee corporation
is 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 Fiscal year 89. The
fiscal year of a credit union ends on December 31 of each year. Annual returns 90. (1) A
credit union shall, within 4 months after the end of each fiscal year, or a later
time that may be approved by the superintendent, complete and file a return
with the guarantee corporation 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 guarantee corporation. (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 minister may set a filing fee payable by a
credit union to the guarantee corporation upon the filing of a return under
this section, and the minister may set additional fees for late filing. (5) A credit union shall provide to the guarantee
corporation, periodic financial reports on or before the dates that are
prescribed by regulations. Annual financial
statements 91. (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 that may be required
by this Act or the regulations, 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 guarantee
corporation, be prepared in accordance with Canadian 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 subsection (1) to the guarantee corporation. (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 92. A
credit union shall not issue, publish or circulate copies of financial
statements referred to in subsection 91(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 93. A
credit union shall, on request of a member, provide to the member a copy of the
approved financial statements and other documents referred to in subsection 91(1). Auditors 94. (1) At
the annual meeting of a credit union the members of that credit union shall
appoint an auditor who is licensed under the Public Accountancy Act. (2) 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. Auditor removal 95. (1) The
members of a credit union may at an annual meeting or 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 guarantee corporation is entitled to be represented and heard at that
meeting. Vacancy 96. (1) The directors shall immediately fill a vacancy in the office of auditor. (2) An auditor appointed by the directors to fill
a vacancy under subsection (1) holds office until the next annual meeting. Auditor appointed
by guarantee corporation 97. (1) If
a credit union does not have an auditor, the guarantee corporation may appoint
and fix the remuneration of an auditor and the auditor so appointed holds
office until an auditor is appointed in accordance with section 96. (2) The guarantee corporation may appoint an auditor to do a new audit on a credit union if the guarantee corporation determines that it is necessary and the guarantee corporation may use that report as the audited financial statement of that credit union. (3) The remuneration of an auditor appointed under
subsections (1) and (2) shall be paid by the credit union. Duty to attend
meetings 98. (1) The auditor of a credit union shall attend those meetings as requested by the board or the audit committee referred to in section 103, of the credit union. (2) The auditor shall be given not less than 10 days notice of a meeting the auditor is required to attend under this section. (3) The costs of an auditor attending meetings
under this section shall be paid by the credit union. (4) An auditor or former auditor of a credit union
who fails without reasonable cause to comply with subsection (1) commits an
offence. Examinations by
auditor 99. (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 91(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 guarantee
corporation, be conducted in accordance with Canadian generally accepted auditing
standards. Superintendent or
guarantee corporation may enlarge scope 100. (1) The
superintendent or the guarantee corporation 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 it is believed that the
public interest or the interest of the members 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 101. (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 section 99 and that 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 99(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 102. (1) The
auditor of a credit union shall make a report in writing (a) on the financial statements referred to in
subsection 91(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 Canadian generally accepted auditing standards;
and (d) reliance has been
placed on the reports of other auditors. Audit committee 103. (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 meet at least
annually with the auditor to review the financial performance of the credit
union and perform those other functions that may be prescribed by the regulations.
(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, where 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 guarantee corporation. (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 104. (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; (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 send 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 sending the
report, provide a copy of the report to the guarantee corporation. (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. (4) Where 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 to the guarantee
corporation. Additional requirements 105. (1) The
guarantee corporation may require that the auditor of a credit union report to
the guarantee corporation 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 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, the public interest may require. (3) A requirement of the guarantee corporation
under subsections (1) and (2) shall be provided in writing to the auditor. (4) The auditor of a credit union shall comply
with requirements of the guarantee corporation under subsection (1) or (2) and
shall make a written 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 under subsection (1) or (2) shall be
borne by the credit union. Access to papers 106. On
the request of the guarantee corporation, the auditor shall make available to
the guarantee corporation the working papers of the auditor used in conducting
an audit or preparing a report under this Act. Qualified
privilege 107. An
oral or written statement or report made under this Act by the auditor of a
credit union has qualified privilege. No liability 108. (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 91(1)(b) or
subsection 99(1). Amendment of
articles 109. (1) Subject
to the approval of the superintendent under section 111,
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 110. Where
the articles of a credit union are amended under section 109 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 filing and the superintendent shall refuse to
accept amended articles that are not filed within those 6 months. Certificate of
amendment 111. 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 182. Effect of
certificate 112. (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, officers
or employees, or a civil, criminal or administrative action or proceeding to
which the credit union or its directors, committee members, officers or
employees is a party. Restated articles 113. (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 the required
form shall be sent to the superintendent. (3) On receipt of restated articles of
incorporation, the superintendent shall issue a restated certificate of
incorporation in accordance with section 182. (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 114. (1) Two
or more credit unions may amalgamate and continue as one credit union. (2) A credit union that is under supervision under
Part XII shall not amalgamate without the written consent of the guarantee
corporation. Amalgamation
agreement 115. 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 6; (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 116. (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 57 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 122. (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 board of directors of any of the amalgamating credit unions. Articles of amalgamation 117. (1) Subject
to subsection 116(4), after an amalgamation has
been adopted under subsection 116(3), articles
of amalgamation 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 with a
claim against the credit union in an amount that exceeds $1,000 and at least 60%
of those creditors consent to the amalgamation. (3) A credit union may be exempt from the
requirements of paragraph (2)(a) if the guarantee
corporation consents to an exemption. (4) For the purpose of subparagraph (2)(b)(ii), adequate notice is given if (a) 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 (b) each notice states
that the credit union proposes to amalgamate with one or more specified other
credit unions in accordance with this Act providing at least 60% of creditors
with amounts exceeding $1,000 consent to the amalgamation within 30 days after
the date of the notice. Compulsory amalgamation 118. Where
a credit union that is under supervision under Part XII is ordered by its
supervisor to amalgamate in accordance with section 176(1)(i), the provisions of section 116
and subsection 117(2) do not apply to the
credit union which is ordered to amalgamate. Certificate and
effect of amalgamation 119. (1) On
receipt of articles of amalgamation, the superintendent may, where satisfied
that the amalgamation is advisable, file the articles and issue a certificate
of amalgamation in accordance with section 182.
(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 either 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 120. (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 57 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 122.
(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 guarantee corporation 121. (1) The
credit union shall, before the completion of a sale, lease or exchange referred
to in section 120, obtain the approval of the guarantee
corporation. (2) An
approval shall not be granted under subsection (1) unless the guarantee
corporation has received an affidavit made under oath or affirmation of a
director or officer from the credit union proposing to sell, lease or exchange
its property establishing, to the satisfaction of the guarantee corporation,
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) the sale, lease or exchange of the property has been consented
to by not less than 60% of creditors of the credit union with amounts exceeding
$1,000. (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 120 providing at least 60% of the
creditors with amounts exceeding $1,000 consent to the sale, lease or exchange
within 30 days from the date of the notice. Dissent 122. (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 116; (c) sell, lease or
exchange all or substantially all of its property under section 120; 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 guarantee
corporation 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 guarantee corporation. (5) The guarantee corporation 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 guarantee corporation may stipulate. Reorganization under a court order 123. (1) In
this section, "reorganization" means the reorganization of a credit
union in accordance with a court order made under (a) section 159; (b) the Bankruptcy and Insolvency Act ( (c) any other Act of the
Legislature that affects the rights of the credit union, its members or
creditors. (2) Where 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 109. (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 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 182. (6) A reorganization
becomes effective on the date shown in the certificate of amendment and the
articles of incorporation are amended accordingly. PART IX Mandatory dissolution 124. A credit union that does not have property and liabilities shall be dissolved by special resolution of the members. Voluntary dissolution
by members 125. (1) A credit union that has property or
liabilities or both may be dissolved by special resolution of the members where (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 120, sold its property,
distributed residual property and discharged all of its liabilities. (2) A credit union which is being dissolved under
this section shall prepare articles of dissolution in accordance with section 127 and that section applies in relation to the
dissolution. Voluntary liquidation
and dissolution 126 (1)
The directors, or a member in accordance with section 59, 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 the required
form shall be sent to the guarantee corporation. (5) On receipt of a statement of intent to
dissolve, the superintendent, if satisfied that the credit union shall be able
to discharge all of its obligations and liabilities before dissolution, shall
issue a certificate of intent to dissolve in accordance with section 182. (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) After the 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 the required 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 182.
(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) Where 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 127. (1) Articles
of dissolution 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 182. (3) The credit union ceases to exist on the date
shown in the certificate of dissolution. Custody of records 128. 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 129. (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
that the court thinks appropriate and, if the plaintiff's claim is established,
the court may refer the proceedings to an 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 130. (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) Where 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) Where 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 129, 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. Effect of Bankruptcy
and Insolvency Act ( 131. (1) This
Part does not apply to a credit union that is bankrupt within the meaning of
the Bankruptcy and Insolvency Act ( (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 and Insolvency Act ( PART X Application 132. This
Part applies to the Credit Union Deposit Guarantee Corporation. Continuation 133. The
Credit Union Deposit Guarantee Corporation existing under the Credit Union Act in force 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. Duties 134. The
duties 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 practices and sound financial
policies and procedures by credit unions, and (ii) establishing and
implementing loss prevention programs and other controls; (d) to act as supervisor
of a credit union; and (e) to do those other
things that may be required or authorized by this Act or the regulations. Capacity 135. The
guarantee corporation has the capacity, rights, powers and privileges of a
natural person. Powers 136. The
guarantee corporation may (a) determine the amounts
of money to be levied and collected from credit unions for the purpose of
section 147, 148
and 154; (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 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 that 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 that 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) set out sound
business and financial practices for credit unions; (k) issue directives in
relation to sound business practices and sound financial policies and
procedures to be followed by credit unions including directives in relation to
those matters referred to in paragraph (i); (l) make available to
credit unions assistance including financial assistance for the purpose of
stabilization on terms and conditions that it considers appropriate; (m) assume the costs of
the winding up of credit unions where the assets of a credit union are insufficient
to cover the costs; (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 137. (1) The affairs of the guarantee
corporation shall be administered by a board of directors of not more than 7
members who shall be appointed by the minister in accordance with the
regulations. (2) A
person who is a citizen of (3) Notwithstanding
subsection (2), an employee, a committee member or a director of a credit union
trade association or of a credit union shall not be appointed as a director of
the guarantee corporation. Officers 138. (1) The chairperson, vice-chairperson and
the secretary-treasurer of the board of directors of the guarantee corporation
shall be appointed in accordance with the regulations. (2) The
board of directors of the guarantee corporation may appoint those other
officers and committees that it considers necessary to fulfil the purposes of
the guarantee corporation under this Act. (3) Notwithstanding
paragraph 143(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 of the guarantee corporation may determine the duties of those employees.
Vacancy 139. Where
a vacancy occurs in the board of directors
of the guarantee corporation, the minister shall fill the vacancy in
accordance with section 137. Office ceases 140. A
member of the board of directors 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 141. 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 142. (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.
143. (1) The
board of directors of the guarantee corporation, 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 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) setting 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 144. (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 a payment in accordance with paragraph 146(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 the
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 that 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 a 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 145. (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 devices 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 146. 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 144; (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 that may be necessary for or
incidental to the attainment of the purposes of the guarantee corporation. Determination of
levy 147. 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 148. The
guarantee corporation shall levy and collect from credit unions those amounts
that may be determined by the guarantee corporation, in a manner and at those
times as the guarantee corporation may direct. Loans to
guarantee corporation 149. (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
that the minister considers appropriate, (a) make loans or
advances to the guarantee corporation; and (b) guarantee 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 150. The
board shall keep proper records of the affairs of the guarantee corporation. Fiscal year 151. The
fiscal year of the guarantee corporation ends on December 31 in each year. Audit 152. The
books and accounts of the guarantee corporation shall be examined, checked and
audited at least once each year. Application 153. Sections
80 to 88, 91, 92, 94 to 99 and 101 to 104, 107 and 108 apply,
with the necessary changes, to the guarantee corporation. Payment of levy 154. A
credit union shall pay to the guarantee corporation the amounts levied by the
guarantee corporation. Report to
minister 155. (1) The
guarantee corporation shall, within 6 months 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 that may be prescribed. (2) The
guarantee corporation shall, within 120 days after the end of each fiscal year
or within the extended period that the minister may approve, send to each
credit union, a copy of its financial statements, with the auditors report on
them, for that fiscal year. PART XI Definitions 156. In this Part (a) "action"
means an action under this Act; and (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, (iii) a director or an
officer or a former director or officer of a credit union or the guarantee
corporation, (iv) a creditor of a
credit union or the guarantee corporation, (v) the superintendent, (vi) a credit union, (vii) the guarantee
corporation, or (viii) another person who,
in the discretion of the court, is a proper person to make an application under
this Part. Derivative action 157. (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 30 days 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 30 days 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 158. In
connection with an action brought or intervened in under section 157, the court may make an order it thinks
appropriate 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 159. (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 a credit union or the
guarantee corporation, the court is satisfied that (a) an act or omission of
the credit union or the guarantee corporation effects a result; (b) the business or
affairs of a credit union 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 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 appropriate including, (a) an order restraining
the conduct complained of; (b) an order placing a
credit union under supervision under section 173;
(c) an order placing a
credit union under supervision under section 176(1)(i)
for the purpose of liquidation and dissolution; (d) an order to regulate the affairs of a credit union 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 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 or the
guarantee corporation is a party, and compensating the credit union or the
guarantee corporation or other party to the transaction or contract; (h) an order directing
rectification of the registers or other records of the credit union under
subsection 161(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, in the case of (a) an amendment to the
articles, the directors shall immediately comply with section 109; 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 160. (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 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 that the court thinks appropriate and, if the court determines that
the interest of 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. Rectification of
register 161. (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, the credit union or a member or other security holder or a
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 appropriate including, an order (a) requiring the
registers and records of the credit union to be rectified; (b) restraining the
credit union 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 whether the issue
arises between 2 or more members or security holders, or between the credit
union 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 162. If
a credit union or the guarantee corporation, or a director, officer, member, employee,
agent, auditor, trustee, or supervisor of them does not comply with (a) this Act or the
regulations; (b) the articles or
by-laws of the credit union or the guarantee corporation; or (c) an order of the
superintendent or the guarantee corporation made under this Act or the
regulations, 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 a further order it thinks appropriate. Application for
direction 163. 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 another order it thinks
appropriate. Appeal 164. (1) A
person may appeal a decision or an order of the superintendent or the guarantee
corporation 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 superintendent
or the guarantee corporation to make another decision or order that the superintendent
or the guarantee corporation is authorized to make under this Act; or (c) substitute its
decision or order for that of the superintendent or the guarantee corporation. Review and examination 165. The
superintendent or the guarantee corporation (a) shall review
information and returns received from credit unions and their directors,
officers, committee members or employees; (b) may examine the
business and affairs of a credit union; (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 has complied with this Act, or an order or direction. Examination powers 166. (1) For
the purpose of the examination referred to in section 165,
a credit union shall prepare and submit to the superintendent or the guarantee
corporation, the information with respect to its business and affairs, in
addition to the returns required under Part (2) Upon an examination, the superintendent, the
guarantee corporation or a person that the superintendent or the guarantee
corporation may authorize has the powers of a commissioner appointed under the Public Inquiries Act, 2006. Voluntary compliance 167. (1) Where,
in the opinion of the superintendent or the guarantee corporation, a credit
union is committing an act or pursuing a course of conduct that (a) does not comply with
this Act or the regulations; (b) might reasonably be
expected, if continued, to result in a state of affairs that would not be in
compliance with this Act or the regulations; (c) does not comply with
an undertaking given or an agreement made with the superintendent or guarantee
corporation under this Act or the regulations; or (d) constitutes a
practice that might prejudice or adversely affect the interests of depositors
or creditors, the credit union 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 guarantee corporation; (b) be in writing; and (c) bind the credit union
from the time it is approved by the guarantee corporation. (3) Where a voluntary compliance program is
entered into, the guarantee corporation shall not be prevented from making
orders against a credit union (a) on matters covered in
the voluntary compliance program where (i) the program is not complied with, (ii) all the facts related to the matter covered by the program were not known by the guarantee corporation at the time the program was entered into, or (iii) there has been a
deterioration in the condition of the credit union; and (b) on matters not covered
in the program. (4) The guarantee corporation, on the request of a
credit union may approve the alteration of a voluntary compliance program entered
into under this section. Compliance order 168. (1) Where, in the opinion of the superintendent or
the guarantee corporation, a credit union is committing an act or pursuing a
course of conduct that (a) does not comply with this Act or the regulations; (b) might reasonably be expected, if continued, to result in a
state of affairs that would not be in compliance with this Act or the
regulations; (c) does not comply with a voluntary compliance program under
section 167; (d) does not comply with an undertaking given or agreement made
with the superintendent or the guarantee corporation under this Act or the
regulations; or (e) constitutes a practice that might prejudice or
adversely affect the interests of depositors or creditors, the superintendent
or the guarantee corporation may (f) give notice to the credit union of an
intention to order the credit union to cease doing an act or to cease pursuing
a course of conduct identified by the guarantee corporation or the
superintendent; (g) order the credit union to cease doing an act or to cease pursuing
a course of conduct identified by the superintendent or the guarantee
corporation; and (h) order that the credit union perform those acts that, in the
opinion of the superintendent or the guarantee corporation, are necessary to
remedy the situation. (2) The credit union may, by written notice served
on the superintendent or the guarantee corporation within 15 days after the
service of the notice on the credit union under subsection (1), request a
hearing before the superintendent or the guarantee corporation. (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 or the guarantee
corporation may make an order and that order shall take effect immediately or
at a later date that 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, creditors 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 or the guarantee corporation is requested. (5) A request for a hearing under subsection (4)
shall be in writing and served on the superintendent or the guarantee
corporation. (6) Where a hearing is requested under subsection
(4), the superintendent or the guarantee corporation 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 under this section, a copy of the order shall be sent to each
director of the credit union. (8) The superintendent or the guarantee
corporation may, after giving the credit union named in the order an
opportunity to be heard, confirm, vary or revoke an order made under this
section.
Offence 169. (1) A
person who makes or assists in making a report, return, notice or other
document required by this Act or the regulations to be sent to the
superintendent, the guarantee corporation 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 $1,000 and not exceeding $10,000 or to imprisonment for a term not
exceeding 6 months, or to both the fine and imprisonment. (2) Where a person who is found 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 authorizes, permits or acquiesces in the offence is also guilty
of an offence and liable on summary conviction to a fine not less than $10,000
and not exceeding $50,000 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 170. A
person who, without reasonable cause, contravenes a provision of this Act or
the regulations for which another punishment is not provided in this Act or the
regulations is guilty of an offence and is liable on summary conviction to a
fine not less than $1,000 and not exceeding $10,000 in the case of a natural
person and not less than $10,000 and not exceeding $50,000 in the case of a
corporation. Compliance order
following offence 171. (1) Where a person is convicted of an offence under this Act or
the regulations, the court may, in addition to a punishment imposed, order the
person to comply with the provision of the Act or the regulations for the contravention
of which that person has been convicted. (2) A prosecution under this Act or the regulations shall be started within 2 years of (a) the date upon which the offence is alleged to have been committed; or (b) the date upon which the guarantee corporation becomes aware of the alleged offence, whichever is later. (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 172. (1) Notwithstanding
anything contained in this Part, where an action could be brought against a
person by a credit union for loss or damage suffered by or an accounting due to
the credit union by reason of the negligence of the person or the failure of
the person to comply with this Act, or the regulations or with the articles or
by-laws of the credit union or orders, directions or notices of the superintendent
or the guarantee corporation, where (a) the action has not
been brought, the superintendent or the guarantee corporation may, without
leave, bring and maintain the action; or (b) the action has been
brought, the superintendent or 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, where a grant, loan or advance has been made by the guarantee corporation,
the money 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, the supervisor or a person directed by them, for an act or thing
done or omitted under this Act or the regulations that was done or omitted in
good faith. PART XII Supervision of
credit union 173. Where
the guarantee corporation is satisfied that a credit union is carrying on its
business in a manner that contravenes this Act or the regulations, sound
business or financial practices 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; or (e) a credit union has
failed to comply with an order of the superintendent or of the guarantee
corporation, the guarantee corporation may give notice to the credit union that it
is declared to be under the supervision of the guarantee corporation or another
person appointed by the guarantee corporation. Supervisor 174. The guarantee corporation or a supervisor
appointed by the guarantee corporation shall act as a supervisor of a credit
union that is placed under supervision under section 173. Length of supervision 175. (1) Where a credit union is declared to be
under supervision under section 173,
the credit union remains subject to supervision until the guarantee corporation
releases the credit union from supervision or (a) the supervisor appointed under section 174 applies to the guarantee corporation to have the
credit union released from supervision; or (b) the credit union applies in writing to the guarantee corporation,
under notice to the supervisor, to be released from supervision, stating
reasons in support of its application, and the guarantee
corporation approves the application and by notice to the credit union and the
supervisor, releases the credit union from supervision. (2) Where a credit union is declared to be under supervision under section
173, that supervision
ceases when (a) the credit union is liquidated, dissolved or amalgamated; or (b) in the case of a credit union that has been placed under supervision
by the court, the court has ordered the release of the credit union from
supervision. Powers of supervisor 176. (1) Notwithstanding
a provision of this Act or the regulations and subject to the approval of the guarantee
corporation, or to an order of the court, where a credit union has been placed
under the supervision of the guarantee corporation or a person appointed as
supervisor under section 174, the supervisor
may (a) exercise or direct
the exercise of the powers of the credit union; (b) inspect the affairs
of the credit union and make inquiries from its officers, directors, committee
members, employees and members; (c) require the credit union to correct practices
that, in the opinion of the supervisor, are contributing to the financial difficulties
suffered by the credit union or are likely to contribute to the unsound conduct
of its affairs; (d) order the credit union and its directors,
committee members, officers and employees to refrain from exercising those
powers of the credit union 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 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 and, in the name of the credit union, preserve, maintain,
realize, dispose of and add to the property of the credit union, receive the
incomes and revenues of the credit union and exercise all the powers of the
credit union and of its directors, officers, committees and employees; (g) remove the directors of the credit union and its officers, committee members, employees and agents from the property and business of the credit union; (h) appoint interim
directors of the credit union; (i) in the case of a
credit union, reorganize, amalgamate, dissolve, wind-up, liquidate or otherwise
dispose of the business of the credit union; and (j) exercise those other
powers that may be granted to it by order of the court. (2) The guarantee corporation or a supervisor
appointed under section 174 shall ensure that
the interests of all creditors of a credit union are properly and lawfully provided
for. Report 177. A
supervisor appointed by the guarantee corporation under section 174 may be required by the guarantee corporation to submit
a report containing (a) an assessment of the
financial condition of the credit union 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 guarantee corporation may require. Accounting 178. A
supervisor appointed under section 174 shall,
upon request of the guarantee corporation and upon discharge, fully account to
the guarantee corporation for the supervision of the credit union. Notice 179. (1) A
notice or document required by this Act, or by the by-laws of a credit union,
to be sent to a person entitled to
receive notice from the credit union 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
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 in the last notice filed under section 76. (2) A notice or document mailed in accordance with
subsection (1) is considered to have been received within 5 business days from
the date it was postmarked, 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 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 is not required to send a further notice or document to
the person until the credit union is informed, in writing, of the new address
of that person. (4) Where the by-laws of a credit union 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 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. (6) Where the by-laws of a credit union provide
for the giving of notice to members under subsection (1) electronically, the
notice is considered to have been received on the day of transmission, if the
document is transmitted before 4 p.m., or the next day that is not a Saturday,
Sunday or a holiday, if the document is transmitted after 4 p.m. unless there
are reasonable grounds for believing that the person did not receive the notice
or document at that time or at all. Service of notice 180. A notice or document required to be sent to or served upon a credit union may be sent to the registered office of the credit union shown in the last prescribed notice filed with the superintendent, (a) by regular mail and, if so sent, it is considered to have been received or served within 5 business days from the date it was postmarked; (b) electronically, and if so sent, the notice is considered to have been received on the day of transmission, if the document is transmitted before 4 p.m., or the next day that is not a Saturday, Sunday or a holiday, if the document is transmitted after 4 p.m; and (c) delivered personally
or by courier, and if so sent, the notice is considered to have been received
upon delivery unless there are reasonable grounds for believing that the credit union
did not receive the notice or the document at that time or at all. Waiver of notice or delivery 181. (1) Where a notice is required by this Act to be given, the giving of the notice may be waived, or the time for the giving of the notice may be waived or abridged with the consent in writing of the person entitled to the notice. (2) Where a document is required by this Act to be
delivered the delivering of the document may be waived or the time for the
delivering of the document may be waived or abridged with the consent in
writing of the person entitled to the document. Certificates 182. (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 191.
(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 183. (1) A
certificate issued on behalf of a credit union 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 in a trust indenture or other contract to which the credit union is a
party may be signed by a director or officer of the credit union unless
verification is required under section 185. (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 (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, 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 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 184. Where
a notice or document is required to be sent to the superintendent or the
guarantee corporation under this Act, the superintendent or the guarantee
corporation may accept a copy of the notice or document. Verification 185. (1) The
superintendent or the guarantee corporation 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, by
the superintendent or by the guarantee corporation to be verified may be
verified by affidavit made under oath or affirmation. (3) The superintendent or the guarantee
corporation may require a credit union 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. Statement of
intent 186. (1) In
this section, "statement" means a statement of intent to dissolve or
statement of revocation of intent to dissolve referred to in section 126. (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 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 required fees the superintendent shall, subject to being
satisfied that it is advisable, (i) endorse on each of
the 2 original copies of the articles or statement the certificate in the
required form indicating the date on which the articles or statement become
effective, (ii) file one original copy
of the articles or statement endorsed in accordance with subparagraph (i), (iii) send the other original copy 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 187. The
superintendent may alter a notice or document, other than an affidavit or
statutory declaration, if so authorized in writing by letter, facsimile or
electronic mail by or on behalf of the person who sent the notice or document
to the superintendent. Corrected
certificate 188. (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) require 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 189. (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 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 190. (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 a copy required to be furnished under subsection 189(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 186 after 6 years from the date
the superintendent receives it. Superintendent 191. (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 issue directives with
respect to the interpretation, clarification of this Act and the powers
referred to in subsection (2). Register of
credit unions 192. (1) The
guarantee corporation 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). Regulations 193. 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) 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; (e) 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; (f) respecting
arrangements for the provision of a service in accordance with section 16; (g) restricting the
business and activities that may be carried on by a credit union or the
guarantee corporation and respecting those restrictions; (h) respecting the
creation of a subsidiary; (i) respecting the manner
in which a deposit account is to be dealt with for the purpose of section 34; (j) respecting the
payment of funds from an account under section 37;
(k) 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; (l) 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; (m) respecting the liquid
assets to be maintained by a credit union under section 40; (n) respecting the making
of investments by a credit union including prohibitions, conditions,
restrictions or limitations in relation to those investments; (o) respecting an
allowance for doubtful loans to be maintained by a credit union; (p) respecting the equity
to be maintained by a credit union; (q) respecting the amount
that may be borrowed by a credit union under section 44;
(r) respecting matching
under section 45; (s) respecting insurance
to be maintained by a credit union; (t) requiring directors
and officers of credit unions to meet requirements respecting their training; (u) respecting the manner
in which a member of a credit union may appeal a termination of membership; (v) respecting the
articles of amalgamation and dissolution that may be required; (w) respecting the
committees the credit union is required to establish and the duties and powers
of those committees; (x) respecting
information to be shown in the return of a credit union for the purpose of
section 90; (y) respecting financial
statements and auditors reports for the purpose of this Act and the
regulations; (z) respecting
information to be disclosed to the members of a credit union for the purpose of
subsections 91(1) and (3); (aa) requiring or authorizing the guarantee corporation to do certain
things for the purpose of section 134; (bb) respecting the
making of investments by the guarantee corporation including prohibitions,
conditions, restrictions or limitations in relation to those investments; (cc) respecting, for the purpose of section 147, 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; (dd) respecting information to be included in the report of the
guarantee corporation for the purpose of section 155;
(ee) requiring or authorizing the guarantee corporation to do certain
things for the purpose of section 136; (ff) respecting the appointment of persons as
directors of the guarantee corporation under subsection 137(1) and respecting appointments of the officers of
the guarantee corporation under subsection 138(1);
(gg) respecting the amount to which deposits are insured for the purpose
of section 144; (hh) respecting the duties and powers of the superintendent or the
guarantee corporation; (ii) respecting the
delegation of the administration of this Act to the guarantee corporation; (jj) respecting the filing of information and documents required for the
purpose of this Act; (kk) defining a word or a phrase used in this Act but not defined in
this Act; and (ll) generally, to give effect to the purposes of this Act. Fees and forms 194. The
minister may set fees required to be paid under this Act and may approve forms
for the purpose of this Act. PART XIV Transitional 195. (1) Upon
the commencement of this Act all (a) articles of a credit
union incorporated under the Credit Union
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 Credit Union Act, in force immediately
before the commencement of this 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 that 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 or the guarantee corporation lawfully
incorporated or continued under the Credit
Union 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 Credit Union 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 or the guarantee corporation is inconsistent with the provisions of this Act, the credit union or the guarantee corporation shall file with the superintendent, amending articles, by-laws or resolutions that comply with this Act within one year of the commencement of this Act. Amending instruments 196. Amendments to the articles, by-laws, resolutions and constating instruments of a credit union or guarantee corporation incorporated under the Credit Union Act in force immediately before the commencement of this Act shall be made in accordance with this Act.
SNL1995 cC-37.1 197. (1) The Credit (2) The Credit Union Deposit Guarantee Regulations are repealed. (3) The Proclamation bringing the Credit Union Act
into force, Commencement 198. This Act comes into force on ©Earl G. Tucker, Queen's Printer |