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Credit Unions and Caisses Populaires Act, 1994

S.O. 1994, CHAPTER 11

Historical version for the period November 30, 2004 to March 8, 2005.

Amended by: 1997, c. 19, s. 5; 1997, c. 28, ss. 52-63; 1999, c. 6, s. 19; 1999, c. 12, Sched. I, s. 2; 2001, c. 8, s. 30; 2002, c. 18, Sched. H, s. 3; 2002, c. 24, Sched. B, ss. 25, 32; 2004, c. 8, s. 46, Table, s. 47 (1); 2004, c. 17, s. 32.

CONTENTS

PART I
INTERPRETATION

1.

Definitions

2.

Joint shareholders

3.

Subsidiary

4.

Holding body corporate

5.

Affiliation

6.

Controlling body corporate

7.

Member

8.

Shareholder

PART II
ADMINISTRATION

9.

Application of Corporations Act

10.

Delegation of powers by Minister

PART III
ESTABLISHING A CREDIT UNION

Incorporation

12.

Corporate charter

13.

Articles of incorporation

14.

Contents of articles

15.

Application for incorporation

16.

Certificate of incorporation

17.

Effect of certificate

18.

Appeal re refusal of certificate

19.

Language and form of name

19.1

May use other name

20.

Prohibition re names

21.

Restrictions re names

22.

Reserving a name

23.

Location of head office

Objects and Powers

24.

Objects

25.

Powers

26.

Acting outside powers

Miscellaneous

27.

Indoor management rule

PART IV
MEMBERSHIP

Who May Be Member

28.

Membership

29.

Becoming a member

30.

Membership limitation

31.

Admissions outside bond of association

32.

Retaining membership

33.

Register of members

34.

Corporate and partnership members

Voting

35.

One vote

36.

Mail balloting

Rights and Liabilities

37.

Liability of members

38.

Not bound by trust

39.

Membership shares in trust

40.

Joint accounts

41.

Members under age of 18 years

Death, etc.

42.

Transmission of shares

43.

Payment of money re deceased member

Liens and Credits

44.

Lien for liability

45.

Unclaimed credits

Withdrawals and Expulsions

46.

Withdrawal of members

47.

Expulsion of members

48.

Payment to withdrawing and expelled member

49.

Appeal from expulsion

50.

Representative action

PART V
CAPITAL STRUCTURE

Shares

51.

Classes of shares

52.

Membership shares

53.

Other shares

54.

Shares in series

55.

Proxies

56.

Pre-emptive right

57.

Conversion privileges

Issuing Shares

58.

Power to issue shares

59.

Consideration

60.

Shares non-assessable

Redemption and Cancellation of Shares

61.

Holding own shares

62.

Purchase and redemption of shares

63.

Cancellation of shares

64.

Sale of shares

Dividends

65.

Declaration of dividend

66.

Declaration of patronage return

67.

Restriction on dividends, etc.

Stated Capital

68.

Stated capital account

69.

Adjustment due to conversion

70.

Addition due to debt conversion

71.

Reduction due to purchase, etc.

72.

Reduction by special resolution

73.

Recovery by action

Transfer of Securities

74.

Application of Business Corporations Act

Offering Statement

75.

Selling securities

76.

Permitted sellers

77.

Offering statement

78.

Receipt for offering statement

79.

Renewal of receipt

80.

Material change

81.

Distribution of statements

82.

Effect of misrepresentation

83.

Restrictions on transfer of securities

PART VI
CAPITAL AND LIQUIDITY

84.

Adequacy of capital and liquidity

85.

Additional requirements

86.

Variation of requirements

87.

Appeal of decision

88.

Valuation of asset

89.

Report re adequacy

90.

Provision for losses and accrued interest

PART VII
GOVERNING THE CREDIT UNION

Directors

91.

Qualifications of directors

92.

Disqualified individuals

93.

Number of directors

94.

Election of board

95.

Term of office

96.

Quorum

97.

Vacancies

98.

Ceasing to hold office

99.

Removal by board

100.

Removal by members

101.

Removal by Superintendent

102.

Statement re opposition

103.

Statement on resignation

Powers and Duties of the Board

104.

Duties of the board

105.

By-law powers

106.

Remuneration of directors

107.

When by-law effective

108.

Restriction re directors’ remuneration

Executive Committee

109.

Executive committee

Credit Committee

110.

Credit committee

111.

Eligibility for membership

112.

Election of members

113.

Training program

114.

Quorum

115.

Vacancies

116.

Ceasing to hold office

117.

Removal by committee

118.

Removal by members

119.

Committee meetings

120.

Reports by committee

Duties of Credit Committee

121.

Duties of committee

122.

Loan officers

123.

Delegation of loan approvals

124.

Prohibition re loans

Audit Committee

125.

Audit committee

126.

Eligibility for membership

127.

Election of members

128.

Training program

129.

Quorum

130.

Vacancies on elected committees

131.

Vacancies on appointed committees

132.

Ceasing to hold office

133.

Committee meetings

134.

Reports by committee

135.

Removal by committee

136.

Removal by members

Powers and Duties of Audit Committee

137.

General

138.

Duties re misappropriation

139.

Power to call meeting

Officers

140.

Officers

141.

Duties of corporate secretary

Duties of Directors, Officers and Committee Members

142.

Duty of confidentiality

143.

Confidentiality re members

144.

Duty of care

145.

Duty to comply

Conflicts of Interest

146.

Disclosure of interest

147.

Voting

148.

Avoidance standards

149.

Prohibition re acting for credit union

Miscellaneous

150.

Validity of actions

151.

Requirement for bond

152.

Liability of directors, etc.

153.

Specific liability of directors

154.

Contribution

155.

Reliance on statement

156.

Insurance for directors and officers

157.

Indemnity for directors, etc.

158.

Application for indemnification

Auditor

159.

Appointment of auditor

160.

Qualification as auditor

161.

Ineligibility as receiver

162.

Remuneration

163.

Replacement of auditor

164.

Removal of auditor

165.

Notice re resignation, etc.

166.

Auditor for subsidiaries

Rights and Duties of Auditors

167.

Right of access

168.

Right to attend meetings

169.

Auditor’s report

170.

Duty at meetings

171.

Extended examination

172.

Duty to report contravention, etc.

PART VIII
BUSINESS POWERS

Permitted Business Activities

173.

Permitted activities

Restrictions on Powers

174.

Ancillary businesses

175.

Restriction re partnerships

176.

Restrictions on insurance

177.

Restrictions on fiduciary activities

178.

Guarantees

179.

Appointment of receiver, etc.

Deposits

180.

Deposits accepted from members, etc.

181.

Prohibition re amount of withdrawal

182.

Withdrawals by negotiable instrument

Debt Obligations

183.

Borrowing power

184.

General prohibition re pledging of assets

185.

Pledging assets as security

186.

Restrictions on subordinated indebtedness

187.

Limit imposed by Superintendent

188.

Borrowing from other credit unions

189.

Monitoring by board

Investment and Lending Policies and Procedures

190.

Prudent standards

191.

Investment and lending policy

192.

Changes required by Superintendent

Loans

193.

Restrictions re loans

194.

Loans to members only

195.

Prescribed lending limits

196.

Lending licence

197.

Loan workouts

Cost of Borrowing

197.1

Definition of “cost of borrowing”

197.2

Rebate of borrowing costs

197.3

Disclosure of cost of borrowing

197.4

Additional disclosure – term loans

197.5

Disclosure in applications for credit cards, etc.

197.6

Disclosure where credit cards, etc., issued

197.7

Additional disclosure: loans to which ss. 197.4 and 197.6 do not apply

197.8

Statement re mortgage renewal

197.9

Disclosure in advertising

197.10

Regulations re disclosure

Investments

198.

Eligible investments

199.

Restriction re single investment

200.

Investment in subsidiaries

201.

Investment in another credit union

202.

Status of investments upon amalgamation, etc.

Transfer of Assets

203.

Transfer of assets

204.

Superintendent’s approval

205.

Directed transfer

206.

Interpretation

PART IX
RESTRICTED PARTY TRANSACTIONS

207.

General prohibition

208.

Loans to officers

209.

Regulations

210.

Interpretation

PART X
MEETINGS

211.

Notice of meetings

212.

Annual meeting

213.

Financial statements

214.

General meetings

215.

Proposals

216.

Refusing proposal

217.

Requisition for members’ meeting

218.

Telephone and electronic meetings

219.

Dissent of director

220.

Meeting required by Superintendent

221.

Annual statement to be given to members

222.

Inspection of books

223.

Financial statements of subsidiaries

224.

Branches

PART XI
RETURNS AND INSPECTIONS

225.

Required information

226.

Annual return

227.

Examinations by Superintendent

228.

Seizure of documents and records

229.

Inspection by appointee of Superintendent

Registers and Documents

230.

Register of members

231.

Documents to be kept

232.

Form of records

233.

Copies of by-laws

PART XII
ENFORCEMENT

234.

Superintendent’s order

235.

Order may be without a hearing

236.

Appeal

237.

Disposal of unauthorized investments

238.

Call of unauthorized loans

239.

More than fair value

240.

Suspension of business

PART XIII
LEAGUES

241.

Incorporating leagues

242.

Passing of by-laws

243.

Application of Act

244.

Application of Federal Act

245.

Members

246.

Admission to membership

247.

Member withdrawal

248.

Directors

PART XIV
DEPOSIT INSURANCE CORPORATION OF ONTARIO

249.

Corporation continued

250.

Board of directors

251.

Term of office

252.

Duties of board

253.

No liability for acts in good faith

254.

Keeping books

255.

Auditor

256.

Annual report

257.

Annual examination of Superintendent

258.

Furnish information

259.

Tabling reports

260.

Information to Minister

261.

Objects

262.

Ancillary powers

263.

Subsidiaries

Powers and Duties of Corporation

264.

By-laws

265.

Powers of investigation

266.

Prohibition as to holding out insured

267.

Advertising

268.

Fiscal year

269.

Investment of funds

270.

Duty to insure

271.

Deposits with credit unions

272.

Preparatory examination

273.

Insuring credit unions

274.

Cancellation of deposit insurance

Stabilization Fund and Annual Premium

275.

Stabilization fund

276.

Deposit Insurance Reserve Fund

277.

Overdue charges

278.

Repayments

279.

Annual examination of credit unions

280.

Examination of leagues

281.

Contents of examiner’s report

Stabilization Authorities

282.

Stabilization authority for credit unions

283.

Designation

284.

Duration of designation

285.

Supervision by stabilization authority

286.

Appeal

287.

Powers of stabilization authority

288.

Approval of by-laws

289.

Powers when credit union supervised

290.

Expenses of stabilization authority

291.

No liability for acts in good faith

292.

Revoking designation

293.

When designation revoked

Administration

294.

Administration by Corporation

295.

Administrator’s powers

PART XV
DISSOLUTION, AMALGAMATION AND REORGANIZATION

296.

Definition

297.

Dissolution where no assets

298.

Voluntary winding up

299.

Liquidator’s account and dissolution

300.

Winding up by court order

301.

Dissolution by Superintendent

302.

Liability of members and shareholders to creditors

303.

Forfeiture of undisposed property

304.

Responsibilities of liquidator

305.

Distribution of property

306.

Payment of costs and expenses

307.

Powers of liquidator

308.

Notice of winding-up proceedings

Amalgamations

309.

Amalgamation of credit unions

310.

Compulsory amalgamation

Reorganization

311.

Articles of amendment

312.

Class vote

313.

Required documentation

314.

Certificate of amendment

315.

Restatement of articles

Transition

316.

Management by Corporation

PART XVI
REGULATIONS

317.

Regulations: general

318.

Regulations: offering statements

319.

Regulations: capital adequacy

320.

Regulations: training programs

321.

Regulations: audit committee

321.1

Forms

321.2

Reports

321.3

Circulars and proxies

321.4

Statements

321.5

Report on capital adequacy

321.6

Fees

PART XVII
OFFENCE

322.

Offence, general

323.

Offences, other

324.

Order to comply

325.

Restitution

326.

Repaying benefits

327.

Order to comply

328.

Restricted party transaction

329.

Effect of contravention

330.

Effect of penalty

331.

Limitation period

PART XVIII
MISCELLANEOUS

332.

Extra-provincial credit unions

334.

Review

335.

Delivery of notice

PART I
INTERPRETATION

Definitions

1. In this Act,

“affiliate” means an affiliated body corporate within the meaning of section 5; (“membre du même groupe”)

“articles of incorporation” or “articles” means the original or restated articles of incorporation, articles of amalgamation, articles of amendment, memorandum of association, a special Act or other instrument by which a credit union is incorporated and includes any amendment thereto; (“statuts constitutifs” ou “statuts”)

“association of credit unions” means a body corporate incorporated by ten or more credit unions to act as their stabilization authority; (“association de caisses”)

“auditor” means a person who is a public accountant licensed under the Public Accountancy Act and includes a partnership of auditors or a firm of accountants; (“vérificateur”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “auditor” is amended by the Statutes of Ontario, 2004, chapter 8, section 46, Table by striking out “Public Accountancy Act” and substituting “Public Accounting Act, 2004”. See: 2004, c. 8, ss. 46, Table; 51 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the French version of the definition of “auditor” is amended by the Statutes of Ontario, 2004, chapter 8, subsection 47 (1) by striking out “comptable public” and substituting “expert-comptable”. See: 2004, c. 8, ss. 47 (1), 51 (2).

“board” means, with respect to a credit union, its board of directors; (“conseil”)

“body corporate” means any body corporate with or without share capital and whether or not it is a corporation to which this Act applies; (“personne morale”)

“borrow” does not include the taking of deposits; (“emprunter”)

“by-law” means a by-law approved under this Act, and includes any amendment or revocation of a by-law approved under this Act; (“règlement administratif”)

“Commission” means the Financial Services Commission of Ontario established under the Financial Services Commission of Ontario Act, 1997; (“Commission”)

“Corporation” means the Deposit Insurance Corporation of Ontario; (“Société”)

“court”, except where the context indicates otherwise, means the Ontario Court (General Division); (“tribunal”)

“credit union” means a corporation incorporated as a credit union or caisse populaire under this Act or a predecessor of this Act; (“caisse”, “caisse populaire”)

“debt obligation” means a bond, debenture, note or other evidence of indebtedness of an entity, whether secured or unsecured; (“titre de créance”)

“deposit” includes money deposited in a credit union under a federal or provincial registered savings plan or fund; (“dépôt”)

“deposit insurer” means the Deposit Insurance Corporation of Ontario; (“organisme d’assurance-dépôts”)

“depositor” means a person with funds on deposit with a credit union; (“déposant”)

“entity” means a body corporate, trust, partnership, fund, an unincorporated organization, Her Majesty in right of Canada or of a province, an agency of Her Majesty in either of such rights and the government of a foreign country or any political subdivision thereof and any agency thereof; (“entité”)

“financial institution” means,

(a) a bank,

(b) a corporation registered under the Insurance Act or the Investment Contracts Act,

(c) a corporation registered under the Loan and Trust Corporations Act,

(d) an entity that is,

(i) incorporated or formed by or under an Act of the Parliament of Canada or of the legislature of a province, and

(ii) primarily engaged in dealing in securities, including portfolio management and investment counselling,

(e) a credit union, and

(f) a league; (“institution financière”)

“financial statement” means a financial statement referred to in subsection 212 (4); (“état financier”)

“firm of accountants” means,

(a) a partnership, the members of which are accountants engaged in the practice of accounting, or

(b) a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (“cabinet de comptables”)

“incorporator” means an individual who signs articles of incorporation; (“fondateur”)

“league” means a corporation incorporated as a credit union league or federation under this Act or a predecessor of this Act; (“fédération”)

“member” means a person who is a member or enrolled as a member of a credit union under this Act, the articles and the by-laws of the credit union governing membership; (“sociétaire”)

“membership share” means an interest in the equity of a credit union that confers the rights referred to in subsection 52(1); (“part sociale”)

“Minister” means the Minister of Finance; (“ministre”)

“officer”, in respect of a credit union, means,

(a) the chair of the board, a vice-chair of the board, the president, a vice-president, the secretary, an assistant secretary, the treasurer, an assistant treasurer and the general manager,

(b) any individual who performs functions for the credit union normally performed by a person mentioned in clause (a), and

(c) any other individual designated as an officer by by-law or by resolution of the directors; (“dirigeant”)

“personal representative” means a person who stands in place of and represents another person and includes, as the circumstances require, a trustee, an executor, an administrator, a committee, a guardian, a tutor, a curator, an assignee, a receiver, an agent or an attorney of any person, but does not include a delegate; (“représentant personnel”)

“prescribed” means prescribed by the regulations; (“prescrit”)

“real estate” includes a leasehold interest in real property; (“bien immobilier”)

“regulations” means the regulations made under this Act; (“règlement”)

“regulatory capital” in respect of a credit union, has the meaning given to that expression by the regulations; (“capital réglementaire”)

“related person”, when used to indicate a relationship with any person, means,

(a) a spouse or same-sex partner of the person,

(b) any son or daughter of the person, or

(c) any relative of the person or of any person mentioned in clause (a) or (b); (“personne liée”)

“relative” means a relative by blood, marriage or adoption; (“parent”)

“same-sex partner” means a same-sex partner as defined under Part III of the Family Law Act; (“partenaire de même sexe”)

“security” means a security as defined under the Securities Act but does not include a deposit with a financial institution or any instrument evidencing the deposit; (“valeur mobilière”)

“share” includes a membership share unless specifically excluded by this Act; (“action”)

“shareholder” means a shareholder as defined in subsection 8 (1); (“actionnaire”)

“special resolution” means a resolution passed by two-thirds or more of the votes cast by or on behalf of the persons who voted in respect of that resolution; (“résolution extraordinaire”)

“spouse” means a spouse as defined under Part III of the Family Law Act; (“conjoint”)

“stabilization authority” means the Corporation and any league or association of credit unions designated by the Corporation as a stabilization authority; (“organe de stabilisation”)

“subordinated indebtedness” means an instrument evidencing an indebtedness of a credit union that, by its terms, provides that the indebtedness will, in the event of the insolvency or winding up of the credit union, be subordinate in right of payment to all deposit liabilities of the credit union and all other liabilities of the credit union except those that, by their terms, rank equally with or are subordinate to the indebtedness; (“titre secondaire”)

“Superintendent” means the Superintendent of Financial Services appointed under the Financial Services Commission of Ontario Act, 1997; (“surintendant”)

“Tribunal” means the Financial Services Tribunal established under the Financial Services Commission of Ontario Act, 1997. (“Tribunal”) 1994, c. 11, s. 1; 1997, c. 28, s. 52; 1999, c. 6, s. 19 (1, 2); 2002, c. 18, Sched. H, s. 3 (1).

Joint shareholders

2.(1)For the purposes of this Act, two or more persons holding the same share or shares jointly are considered as one member or shareholder.

Exception

(2)Despite subsection (1), two or more persons jointly holding enough membership shares to entitle each of them to be a member in his or her own right are all considered as separate members. 1994, c. 11, s. 2.

Subsidiary

3.For the purposes of this Act, a body corporate is a subsidiary of another body corporate if,

(a) it is controlled by,

(i) that other,

(ii) that other and one or more bodies corporate each of which is controlled by that other, or

(iii) two or more bodies corporate that are that other’s subsidiary; or

(b) it is a subsidiary of a body corporate that is that other’s subsidiary. 1994, c. 11, s. 3.

Holding body corporate

4.For the purposes of this Act, a body corporate is another’s holding body corporate if that other is its subsidiary. 1994, c. 11, s. 4.

Affiliation

5.(1)For the purposes of this Act, one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person. 1994, c. 11, s. 5 (1).

Affiliate by order

(2)On application in writing by a credit union, the Superintendent may, by order and on the terms specified in the order, deem a corporate body named in the order to be an affiliate for the purposes of this Act or for the purpose of specific provisions of this Act. 1994, c. 11, s. 5 (2); 1997, c. 28, s. 53.

Revocation of order

(3)The Superintendent may revoke the order if he or she believes that the credit union has failed to comply with a term set out in the order or that it is no longer appropriate to deem the corporate body in respect of which the order is made to be an affiliate. 1994, c. 11, s. 5 (3); 1997, c. 28, s. 53.

Controlling body corporate

6.For the purposes of this Act, a body corporate is controlled by another person or by two or more bodies corporate if,

(a) voting securities of the first mentioned body corporate carrying more than 50 per cent of the votes for the election of directors are held, other than by way of security only, by or for the benefit of the other person or by or for the benefit of the other bodies corporate; and

(b) the votes carried by the securities are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned body corporate. 1994, c. 11, s. 6.

Member

7.(1)For the purposes of this Act, a person is a holder of a membership share of a credit union when, according to the membership register of the credit union, the person is the owner of the membership share or is entitled to be entered in the members register of the credit union as the owner of the share.

Holder of membership share

(2)A reference in this Act to the holding of a membership share by or in the name of a person is a reference to the fact that the person is registered or is entitled to be registered in the members register or a similar record of members of the credit union as the holder of the share. 1994, c. 11, s. 7.

Shareholder

8.(1)For the purposes of this Act, a person is a shareholder of a body corporate when, according to the securities register of the body corporate, the person is the owner of a share of the body corporate or is entitled to be entered in the securities register or like record of the body corporate as the owner of a share.

Holder of a share

(2)A reference in this Act to the holding of a share by or in the name of any person is a reference to the fact that the person is registered or is entitled to be registered in the securities register or a similar register of the body corporate as the holder of that share. 1994, c. 11, s. 8.

PART II
ADMINISTRATION

Application of Corporations Act

9.(1)Repealed: 1997, c. 28, s. 54.

Application of Corporations Act

(2)The Corporations Act does not apply to credit unions or leagues. 1994, c. 11, s. 9 (2).

Delegation of powers by Minister

10.The Minister may delegate in writing any of his or her powers under this Act to any employee in the Ministry of Finance or agent of the Ministry. 1994, c. 11, s. 10.

11.Repealed: 1997, c. 28, s. 55.

PART III
ESTABLISHING A CREDIT UNION

Incorporation

Corporate charter

12.(1)The certificate of incorporation, articles of incorporation and the by-laws of a credit union, together with this Act, constitute the charter of the credit union.

Date of incorporation

(2)A credit union comes into existence on the date set out in the certificate of incorporation. 1994, c. 11, s. 12.

Articles of incorporation

13.(1)Twenty or more individuals may incorporate a credit union by signing articles of incorporation and complying with section 15.

Restriction

(2)An individual is disqualified from being an incorporator if he or she,

(a) is less than eighteen years of age;

(b) is of unsound mind and has been so found by a court in Canada or elsewhere; or

(c) has the status of a bankrupt. 1994, c. 11, s. 13.

Contents of articles

14.(1)The articles of incorporation must set out the prescribed information in a form approved by the Superintendent. 1994, c. 11, s. 14 (1); 1997, c. 28, s. 53.

Same

(2)The articles may include any provision that is permitted under this Act to be set out in the articles or that could be the subject of a by-law of the credit union.

Same

(3)The articles must set out any restrictions on the business that the credit union may carry on or on the powers that the credit union may exercise.

First directors

(4)The articles must name at least five individuals who hold office as first directors of the credit union.

Affidavit

(5)An affidavit verifying the following matters must accompany the articles:

1. The signature of each incorporator and each first director.

2. The fact that each incorporator and first director meet the criteria for eligibility under subsection 13 (2) and section 91, as applicable, and that each first director is not disqualified to be a director under section 92.

Where consent required

(6)If a person who is not an incorporator is named in the articles as a first director, his or her consent to act as a first director must accompany the articles. 1994, c. 11, s. 14 (2-6).

Form of consent

(7)The consent must be in a form approved by the Superintendent. 1994, c. 11, s. 14 (7); 1997, c. 28, s. 53.

Application for incorporation

15.(1)An application to incorporate a credit union may be made by sending to the Minister two copies of the proposed articles of incorporation and the proposed by-laws of the credit union and paying the applicable application fee. 1994, c. 11, s. 15 (1).

Powers and duties of Superintendent

(2)The Minister shall direct the Superintendent to inquire into the circumstances, sufficiency and regularity of the articles and by-laws and the Superintendent may do the following before the Minister issues a certificate of incorporation:

1. Require the incorporators to provide such additional information as the Superintendent considers relevant to the application.

2. Require any matter set out in the articles or by-laws or in the additional information provided to the Superintendent to be verified under oath.

3. Require the articles or by-laws to be amended if the Superintendent considers that they are inconsistent with this Act or the regulations. 1994, c. 11, s. 15 (2); 1997, c. 28, s. 53.

Certificate of incorporation

16.(1)Subject to subsection (2), the Minister shall issue a certificate of incorporation to the incorporators.

Grounds for refusing certificate

(2)The Minister shall not issue a certificate of incorporation if the articles do not meet the requirements of section 14 or 15 or if the incorporators do not satisfy the Minister of the following matters:

1. The plans for the conduct and development of the business of the credit union are feasible and sound.

2. The credit union will be operated in accordance with co-operative principles.

3. The credit union will be operated in such a way that deposits will be safeguarded without the likelihood of a claim against the deposit insurer.

4. The credit union will be operated responsibly by individuals who, by virtue of their character, competence and experience, are suited to operating a financial institution.

5. The incorporation of the credit union will serve the best interests of the co-operative financial system in Ontario. 1994, c. 11, s. 16.

Effect of certificate

17.(1)A certificate of incorporation is conclusive proof that the incorporators have complied with all conditions precedent to incorporating a credit union and that the credit union was incorporated under this Act on the date set out in the certificate.

Exception

(2)Subsection (1) does not apply in a proceeding under section 301. 1994, c. 11, s. 17.

Appeal re refusal of certificate

18.If the Minister decides, after giving the applicants for incorporation an opportunity to be heard, not to issue a certificate of incorporation, he or she shall notify the incorporators, in writing, and set out the reasons for the decision. 1994, c. 11, s. 18.

Language and form of name

19.(1)The name of a credit union must be in the language and form authorized in the articles and approved by the Superintendent. 1994, c. 11, s. 19 (1); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (1).

Use of “credit union”

(2)Subject to subsections (3) and (5), the name of a credit union must include the words “credit union” or “caisse populaire”.

Use of “caisse populaire”

(3)Only a corporation incorporated under this Act or a predecessor of this Act that provides financial services to its members and promotes the interests of the French-speaking community in Ontario by providing management and democratic control in French may include “caisse populaire” in its name and all other corporations incorporated under this Act or a predecessor of this Act shall include “credit union” in their names.

Use of “Limited”, etc.

(4)The name of a credit union must have at the end of it one of the following: “Limited”, “Ltd”, “Limitée”, “Ltée”, “incorporated”, “incorporée” or “Inc”.

Exception

(5)Subject to subsection (3), a credit union incorporated under a predecessor of this Act may continue to use the name under which it was incorporated. 1994, c. 11, s. 19 (2-5).

May use other name

19.1(1)Subject to subsections (2) and (3), a credit union may carry on business under or identify itself by a name other than its corporate name.

Superintendent may order credit union to not use other name

(2)Where a credit union is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, after giving the credit union an opportunity to be heard, by order, direct the credit union not to use that other name if the Superintendent is of the opinion that the other name is a name referred to in any of clauses 21 (1) (a) to (g).

Corporate name to be used in all documents

(3)A credit union shall set out its corporate name in legible characters in all documents that evidence rights or obligations with respect to other parties (including contracts, invoices and negotiable instruments) and that are issued or made by or on behalf of the credit union. 1999, c. 12, Sched. I, s. 2 (2).

Prohibition re names

20.(1)A person who carries on business using a name in which “credit union” or “caisse populaire” is used other than in the circumstances set out in section 19 or 19.1 is guilty of an offence. 1999, c. 12, Sched. I, s. 2 (3).

Exception

(2)Subsection (1) does not apply to the prescribed persons or entities. 1994, c. 11, s. 20 (2).

Restrictions re names

21.(1)A credit union may not be incorporated under this Act with a name that,

(a) is prohibited under an Act of the Parliament of Canada or a province or territory of Canada;

(b) does not meet the prescribed requirements;

(c) is reserved under section 22 for another credit union;

(d) is the same as or confusingly similar to any existing trade-mark or trade name or corporate name of a body corporate;

(e) is the same as or confusingly similar to the known name under or by which another entity carries on business or is identified;

(f) contains a word or phrase that indicates or suggests that it is incorporated for any object other than one set out in its articles; or

(g) is deceptively misdescriptive. 1994, c. 11, s. 21 (1).

Exception re trade-marks, etc.

(2)Clause (1) (d) does not apply if the Superintendent is satisfied that,

(a) the trade-mark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name; and

(b) in the case of a corporate name, there is consent to the use of the corporate name. 1994, c. 11, s. 21 (2); 1997, c. 28, s. 53.

Exception for affiliates

(3)Clauses (1) (d) and (e) do not apply with respect to a credit union that is affiliated with another entity if the Superintendent is satisfied that the entity consents to it having a name substantially similar to the entity’s name. 1994, c. 11, s. 21 (3); 1997, c. 28, s. 53.

Change of name

(4)If a credit union has acquired a name contrary to subsection (1), the Superintendent may issue a certificate of amendment to the articles changing the name of the credit union. 1994, c. 11, s. 21 (4); 1997, c. 28, s. 53.

Same

(5)Before issuing a certificate of amendment, the Superintendent shall give the credit union an opportunity to be heard. 1994, c. 11, s. 21 (5); 1997, c. 28, s. 53.

Reserving a name

22.(1)A person may reserve a corporate name for a period of ninety days or less upon making an application to the Superintendent in a form approved by the Superintendent and paying the fee established by the Minister. 1994, c. 11, s. 22 (1); 1997, c. 19, s. 5 (1); 1997, c. 28, s. 53.

Effect of reservation

(2)During the period that the name is reserved, a body corporate is not entitled to acquire the name or a similar name without the prior written consent of the person for whose use and benefit the name is reserved. 1994, c. 11, s. 22 (2).

Location of head office

23.(1)A credit union shall have its head office in Ontario at the place indicated in its articles.

Change

(2)A credit union may by articles of amendment change the location of its head office to another place in Ontario. 1994, c. 11, s. 23.

Objects and Powers

Objects

24.(1)The object of a credit union is to provide on a co-operative basis financial services primarily for its members.

Co-operative basis

(2)A credit union shall operate on a co-operative basis such that,

(a) membership is voluntary and is open to those that fall within its bond of association;

(b) its business is carried on primarily for the benefit of its members;

(c) the net income that accrues from its business is,

(i) used to provide services for its members,

(ii) used to develop its business,

(iii) used to increase its reserves or retained earnings,

(iv) distributed to its members and shareholders, or

(v) used for another purpose approved by the members; and

(d) each member has only one vote at its general meetings or in respect of elections of its directors and officers.

Exception

(3)Clause (2) (d) does not apply with respect to section 35. 1994, c. 11, s. 24.

Powers

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

Powers outside Ontario

(2)A credit union may exercise its powers outside of Ontario to the extent permitted under the laws of the applicable jurisdiction.

Extra-provincial powers

(3)A credit union may accept extra-provincial powers and rights. 1994, c. 11, s. 25.

Acting outside powers

26.(1)No act of a credit union and no transfer of real or personal property to or by a credit union before or after this section comes into force, that is otherwise lawful, is invalid because the credit union was without capacity or power to do the act or make or receive the transfer, but a lack of capacity or power may be asserted,

(a) in a proceeding against the credit union by a member under subsection (2);

(b) in a proceeding by the credit union, whether acting directly or through a receiver, liquidator, trustee or their legal representative or through members in a representative capacity, against a director or officer or former director or officer of the credit union; or

(c) as a cause for the cancellation of the certificate of incorporation of the credit union.

Restraining order

(2)A member of a credit union may apply to court for an order restraining the credit union from doing any act on the ground that the credit union lacks capacity to do so.

Granting order

(3)Subject to subsection (4), the court may, if it considers it to be just and equitable, grant the order.

Where contract

(4)If the act or transfer that the member seeks to restrain is to be done under a contract to which the credit union is a party,

(a) all the parties to the contract are parties to the proceedings;

(b) the court may,

(i) grant the order and set aside the contract, and

(ii) award compensation to the credit union or other parties to the contract for any damages or loss, other than anticipated profits from the contract, sustained by them because the order is granted and the contract is set aside. 1994, c. 11, s. 26.

Miscellaneous

Indoor management rule

27.(1)A credit union or a guarantor of an obligation of one shall not assert against a person dealing with the credit union or with a person who has acquired rights from the credit union any of the following matters:

1. The articles or by-laws have not been complied with.

2. The individuals named in the most recent notice filed under the Corporations Information Act or named in the articles, whichever is more current, are not the directors of the credit union.

3. The location of its head office indicated in a notice filed under the Corporations Information Act, as named in the by-laws, or named in the articles, whichever is more current, is not the head office of the credit union.

4. A person held out by the credit union as a director, officer or agent has not been duly appointed or does not have authority to exercise the powers and perform the duties that are customary in the business of the credit union or usual for the director, officer or agent.

5. 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 not genuine.

6. Financial assistance was not authorized.

7. The sale, lease, exchange or disposition of property of the credit union was not authorized under section 204.

Exception

(2)Subsection (1) does not apply if the person has or ought to have knowledge of the matter by virtue of his, her or its position with or relationship to the credit union. 1994, c. 11, s. 27 (1, 2).

No deemed notice

(3)No person is affected by or is deemed to have 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. 1994, c. 11, s. 27 (3); 1997, c. 28, s. 53.

PART IV
MEMBERSHIP

Who May Be Member

Membership

28.(1)Subject to the provisions of this Act and its articles, membership in a credit union is governed by its by-laws.

Same

(2)The by-laws shall prescribe the number of membership shares that a person or entity must subscribe for to become a member.

Holding membership shares

(3)Members must hold the number of membership shares prescribed by the by-laws. 1994, c. 11, s. 28.

Becoming a member

29.(1)Each incorporator of a credit union who has subscribed for a membership share in the credit union becomes a member upon the effective date of incorporation.

Subscription deemed application

(2)A subscription for the number of membership shares in a credit union required by the by-laws of the credit union constitutes an application for membership and the issue of a membership share to the applicant constitutes admission to membership.

Applicants for membership

(3)Subject to subsection (1), no person shall become a member of a credit union until the person’s application for membership has been approved by the board or an employee authorized by the board and the applicant has complied fully with the by-laws governing admission of members. 1994, c. 11, s. 29.

Membership limitation

30. (1) Subject to subsection (2), the by-laws of every credit union shall provide that the membership of the credit union is limited to persons, related persons or entities who come within a bond of association. 1994, c. 11, s. 30 (1).

Interpretation

(2) A bond of association exists among persons or entities who,

(a) have a common bond of occupation or association;

(b) reside or work within a municipality, neighbourhood or other reasonably well-defined community; or

(c) either have,

(i) a common bond of occupation or association, or

(ii) reside or work within a municipality, neighbourhood or other reasonably well-defined community. 1994, c. 11, s. 30 (2).

Same

(3) Despite subsection (1), the by-laws may provide that an employee of a credit union may become a member. 1994, c. 11, s. 30 (3).

Same

(4) The Superintendent, if satisfied that the credit union is meeting prudential lending and investing standards and the capital adequacy and liquidity requirements set out in this Act and the regulations and is being operated in a satisfactory manner, may approve an amendment to the by-laws changing the bond of association subject to such conditions as the Superintendent sees fit. 1994, c. 11, s. 30 (4); 1997, c. 28, s. 53.

Same

(5) The credit union shall, at the request of the Superintendent, provide to the Superintendent such information that he or she believes will help in making a determination under subsection (4). 1994, c. 11, s. 30 (5); 1997, c. 28, s. 53.

Approval needed

(6) Before an application is made under this section, the proposed amendment must be approved by the board and ratified by a special resolution passed at a meeting of members called for that purpose. 2002, c. 18, Sched. H, s. 3 (2).

Same

(7) By-laws to which this section applies are subject to the approval of the Superintendent. 1994, c. 11, s. 30 (7); 1997, c. 28, s. 53.

Admissions outside bond of association

31.(1)If the credit union’s by-laws permit it to do so, the board may admit, as a member of the credit union, any person or entity who does not come within the bond of association in the following circumstances:

1. The number of members who do not come within the bond of association does not exceed 3 per cent of the number of members in the credit union.

2. The admission of specific members who do not come within the bond of association is approved by the board.

3. Members who do not come within the bond of association must be identified as such in the membership register.

Same

(2)A person or entity admitted as a member who does not come within the bond of association has all the rights and obligations of membership. 1994, c. 11, s. 31.

Retaining membership

32.(1)If authorized by the by-laws, a member who no longer falls within the bond of association may retain membership in the credit union.

Exception

(2)Section 31 does not apply to members who retain their membership under subsection (1). 1994, c. 11, s. 32.

Register of members

33.(1)Every person or entity whose name is registered in the register of members is entitled to,

(a) a record specifying the amount paid upon membership shares, deposits and loans by the person or entity; and

(b) such other information as may be prescribed by the by-laws of the credit union.

Same

(2)The record referred to in clause (1) (a) is admissible in evidence as proof, in the absence of evidence to the contrary, of membership and of the information entered therein. 1994, c. 11, s. 33.

Corporate and partnership members

34.Her Majesty the Queen in right of Ontario or in right of Canada or a corporation including a municipality as defined in the Municipal Affairs Act, an unincorporated association or a partnership registered under the Business Names Act or a predecessor thereof may become a member of a credit union on such conditions as are prescribed. 1994, c. 11, s. 34.

Voting

One vote

35.(1)A member of a credit union has only one vote at a membership meeting.

Proxies permitted

(2)No member of a credit union shall vote by proxy except when the member is Her Majesty the Queen in right of Ontario or in right of Canada, a corporation including a municipality defined in the Municipal Affairs Act, an unincorporated association, or a partnership registered under the Business Names Act or a predecessor thereof.

Limit on proxies

(3)No person may cast more than one vote by proxy on any one matter at a membership meeting. 1994, c. 11, s. 35.

Mail balloting

36.(1)The by-laws of a credit union may allow members to vote in an election of directors or on any matter requiring approval of the members in person by mail ballot, ballot in each branch or electronic means.

Same

(2)The by-laws may set out the conditions that apply to a ballot cast by mail or electronic means.

Regulations

(3)The Lieutenant Governor in Council may make regulations governing mail balloting, balloting in each branch and balloting by electronic means. 1994, c. 11, s. 36.

Rights and Liabilities

Liability of members

37.The members of a credit union are not, by reason only of holding membership shares of a credit union, liable for any liability, act or default of the credit union except as otherwise provided by this Act. 1994, c. 11, s. 37.

Not bound by trust

38.A credit union is not bound to see to the execution of any trust, whether express, implied or constructive, to which any membership share or deposit is subject. 1994, c. 11, s. 38.

Membership shares in trust

39.(1)A member, in addition to holding membership shares in the member’s own name, may subscribe for and hold membership shares and may make deposits in trust for a named beneficiary.

Same

(2)The beneficiary shall be deemed to be a member of the credit union.

Same

(3)The beneficiary is not entitled to notice of meetings or to vote at meetings. 1994, c. 11, s. 39.

Joint accounts

40.Two or more members may hold their membership shares and deposits in a joint account and, in the absence of written notice to the contrary, payment by the credit union to any of the members or to the survivor or any of the survivors of the members of any money standing to the credit of the joint share or deposit account discharges the credit union from any further liability for such payment. 1994, c. 11, s. 40.

Members under age of 18 years

41.(1)A person under the age of eighteen years may be a member of a credit union.

Rights

(2)A member under the age of eighteen years may,

(a) enjoy all the rights of a member;

(b) execute all instruments necessary to be executed; and

(c) give all acquittances necessary to be given.

Limits

(3)A member under the age of eighteen years is not entitled to vote unless permitted to do so by the by-laws.

Right to borrow

(4)Subject to the by-laws, a member under the age of eighteen years does not have the right to borrow any amount in excess of his or her deposits in the credit union unless,

(a) a joint and several obligation is signed by the member and by a person eighteen years of age or over; or

(b) the loan is guaranteed by the Government of Canada or a provincial or municipal government.

Deposits

(5)A member under the age of eighteen years may deposit money with a credit union in his or her own name, and the money so deposited may be repaid to or to the order of the member, and he or she may give a valid discharge therefor, despite his or her minority. 1994, c. 11, s. 41.

Death, etc.

Transmission of shares

42.(1)Subject to section 43 and, where the death occurred on or before the 10th day of April, 1979, subject to The Succession Duty Act, being chapter 449 of the Revised Statutes of Ontario, 1970, if a transmission of a share in a credit union takes place by virtue of any testamentary act or instrument, or in consequence of an intestacy, if the probate of the will or letters of administration or document testamentary, or other judicial or official instrument under which the title, whether beneficial or as trustee, or the administration or control of the personal estate of the deceased is claimed to vest, purports to be granted by any court or authority in any country, the probate of will or letters of administration or document testamentary or other judicial or official instrument or an authenticated copy thereof, or an official extract therefrom, may, together with a declaration in writing showing the nature of the transmission and signed and executed by the person claiming by virtue thereof, be produced and deposited with the secretary or officer named by the board of the credit union for the purpose of receiving it.

Proof

(2)The production and deposit specified in subsection (1) is sufficient authority to the credit union to pay the amount or value of any obligation on shares, in pursuance of and in conformity with the letters probate, letters of administration or other instrument. 1994, c. 11, s. 42.

Payment of money re deceased member

43.(1)If a member of a credit union dies, the credit union may pay,

(a) an amount not exceeding a prescribed amount out of the amount on deposit in the name of the deceased or for the membership shares of the deceased; and

(b) an amount not exceeding a prescribed amount out of any money that is received by the credit union under any policy of insurance on the life of the deceased,

to any person who the credit union is satisfied, by statutory declaration attested to not sooner than thirty days after the death, is entitled.

Effect of payment

(2)A payment made under subsection (1) discharges any obligation of the credit union or its board in respect of the money paid but does not affect the right of any other person claiming to be entitled to recover the money from the person to whom it was paid.

Deposits or membership shares in trust

(3)If a member of a credit union dies holding membership shares or money on deposit in his or her name in trust for a named beneficiary, the credit union may pay the amount of the membership shares or deposit and any interest or dividends thereon to the executor or administrator of the estate of the deceased member, subject to the trust or, if there is no executor or administrator, to the beneficiary or, if the beneficiary is a minor, to his or her parent or guardian. 1994, c. 11, s. 43.

Liens and Credits

Lien for liability

44.A credit union has a lien on the deposits and membership shares of a member for any liability to it by the member, and may set off any sum standing to the credit of the member on the books of the credit union towards the payment of the liability. 1994, c. 11, s. 44.

Note: Section 45 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Unclaimed credits

45.(1)Within thirty days after money held by a credit union to the credit of a depositor becomes an unclaimed credit, the credit union shall pay to the Minister the amount owing to the depositor, including interest, if any, in accordance with the agreement between the credit union and the depositor.

Same

(2)Money held by a credit union to the credit of a depositor becomes an unclaimed credit on the day seven years after the day on which the fixed term ended, in the case of a deposit for a fixed term, and, in any other case, on the day seven years after the day on which the last transaction by the depositor took place on the depositor’s account or a statement of account was last requested or acknowledged by the depositor, whichever is latest.

Obligation discharged

(3)Payment to the Minister discharges the credit union from all liability in respect of the money held.

Payment by Minister

(4)The Minister shall pay the amount received under subsection (1) to a person claiming to be entitled to it upon being furnished with satisfactory evidence of the person’s entitlement.

Repeal

(5)If the Unclaimed Intangible Property Act is in force on the day this section comes into force, this section is repealed on that day; otherwise this section is repealed on the day the Unclaimed Intangible Property Act comes into force. 1994, c. 11, s. 45.

See: 1994, c. 11, s. 396 (1).

Withdrawals and Expulsions

Withdrawal of members

46.(1)A member of a credit union may withdraw from the credit union at any time by giving notice in accordance with the by-laws.

Same

(2)A deceased member shall be deemed to have given notice to the credit union of intention to withdraw on the day of his or her death. 1994, c. 11, s. 46.

Expulsion of members

47.(1)A member may be expelled, by a resolution passed by a majority of the board at a meeting duly called for that purpose not later than ninety days before the date set for the annual or general meeting of the credit union, from membership in a credit union for,

(a) misconduct in the affairs of the credit union;

(b) failure to abide by the conditions of membership set out in the by-laws; or

(c) failure to pay an indebtedness in accordance with the conditions of repayment.

Notice of misconduct

(2)A resolution under subsection (1) is not valid unless,

(a) prior written notice, setting out the grounds upon which the member is to be expelled, is given to the member at least ten days before the meeting of the board called to consider the resolution expelling that member; and

(b) an opportunity is given to the member to appear either personally or by counsel or agent to make submissions at the meeting of the board called to consider the resolution expelling the member.

Notice of decision

(3)The secretary of the credit union shall, within five days after the meeting of the board, notify the member of the decision of the board by registered letter addressed to the member at the member’s last known address. 1994, c. 11, s. 47.

Payment to withdrawing and expelled member

48.(1)Subject to section 62, all amounts paid to the credit union on membership shares and deposits by a withdrawing or expelled member shall, after deducting all amounts due from the member to the credit union, be paid to the member within ninety days after the member gives notice of intention to withdraw or is expelled. 1994, c. 11, s. 48 (1).

Same

(2)If a credit union does not pay money to a withdrawing or expelled member within ninety days after the notice of the member’s intention to withdraw or the decision to expel the member, the credit union shall notify the Superintendent and the deposit insurer of the intended withdrawal or expulsion and advise them of the reasons for not paying. 1994, c. 11, s. 48 (2); 1997, c. 28, s. 53.

Same

(3)Despite subsection (1), a credit union may pay a withdrawing or expelled member in accordance with the conditions of payment under a contract with the member.

Same

(4)A withdrawing or expelled member is entitled to receive any dividend, interest or rebate of loan interest paid or payable to other members of the credit union as at the date of the member’s withdrawal or expulsion on the same conditions that the board of directors have made applicable to all members of the credit union.

Notice of withdrawal

(5)Subject to subsection (1), a member who has given notice of withdrawal, or is expelled from a credit union, has no further rights as a member in the credit union, but the member is not, by the withdrawal or expulsion, released from any remaining obligation to the credit union. 1994, c. 11, s. 48 (3-5).

Extension of time

(6)If, in the opinion of the board, the payments in accordance with subsections (1), (3) and (4) would not be in the best interests of the credit union, the board may, by resolution, suspend the payments for a time longer than ninety days, if approved by the Superintendent, and on such conditions as the Superintendent may approve. 1994, c. 11, s. 48 (6); 1997, c. 28, s. 53.

Appeal from expulsion

49. (1) If a resolution to expel a member is passed, the member may appeal the decision of the board at the next annual or general meeting of members and the members may, by majority of the votes cast at the meeting, confirm, vary or set aside the resolution. 1994, c. 11, s. 49 (1).

Notice

(2) A member who wants to appeal a resolution to expel must give notice of the intention to appeal to the board within twenty-one days after receiving the notice of expulsion. 1994, c. 11, s. 49 (2).

Notice of representations

(3) If written representations from a member to be expelled are received at least seven days before the mailing of the notice of the annual or general meeting, the board shall, at the expense of the credit union, include with the notice of the meeting, a notice that those representations are available for inspection by members at the head office and at the branches of the credit union. 2002, c. 18, Sched. H, s. 3 (3).

Made available

(4) The board shall make the representations available to members at the head office and the branches of the credit union. 1994, c. 11, s. 49 (4).

Limit on length

(5) The representations must be no longer than 2,000 words in length. 1994, c. 11, s. 49 (5).

Representative action

50.(1)Subject to subsection (2), a member of a credit union may maintain an action in a court of competent jurisdiction in a representative capacity for the member and all other members of the credit union suing for and on behalf of the credit union to enforce any right, duty or obligation owed to the credit union under this Act or under any other statute or rule of law or equity that could be enforced by the credit union itself, or to obtain damages for any breach of any such right, duty or obligation.

Court order required

(2)An action under subsection (1) shall not be started until the member has obtained an order of the court permitting the start of the action.

Application to court

(3)A member may, upon at least seven days notice to the credit union, apply to the court for an order referred to in subsection (2).

Court order

(4)The court may make the order upon such conditions as the court thinks fit if the court is satisfied that,

(a) the member was a member of the credit union at the time of the transaction or other event giving rise to the cause of action;

(b) the member has made reasonable efforts to cause the credit union to start or prosecute diligently the action on its own behalf; and

(c) the member is acting in good faith and it is apparently in the interests of the credit union or its members that the action be started.

Costs

(5)At any time while an action started under this section is pending, the plaintiff may apply to the court for an order for the payment to the plaintiff by the credit union of reasonable interim costs, including solicitor’s and counsel fees and disbursements.

Accountability for costs

(6)The plaintiff is accountable to the credit union for the interim costs if the action is dismissed on final disposition at the trial or on appeal.

Action, court approval

(7)An action started under this section shall not be discontinued, settled or dismissed for want of prosecution without the approval of the court.

Same

(8)If the court determines that the interests of the members or any class of members may be substantially affected by a discontinuance, settlement or dismissal, the court, may direct that notice in manner, form and content satisfactory to the court shall be given, at the expense of the credit union or any other party to the action as the court directs, to the members or class of members whose interests the court determines may be affected. 1994, c. 11, s. 50.

PART V
CAPITAL STRUCTURE

Shares

Classes of shares

51.(1)The articles of a credit union must provide for a class of shares known as membership shares and may provide for additional classes of shares.

Transition

(2)The articles of every credit union in existence on the day before this subsection comes into force shall be deemed to provide for a class of shares known as membership shares.

Transition, class of share

(3)A share, issued by a credit union before this subsection comes into force, that a member holds as a condition of membership in a credit union shall be deemed to be a membership share and any other share issued before this subsection comes into force shall, subject to subsection (10), be deemed to be a deposit subject to the conditions established by the board if it has not been converted by the board into another class of shares other than membership shares.

Same

(4)If the board converts the shares described in subsection (3), the credit union must file articles of amendment.

Same

(5)The articles of amendment under subsection (4) may be authorized by a resolution of the directors.

Nature of shares

(6)The shares of a credit union are personal property.

Form

(7)Shares are without nominal or par value and, unless they are membership shares, they must be in registered form.

Transition, par value shares

(8)Shares with a nominal or par value issued by a credit union before this subsection comes into force shall be deemed to be shares without nominal or par value.

Same, rights re par value

(9)If a right of a member in a share issued before this subsection comes into force was expressed in terms of the nominal or par value of the share, the right shall be deemed to be the same right expressed without reference to the nominal or par value.

Application

(10)A share other than a share held as a condition of membership in a credit union shall not be deemed to be a deposit until one year after subsection (3) comes into force.

Insurability

(11)A share held as a condition of membership in a credit union that the board has not converted to another class of share is not insured until it is deemed to be a deposit.

Not insurable

(12)Shares are not insurable by the Corporation. 1994, c. 11, s. 51.

Membership shares

52.(1)Membership shares confer on their holder equal rights including equal rights to receive dividends declared on the shares and to receive the remaining property of the credit union on dissolution.

Redemption

(2)Subject to this Act, the conditions under which membership shares may be redeemed, including the manner and time of payment for redeemed shares, shall be as set out in the articles of the credit union.

Same

(3)Subject to this Act and the articles, the credit union shall redeem membership shares when a member withdraws or is expelled.

Transfer prohibited

(4)A member may not transfer an interest in a membership share to a person other than the credit union and any transaction that purports to make such a transfer is void.

Certificates not mandatory

(5)The by-laws of a credit union may provide that membership share certificates need not be issued but, if this is the case, the credit union shall give each member who requests one a statement of the number of membership shares held by the member.

Certificates

(6)Membership share certificates issued after this subsection comes into force must include such information as may be prescribed. 1994, c. 11, s. 52.

Other shares

53.(1)If the articles provide for classes of shares other than membership shares, the articles must set out,

(a) the rights, privileges, restrictions and conditions attaching to the shares of each such class; and

(b) the maximum number, if any, of shares of any such class that the credit union is authorized to issue.

Restrictions

(2)Shares, other than membership shares, do not confer on their holder the right to vote at meetings of the credit union except as permitted under this Act or the right to receive any of the remaining property of the credit union on dissolution. 1994, c. 11, s. 53.

Shares in series

54.(1)The articles of a credit union may authorize the issue of any class of shares, other than membership shares, in one or more series and may fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series.

Same

(2)The articles may authorize the board to fix the maximum number, if any, of shares in each series and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series, subject to the limitations set out in the articles.

Series participation

(3)If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital.

Voting rights

(4)If voting rights are attached to any series of a class of shares, the shares of every other series of that class have the same voting rights.

Restriction on series

(5)No rights, privileges, restrictions or conditions attached to a series of shares confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding. 1994, c. 11, s. 54 (1-5).

Information to Superintendent

(6)Before issuing shares in series, the board must file with the Superintendent articles of amendment in the form approved by the Superintendent designating the series and setting out the rights, privileges, restrictions and conditions of the shares. 1994, c. 11, s. 54 (6); 1997, c. 19, s. 5 (2); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (4).

Authorization

(7)Articles of amendment under subsection (6) may be authorized by a resolution of the directors. 1994, c. 11, s. 54 (7).

Proxies

55.(1)Part VIII of the Business Corporations Act applies, with necessary modifications, with respect to proxies for voting by shareholders in respect of shares other than membership shares as if the credit union were incorporated under that Act. 1994, c. 11, s. 55 (1).

Same

(2)For the purposes of subsection (1), any reference in Part VIII of the Business Corporations Act to “offering corporation” shall be deemed to be a reference to the “credit union” and, if the credit union is not an “offering corporation” as defined in section 1 of that Act, any reference in Part VIII of that Act to the “Commission” shall be deemed to be a reference to the “Superintendent”. 1994, c. 11, s. 55 (2); 1997, c. 28, s. 53.

Pre-emptive right

56.(1)If the articles so provide, a credit union shall not issue shares of a class, other than membership shares, unless the shares have first been offered to shareholders holding shares of that class.

Same

(2)Those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at the same price and on the same conditions as the shares are to be offered to others.

Exception

(3)A shareholder has no pre-emptive right in respect of shares that are to be issued,

(a) as a share dividend; or

(b) pursuant to the exercise of conversion privileges, options or rights previously granted by the credit union.

Same

(4)A shareholder has no pre-emptive right in respect of shares that are to be issued,

(a) if the issuance of shares to the shareholder is prohibited under this Act; or

(b) if, to the knowledge of the board, the offer of shares to a shareholder whose recorded address is outside Ontario ought not to be made unless the appropriate authority in that jurisdiction is provided with information in addition to that submitted to the shareholders at the most recent annual meeting. 1994, c. 11, s. 56.

Conversion privileges

57.(1)A credit union may issue conversion privileges, options or rights to acquire its securities, other than membership shares, and shall set out the applicable conditions,

(a) in the documents that evidence the conversion privileges, options or rights; or

(b) in the securities to which the conversion privileges, options or rights are attached.

Transferable rights

(2)Conversion privileges, options and rights to acquire securities of a credit union may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from the securities to which they are attached.

Reserved shares

(3)If a credit union has granted privileges to convert its securities into shares or into shares of another class or series, or has issued or granted options or rights to acquire shares, and if the articles limit the number of authorized shares, the credit union shall reserve and continue to reserve sufficient authorized shares to meet the exercise of the conversion privileges, options and rights. 1994, c. 11, s. 57.

Issuing Shares

Power to issue shares

58.(1)A credit union may issue shares at such times, to such persons and for such consideration as the board may determine.

Restrictions re shares

(2)A credit union may issue shares only in accordance with this Act and the articles and by-laws of the credit union. 1994, c. 11, s. 58.

Consideration

59.(1)A credit union shall not issue any share until the credit union has received full payment for it in cash or, with the approval of the Superintendent, in property. 1994, c. 11, s. 59 (1); 1997, c. 28, s. 53.

Prohibition re commission

(2)No person shall charge or accept payment of a commission on the purchase or sale of a membership share of a credit union.

Same

(3)No person described in clause 76 (a) or (b) shall charge or accept payment of a commission on the purchase or sale of a security of a credit union. 1994, c. 11, s. 59 (2, 3).

Shares non-assessable

60.Shares issued by a credit union are non-assessable and no person is liable to the credit union or to its creditors in respect of his or her shares. 1994, c. 11, s. 60.

Redemption and Cancellation of Shares

Holding own shares

61.(1)Except as permitted under this Act or prescribed by regulation, a credit union shall not,

(a) hold shares of the credit union;

(b) permit a subsidiary to hold a greater number of membership shares than the minimum number required for membership in the credit union; or

(c) permit a subsidiary to hold any other shares of the credit union.

Holding as personal representative

(2)A credit union may hold its shares in the capacity of a personal representative and may permit a subsidiary to do so, but only if neither the credit union nor any subsidiary has a beneficial interest in the shares. 1994, c. 11, s. 61 (1, 2).

Security interest

(3)A credit union may hold its shares by way of a security interest and may permit a subsidiary to do so if the security interest is nominal or immaterial when measured by criteria established by the credit union that have been approved in writing by the Superintendent. 1994, c. 11, s. 61 (3); 1997, c. 28, s. 53.

Transitional provision

(4)Nothing in this section precludes a credit union or any of its subsidiaries from holding a security interest held immediately before this Part comes into force.

Exception

(5)Section 28 of the Business Corporations Act does not apply to prevent a subsidiary of a credit union from holding membership shares in a credit union that is its holding body corporate. 1994, c. 11, s. 61 (4, 5).

Purchase and redemption of shares

62.(1)A credit union may purchase or redeem its shares only in accordance with this section and with its articles.

Same

(2)A credit union may purchase, for the purpose of cancellation, any of its shares or redeem any of its redeemable shares at a price not exceeding the redemption price of the share calculated according to a formula stated in its articles or, in the case of shares other than membership shares, according to the conditions attaching to the shares.

Restrictions

(3)A credit union shall not make any payment to purchase or redeem its shares if there are reasonable grounds for believing that the credit union is, or the payment would cause it to be, in contravention of section 84.

Donations

(4)A credit union may accept a share surrendered to it as a gift but may not extinguish or reduce a liability in respect of an amount unpaid on the share except in accordance with section 72. 1994, c. 11, s. 62.

Cancellation of shares

63.A credit union shall cancel its shares or fractions of its shares that it has purchased, redeemed or otherwise acquired. 1994, c. 11, s. 63.

Sale of shares

64.(1)Despite section 63, if a credit union acquires any of its shares through the realization of security, the credit union may sell or otherwise dispose of them within six months after the day of the realization.

Same

(2)If a subsidiary of a credit union acquires shares of the credit union through the realization of security, the credit union may cause the subsidiary to sell or otherwise dispose of them within six months after the day of the realization. 1994, c. 11, s. 64.

Dividends

Declaration of dividend

65.(1)The board may declare, subject to the by-laws, and the credit union may pay a dividend in money or property.

Same

(2)The board may declare and the credit union may pay a dividend by issuing fully paid shares or options or rights to acquire fully paid shares, except membership shares. 1994, c. 11, s. 65.

Declaration of patronage return

66.(1)The board may declare, subject to the by-laws, and the credit union may pay, a patronage return to its members in proportion to the business done by each member with or through the credit union.

Form of payment

(2)A patronage return may be paid in money or property or by issuing fully paid shares or options or rights to acquire fully paid shares, except membership shares, and may include rebates of interest paid by members in respect of loans during that fiscal year. 1994, c. 11, s. 66.

Restriction on dividends, etc.

67.The board shall not declare, and the credit union shall not pay, a dividend or patronage return if there are reasonable grounds for believing that the credit union is, or the payment would cause it to be, in contravention of section 84. 1994, c. 11, s. 67.

Stated Capital

Stated capital account

68.(1)A credit union shall maintain a separate stated capital account for each class and series of shares it issues.

Addition to account

(2)A credit union shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues.

Transition

(3)A credit union that exists when this subsection comes into force shall record in the stated capital account maintained for membership shares an amount equal to the aggregate amount paid up on the membership shares less any amount deemed converted to a deposit under subsection 51 (3).

Same

(4)An amount unpaid in respect of a membership share issued before this subsection comes into force and paid after it comes into force must be recorded in the stated capital account maintained for membership shares. 1994, c. 11, s. 68.

Adjustment due to conversion

69.(1)On a conversion of outstanding shares, other than membership shares, of a credit union into shares of another class or series, the credit union shall,

(a) deduct from the stated capital account maintained for the class or series of shares converted an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted, and dividing by the number of outstanding shares of that class or series immediately before the conversion; and

(b) record the result obtained under clause (a) and any additional consideration received on the conversion in the stated capital account maintained for the class or series of shares into which the shares have been converted.

Stated capital of convertible shares

(2)For the purposes of subsection (1) and subject to the articles, if a credit union issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion.

Conversion or change of shares

(3)Shares issued by a credit union and converted into shares of another class or series become issued shares of the class or series into which the shares have been converted.

Definition

(4)In this section,

“conversion” of a share includes a change made under subsection 311 (1) into another class or series. 1994, c. 11, s. 69.

Addition due to debt conversion

70.On conversion of a debt obligation of a credit union into shares, the credit union shall,

(a) deduct from the liabilities of the credit union the nominal value of the debt obligation; and

(b) record the result obtained under clause (a) and any additional consideration received for the conversion in the stated capital account maintained for the class or series of shares into which the debt obligation has been converted. 1994, c. 11, s. 70.

Reduction due to purchase, etc.

71.(1)On a purchase, redemption or other acquisition of shares or fractions of shares by a credit union, the credit union shall deduct from the stated capital account maintained for the applicable class or series of shares an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares purchased, redeemed or acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or acquisition.

Exception

(2)This section does not apply with respect to shares acquired as described in subsection 61 (2) or acquired through the realization of security and sold in accordance with subsection 64 (1). 1994, c. 11, s. 71.

Reduction by special resolution

72.(1)The stated capital of a credit union may be reduced by special resolution.

Contents of special resolution

(2)The special resolution must specify each stated capital account to be affected by the reduction. 1994, c. 11, s. 72 (1, 2).

Approval

(3)The special resolution has no effect until it is approved in writing by the Superintendent. 1994, c. 11, s. 72 (3); 1997, c. 28, s. 53.

Conditions for approval

(4)The Superintendent may not approve the special resolution unless an application for his or her approval is made within three months after the resolution is passed and a copy of the resolution, together with a notice of intention to apply for approval, has been published in The Ontario Gazette. 1994, c. 11, s. 72 (4); 1997, c. 28, s. 53.

Information

(5)An application for approval must include such information and documents as the Superintendent may require. 1994, c. 11, s. 72 (5); 1997, c. 28, s. 53.

Restriction

(6)A credit union shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the credit union is, or the reduction would cause it to be, in contravention of section 84.

Reducing capital account

(7)A credit union shall adjust its stated capital account or accounts in accordance with any special resolution referred to in subsection (1). 1994, c. 11, s. 72 (6, 7).

Recovery by action

73.(1)If money has been paid or property distributed as a consequence of a reduction of capital made contrary to section 72, a creditor of the credit union may apply to a court for an order compelling the member, shareholder or other person to pay the money or deliver the property to the credit union. 1994, c. 11, s. 73 (1).

Shares held by personal representative

(2)A person holding shares as a personal representative who is registered on the records of the credit union as a member or shareholder and described as the personal representative for a named person is not personally liable under subsection (1) but the named person is liable. 1994, c. 11, s. 73 (2).

(3)Repealed: 2002, c. 24, Sched. B, s. 25.

Remedy preserved

(4)This section does not affect any liability that arises under section 153. 1994, c. 11, s. 73 (4).

Transfer of Securities

Application of Business Corporations Act

74.Part VI of the Business Corporations Act applies, with necessary modifications, with respect to the transfer of securities, other than membership shares, as if the credit union were incorporated under that Act. 1994, c. 11, s. 74.

Offering Statement

Selling securities

75.(1)A credit union may sell its securities to a member or accept from a member, directly or indirectly, consideration for its securities if,

(a) the credit union has obtained a receipt under section 78 for an offering statement respecting the securities and the receipt has not been revoked or expired; or

(b) the credit union has provided the Superintendent with a copy of receipts from the Ontario Securities Commission under the Securities Act for a preliminary prospectus and a prospectus respecting the offering of the securities. 1994, c. 11, s. 75 (1); 1997, c. 28, s. 53.

When Securities Act does not apply

(2)The Securities Act does not apply to securities sold or disposed of by a credit union pursuant to a receipt, under section 78, for an offering statement.

Exception

(3)Subsection (1) and the Securities Act do not apply with respect to the issuance of,

(a) membership shares; or

(b) shares, other than membership shares, under section 65 or 66.

Interpretation

(4)When, in subsection (1), credit union is read to mean league, a member of a league includes a member of a credit union that is a member of the league. 1994, c. 11, s. 75 (2-4).

Permitted sellers

76.Securities sold under the circumstances described in clause 75 (1) (a) may be sold by,

(a) the directors, officers and employees of the issuing credit union;

(b) in the case of an issuing league, the directors, officers and employees of the league or of a credit union that is a member of the league; or

(c) a person registered under the Securities Act as a securities dealer, investment dealer or broker. 1994, c. 11, s. 76.

Offering statement

77.(1)Application for a receipt for an offering statement is made by filing with the Superintendent a copy of the offering statement and paying the applicable fee. 1994, c. 11, s. 77 (1); 1997, c. 28, s. 53.

Contents

(2)The offering statement must contain such information as may be prescribed and must be in a form approved by the Superintendent. 1994, c. 11, s. 77 (2); 1997, c. 28, s. 53.

Standard of disclosure

(3)The offering statement must provide full, true and plain disclosure of all material facts relating to the securities that the credit union proposes to issue. 1994, c. 11, s. 77 (3).

Certificate

(4)The offering statement must be accompanied by the disclosure certificate in a form approved by the Superintendent signed by the chief executive officer and the chief financial officer of the credit union and by the chair of the board. 1994, c. 11, s. 77 (4); 1997, c. 19, s. 5 (3); 1999, c. 12, Sched. I, s. 2 (4).

Additional material

(5)The Superintendent may require,

(a) the credit union to provide additional documents, reports and other material; and

(b) that the information contained in the material referred to in clause (a) form part of the offering statement. 1994, c. 11, s. 77 (5); 1997, c. 28, s. 53.

Examination

(6)Before issuing a receipt, the Superintendent may require the credit union to permit an examination of its affairs, at its own expense, by a person authorized in writing by the Superintendent. 1994, c. 11, s. 77 (6); 1997, c. 28, s. 53.

Receipt for offering statement

78.(1)The Superintendent shall issue a receipt for an offering statement unless it appears to him or her that,

(a) the statement or any document accompanying it,

(i) fails to comply in any substantial respect with this Act or the regulations,

(ii) contains any statement, promise, estimate or forecast that is misleading, false or deceptive,

(iii) contains an extract from an opinion or statement of an expert that does not fairly represent the opinion or statement, or

(iv) conceals or omits to state any material facts necessary in order to make any statement contained in the offering statement not misleading in light of the circumstances in which it was made;

(b) the proceeds from the sale of the securities are insufficient, together with the other resources of the credit union, to accomplish the purpose of the issue that is stated in the offering statement; or

(c) it would not be in the public interest to issue a receipt for the offering statement. 1994, c. 11, s. 78 (1); 1997, c. 28, s. 53.

Same

(2)The Superintendent may refuse to issue or may revoke a receipt for an offering statement in any of the following circumstances:

1. The credit union is not complying with section 84.

2. The credit union is under the supervision of a stabilization authority.

3. The credit union is under the administration of the deposit insurer. 1994, c. 11, s. 78 (2); 1997, c. 28, s. 53.

Same

(3)Before refusing to issue a receipt, the Superintendent shall give the applicant an opportunity to be heard. 1994, c. 11, s. 78 (3); 1997, c. 28, s. 53.

Same

(4)A decision to refuse to issue a receipt must be given in writing and must include the reasons for the refusal.

Expiry of receipt

(5)A receipt for an offering statement expires six months after it is issued. 1994, c. 11, s. 78 (4, 5).

Renewal of receipt

79.(1)Application for renewal of the receipt for an offering statement may be made by filing with the Superintendent a copy of the statement in a form approved by the Superintendent and paying the applicable fee. 1994, c. 11, s. 79 (1); 1997, c. 28, s. 53.

Time for application

(2)Application for renewal must be made before the receipt for the offering statement expires.

Receipt

(3)Section 78 applies, with necessary modifications, with respect to the renewal of a receipt. 1994, c. 11, s. 79 (2, 3).

Material change

80.(1)If there is a material change in the facts set out in an offering statement, the credit union shall file with the Superintendent,

(a) an amendment to the offering statement, if no receipt has been issued for the statement; or

(b) a statement of material change, if a receipt has been issued for the offering statement and the receipt has not been revoked or expired. 1994, c. 11, s. 80 (1); 1997, c. 28, s. 53.

Time

(2)The credit union shall give the Superintendent the amendment or statement of material change promptly and, in any event, within ten days after the date on which the material change occurred. 1994, c. 11, s. 80 (2); 1997, c. 28, s. 53.

Notice to persons

(3)The credit union shall give a copy of the amendment or statement of material change to every person to whom it gave a copy of the offering statement. 1994, c. 11, s. 80 (3).

Replacement statement

(4)A credit union may, and if requested to do so by the Superintendent, shall file with the Superintendent a new offering statement instead of one or more statements of material change. 1994, c. 11, s. 80 (4); 1997, c. 28, s. 53.

Contents

(5)Sections 77 and 78 apply with respect to a statement of material change as if it were an offering statement.

Exclusion

(6)In this section,

“material change” does not include such types of change as may be prescribed. 1994, c. 11, s. 80 (5, 6).

Distribution of statements

81.(1)A credit union shall give a copy of an offering statement or statement of material change to each member that requests a copy of one.

Same

(2)A person who offers a security in a credit union for sale shall give a copy of the offering statement and statement of material change, if any, to a prospective purchaser upon request and to a purchaser.

Withdrawal from purchase

(3)An agreement of purchase and sale in respect of securities is not binding on the purchaser if the person from whom the purchaser purchases the security receives written or telegraphic notice of the purchaser’s intention not to be bound by the agreement not later than midnight on the second day, exclusive of Saturdays and holidays after receipt by the purchaser of the latest offering statement. 1994, c. 11, s. 81.

Effect of misrepresentation

82.(1)If an offering statement or a statement of material change contains a misrepresentation, a purchaser of a security shall be deemed to have relied upon the misrepresentation if it was a misrepresentation when the purchase was made.

Exception

(2)Subsection (1) does not apply if the purchaser knew about the misrepresentation when purchasing the security. 1994, c. 11, s. 82 (1, 2).

Right of action

(3)The purchaser has a right of action for damages against,

(a) the credit union;

(b) every person, other than an employee of a credit union, who sells the security on behalf of the credit union;

(c) every director of the credit union at the time the offering statement or statement of material change was filed with the Superintendent;

(d) every person whose consent has been filed pursuant to a requirement of the regulations but only with respect to reports, opinions or statements that have been made by them; and

(e) every person who signed the offering statement or statement of material change other than the persons included in clauses (a) to (d). 1994, c. 11, s. 82 (3); 1997, c. 28, s. 53.

Same

(4)If the purchaser purchased the security from a credit union, the purchaser may elect to exercise a right of rescission against the credit union, in which case the purchaser has no right of action for damages against the credit union. 1994, c. 11, s. 82 (4).

Defence

(5)A person who signed the disclosure certificate in a form approved by the Superintendent or a director is not liable under this section if he or she proves one of the following:

1. The offering statement or statement of material change was filed with the Superintendent without the person’s knowledge or consent. As soon as the person became aware that it had been filed with the Superintendent, the person advised the Superintendent that it was filed with the Superintendent without the person’s knowledge or consent.

2. The person was not aware of the misrepresentation when the offering statement or material change statement was filed with the Superintendent. After the receipt for the statement was issued but before the purchaser bought the security, the person immediately after he or she became aware of the misrepresentation advised the Superintendent that he or she withdrew consent to filing the statement with the Superintendent.

3. The person had no reasonable grounds to believe, and did not believe, that there had been a misrepresentation. 1994, c. 11, s. 82 (5); 1997, c. 19, s. 5 (3); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (4).

Interpretation

(6)In this section,

“misrepresentation” means,

(a) an untrue statement of material fact, or

(b) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. 1994, c. 11, s. 82 (6).

Restrictions on transfer of securities

83.(1)Securities issued pursuant to clause 75 (1) (a) may not be transferred except to another member of the credit union or to a prescribed person.

Same

(2)A transfer of securities under subsection (1) shall be made in the manner and subject to the prescribed conditions.

Same

(3)A transfer of securities under subsection (1) is effective when the transfer is recorded in the credit union’s register of securities. 1994, c. 11, s. 83.

PART VI
CAPITAL AND LIQUIDITY

Adequacy of capital and liquidity

84.(1)A credit union shall maintain, in relation to its operations, adequate and appropriate forms of capital and liquidity.

Same

(2)A credit union shall comply with the regulations governing adequate capital and liquidity. 1994, c. 11, s. 84.

Additional requirements

85.(1)The Superintendent may order a credit union,

(a) to increase its capital; or

(b) to provide additional liquidity in such forms and amounts as the Superintendent may require. 1994, c. 11, s. 85 (1); 1997, c. 28, s. 53.

Circumstances

(2)Despite a credit union’s compliance with the regulations governing adequate capital and liquidity, the Superintendent may impose the requirements set out in subsection (1),

(a) if there are reasonable grounds to believe that the credit union is not complying with the requirements of this Act and the regulations concerning the management of risk in making loans and investments and in the general management of credit union business;

(b) if the Superintendent considers that imposing the requirement is necessary to protect the interests of members, shareholders or depositors; or

(c) if the Superintendent considers that imposing the requirement is necessary to ensure the financial security and integrity of the credit union. 1994, c. 11, s. 85 (2); 1997, c. 28, s. 53.

Compliance

(3)The credit union shall comply with the requirement within such time as the Superintendent specifies in the order. 1994, c. 11, s. 85 (3); 1997, c. 28, s. 53.

Variation of requirements

86.(1)A credit union may apply to the Superintendent for a variation of the requirements under section 84. 1994, c. 11, s. 86 (1); 1997, c. 28, s. 53.

Application

(2)An application must be in a form approved by the Superintendent and must describe how and when the credit union will meet the requirements under section 84. 1994, c. 11, s. 86 (2); 1997, c. 28, s. 53.

Variation

(3)The Superintendent may grant the variation subject to any terms he or she considers appropriate if he or she considers that granting the variation is in the interest of the members of the credit union and that the credit union will meet the requirements under section 84 within a reasonable time. 1994, c. 11, s. 86 (3); 1997, c. 28, s. 53.

Appeal of decision

87.(1)A credit union may appeal a decision of the Superintendent under section 85 by making written submissions to the Tribunal, within 15 days after receiving the Superintendent’s decision. 1997, c. 28, s. 56.

No automatic stay on appeal

(2)An appeal of the Superintendent’s decision does not stay the operation of the decision. 1994, c. 11, s. 87 (2).

Valuation of asset

88.If the Superintendent has appraised the value of an asset held by a credit union or a subsidiary and the value determined by the Superintendent varies materially from the value placed by the credit union or the subsidiary on the asset, the Superintendent shall send to the credit union, its auditor, its audit committee and the stabilization authority for the credit union a written notice of the value of the asset as determined by the Superintendent. 1994, c. 11, s. 88; 1997, c. 28, s. 53.

Report re adequacy

89.A credit union shall provide a report in a form approved by the Superintendent concerning its compliance with section 84 to such persons and at such times as required by the Superintendent. 1994, c. 11, s. 89; 1997, c. 28, s. 53.

Provision for losses and accrued interest

90.A credit union shall make monthly provision for doubtful loans and establish reserves as prescribed. 1994, c. 11, s. 90; 1999, c. 12, Sched. I, s. 2 (5).

PART VII
GOVERNING THE CREDIT UNION

Directors

Qualifications of directors

91. Only a natural person who meets the following criteria is eligible to be a director of a credit union:

1. He or she is a member of the credit union.

2. He or she is at least eighteen years of age.

3. He or she is a Canadian citizen or a person lawfully admitted to Canada for permanent residency who is ordinarily resident in Canada. 1994, c. 11, s. 91.

Disqualified individuals

92. (1) The following individuals are disqualified from being directors of a credit union:

1. One whose membership in any credit union has been terminated, other than voluntarily.

2. One who a court has decided is of unsound mind.

3. One who is an undischarged bankrupt or who has been discharged as a bankrupt in the five years preceding the date on which he or she may be elected as director.

4. One who is more than ninety days in arrears in the payment of a debt owed to the credit union unless the credit union has agreed to extend the time for repayment.

5. One who has been convicted, in the five years preceding the date on which he or she may be elected as a director, of an offence described in subsection (4) and who has not received a pardon for the offence.

6. One whose membership in a professional association has been terminated, in the five years preceding the date on which he or she may be elected as director, for professional misconduct.

7. An employee of the credit union or a league in which the credit union is a member, or an employee’s spouse, same-sex partner, parent or child.

8. A professional adviser to the credit union.

9. An employee of the deposit insurer or stabilization authority for the credit union.

10. A public servant employed in regulating credit unions.

11. One who does not complete a prescribed training program as required by the regulations. 1994, c. 11, s. 92 (1); 1999, c. 6, s. 19 (3).

Exception

(2) Despite paragraph 7 of subsection (1), an individual is not disqualified from becoming a director solely because,

(a) he or she provides, without remuneration, services to the credit union that are ordinarily provided by an employee; or

(b) he or she is the parent or child of an employee of the credit union and the employee is not an officer of the credit union. 1994, c. 11, s. 92 (2).

(3) Spent: 1994, c. 11, s. 92 (3).

Type of offence

(4) The offence must be one that,

(a) is related to the qualifications, functions or duties of a director of a body corporate;

(b) involves theft or fraud punishable by a term of imprisonment for five years or more;

(c) involves a contravention or failure to comply with this Act, a predecessor of this Act or an Act governing a subsidiary of the credit union; or

(d) involves a contravention or failure to comply with the Securities Act. 1994, c. 11, s. 92 (4).

Number of directors

93.(1)A credit union may, by by-law, change the number of its directors.

Minimum

(2)A credit union must have a minimum of five directors. 1994, c. 11, s. 93.

Election of board

94.(1)Directors must be elected in the manner provided in the by-laws.

Election in rotation

(2)The by-laws may provide for the election and retirement of directors in rotation.

Voting

(3)A member who votes at an election of directors shall cast a number of votes equal to the number of directors to be elected but the member may not cast more than one vote for one candidate. 1994, c. 11, s. 94.

Term of office

95.(1)Directors hold office for such term as the by-laws provide.

If election delayed

(2)If an election is not held within the period set out in a credit union’s by-laws, the directors continue in office until their successors are elected.

First directors

(3)Each of the persons named as first directors in the articles is a director until replaced by a person duly elected or appointed in his or her stead.

Maximum number

(4)The by-laws may provide for a maximum number of consecutive terms for directors. 1994, c. 11, s. 95.

Quorum

96.A majority of the board constitutes a quorum. 1994, c. 11, s. 96.

Vacancies

97.(1)If a vacancy occurs in the board and a quorum of directors remains, the directors remaining in office may appoint a qualified individual to fill the vacancy until the next annual meeting of the credit union.

Same, no quorum

(2)If there is not a quorum of directors in office, the remaining directors shall promptly call a general meeting of the members to fill the vacancies; in default of this or if there are no remaining directors, any member may call the meeting. 1994, c. 11, s. 97.

Ceasing to hold office

98.(1)A director ceases to hold office,

(a) at the end of the annual meeting at which his or her term of office expires or upon the election of a successor;

(b) when he or she dies or resigns;

(c) when he or she becomes ineligible to hold office under section 91 or 92;

(d) when he or she is removed from office under section 99, 100 or 101;

(e) when the deposit insurer replaces the board and appoints a person to assume the powers of the board under subsection 295 (1).

Date of resignation

(2)A director’s resignation becomes effective when the credit union receives the director’s written resignation or at the time specified in the resignation, whichever is later. 1994, c. 11, s. 98.

Removal by board

99.If a director fails to attend three consecutive board meetings without, in the opinion of the board, reasonable cause or fails to perform any of the duties allotted to him or her as a director, the board may, by resolution, declare the director’s position vacant. 1994, c. 11, s. 99.

Removal by members

100. (1) The members of a credit union may remove a director before his or her term of office expires. 1994, c. 11, s. 100 (1).

Vote

(2) A director is removed from office by a special resolution passed at a general meeting of the members duly called for that purpose. 2002, c. 18, Sched. H, s. 3 (4).

Notice

(3) The notice calling the meeting must state that the purpose of the meeting is to remove the director named in the notice. 1994, c. 11, s. 100 (3).

Right to make representations

(4) At the meeting, the director is entitled to make such representations about the resolution for his or her removal. 1994, c. 11, s. 100 (4).

Right to counsel

(5) The director may be represented by legal counsel or an agent at the meeting. 1994, c. 11, s. 100 (5).

Replacement

(6) If the members remove the director from office, they shall elect another director at the same meeting to hold office in his or her stead for the remainder of his or her term of office. 1994, c. 11, s. 100 (6).

Removal by Superintendent

101.(1)This section applies if the Superintendent has reasonable grounds to believe that a director of a credit union may not be fit, as to character or competence, to hold office as a director. 1994, c. 11, s. 101 (1); 1997, c. 28, s. 53.

Request for material

(2)The Superintendent may require the credit union to give him or her such information and material as the Superintendent may consider necessary to decide upon the fitness of an individual to be a director and the credit union shall do so within twenty days after the request is made. 1994, c. 11, s. 101 (2); 1997, c. 28, s. 53.

Notice of hearing

(3)The Superintendent must notify the director and the credit union within forty-five days after the request if the Superintendent intends to hold a hearing concerning the fitness of the director to hold office. 1994, c. 11, s. 101 (3); 1997, c. 28, s. 53.

Vacancy declared

(4)After giving the credit union and director an opportunity to be heard, the Superintendent may declare the director’s position vacant if the Superintendent determines that the director is not fit to hold office. 1994, c. 11, s. 101 (4); 1997, c. 28, s. 53.

Statement re opposition

102.(1)In the following circumstances, a director is entitled to give the credit union a written statement setting out why he or she opposes any proposed action or resolution by the directors or members:

1. If the director learns of a meeting of the board or members called for the purpose of removing him or her from office.

2. If a vacancy in the director’s position is about to be filled following his or her resignation or removal.

3. If the director’s term of office has expired or is about to expire. 1994, c. 11, s. 102 (1).

Circulation of statement

(2)The credit union shall, within thirty days after receipt of the statement, send a copy of the statement to the Superintendent and a notice to every member stating that a copy of the statement is available on request. 1994, c. 11, s. 102 (2); 1997, c. 28, s. 53.

Same

(3)In addition to a delivery permitted under section 335, a notice under this section may be delivered by publishing the notice in a newspaper that circulates in the community in which the head office of the credit union is located.

Immunity

(4)A credit union and a person acting on its behalf does not incur any liability by reason only of sending the statement as required by subsection (2). 1994, c. 11, s. 102 (3, 4).

Statement on resignation

103.(1)A director who resigns is entitled to give the credit union a written statement setting out his or her reasons for resigning. 1994, c. 11, s. 103 (1).

Information to Superintendent

(2)The Superintendent may require the director to give him or her such information relating to the resignation as the Superintendent specifies and the director shall promptly do so. 1994, c. 11, s. 103 (2); 1997, c. 28, s. 53.

Statement re disagreement

(3)If a director resigns as a result of a disagreement with the other directors or the officers of a credit union, the director shall give the credit union and the Superintendent a written statement setting out the nature of the disagreement. 1994, c. 11, s. 103 (3); 1997, c. 28, s. 53.

Circulation of statement

(4)The credit union shall, within thirty days after receipt of the statement under subsection (3), send a copy of the statement to the Superintendent and a notice to every member stating that a copy of the statement is available on request. 1994, c. 11, s. 103 (4); 1997, c. 28, s. 53.

Same

(5)In addition to a delivery permitted under section 335, a notice under this section may be delivered by publishing the notice in a newspaper that circulates in the community in which the head office of the credit union is located.

Immunity

(6)A credit union and a person acting on its behalf does not incur any liability by reason only of sending the statement as required by subsection (4). 1994, c. 11, s. 103 (5, 6).

Powers and Duties of the Board

Duties of the board

104.(1)The board shall manage or supervise the management of the business and affairs of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations or the by-laws.

Specific duties

(2)Without limiting the generality of subsection (1), the directors shall,

(a) establish investment and lending policies, standards and procedures in accordance with section 190;

(b) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information; and

(c) designate a committee of the board to monitor the procedures.

First directors

(3)The first directors of a credit union named in the articles have all the powers and duties and are subject to all the liabilities of directors. 1994, c. 11, s. 104.

By-law powers

105.(1)The board may pass by-laws governing the conduct of the affairs of the credit union.

Same

(2)The board shall pass by-laws, subject to this Act and the regulations, governing prescribed matters if they are not provided for by this Act or the regulations or set out in the articles.

Limitation

(3)By-laws that are contrary to this Act, the regulations or the articles of the credit union are void.

Same

(4)By-laws that relieve a person of obligations or requirements under this Act or the regulations are void.

Restrictive by-laws

(5)A by-law may impose greater restrictions in respect of a matter than are imposed under this Act or the regulations. 1994, c. 11, s. 105.

Remuneration of directors

106.The procedure for setting the remuneration of directors and members of committees shall be established by by-law. 1994, c. 11, s. 106.

When by-law effective

107. (1) A by-law is not effective until it is passed by the board and confirmed, with or without variation, by a special resolution passed at a general meeting of the members duly called for that purpose or by such greater proportion of the votes cast as the articles may provide. 2002, c. 18, Sched. H, s. 3 (5).

Filing

(2) After a by-law is confirmed, the board shall forward two copies of it, signed by two officers or one officer and one director of the credit union, to the Superintendent. 1994, c. 11, s. 107 (2); 1997, c. 28, s. 53.

Restriction re directors’ remuneration

108.(1)The Superintendent may, by order, restrict the remuneration payable to the directors if, in his or her opinion, the remuneration otherwise payable is excessive in the circumstances. 1994, c. 11, s. 108 (1); 1997, c. 28, s. 53.

Repayment of remuneration

(2)The order may require the directors to reimburse the credit union for remuneration already received.

Report to members

(3)The board shall report its total expenses and total remuneration for the year in the annual report. 1994, c. 11, s. 108 (2, 3).

Executive Committee

Executive committee

109.(1)The members of a credit union may, by special resolution, authorize the board to delegate any of its powers to an executive committee or another subcommittee of the board.

Exception

(2)Despite subsection (1), the following powers cannot be delegated to the executive committee or another subcommittee of the board:

1. Filling vacancies on the board or the audit committee.

2. Appointing or removing the chief executive officer, treasurer, general manager or director of the credit union.

3. Appointing signing officers.

4. Adopting, amending or repealing by-laws.

5. Issuing securities except in the manner and on the terms authorized by the board.

6. Authorizing the payment of a commission upon the sale of shares.

7. Purchasing, redeeming or otherwise acquiring shares issued by the credit union.

8. Approving the financial statements.

9. Authorizing the purchase, sale, lease, exchange or other disposition of material assets.

10. Declaring dividends or patronage returns.

11. Expelling a member.

Number of members

(3)The committee must have at least three members.

Composition

(4)Committee members must be appointed by the board from among the directors.

Quorum

(5)A majority of the members of the committee constitutes a quorum. 1994, c. 11, s. 109.

Credit Committee

Credit committee

110.(1)Except as made unnecessary by a by-law referred to in subsection 122 (4), a credit union shall establish a credit committee.

Number of members

(2)The committee must have at least three members and may have such greater number as is provided in the by-laws.

Term of office

(3)Credit committee members hold office for such term as the by-laws provide.

If election delayed

(4)If an election is not held within the period set out in a credit union’s by-laws, the members continue in office until their successors are elected. 1994, c. 11, s. 110.

Eligibility for membership

111.(1)Only a natural person who meets the following criteria is eligible to be a credit committee member:

1. He or she is a member of the credit union.

2. He or she is at least eighteen years of age.

3. He or she is a Canadian citizen or a person lawfully admitted to Canada for permanent residency who is ordinarily resident in Canada.

Disqualified individuals

(2)An individual is disqualified from being a committee member if he or she would be disqualified under section 92 from becoming a director.

Ineligible officials

(3)A director, an officer or a member of the audit committee is not eligible to be a credit committee member but the chair of the credit union may be a committee member if the by-laws permit. 1994, c. 11, s. 111.

Election of members

112.(1)Credit committee members must be elected by the members in the manner set out in the by-laws.

Election in rotation

(2)The by-laws may provide for the election and retirement of committee members in rotation but, in that case, no committee member may be elected for a term of more than three years.

Voting

(3)A member of the credit union who is eligible to vote at an election of credit committee members and who votes must cast a number of votes equal to the number of committee members to be elected but the member may not cast more than one vote for one candidate. 1994, c. 11, s. 112.

Training program

113.Every member of a credit committee must successfully complete a prescribed training program, as required by the regulations. 1994, c. 11, s. 113.

Quorum

114.A majority of committee members, excluding the chair, constitutes a quorum of the credit committee. 1994, c. 11, s. 114.

Vacancies

115.If a vacancy occurs in the credit committee, and a quorum remains, the remaining committee members may appoint a qualified individual to fill the vacancy until the next annual meeting of the credit union. 1994, c. 11, s. 115.

Ceasing to hold office

116.(1)A member of a credit committee ceases to hold office,

(a) at the end of the annual meeting at which his or her term of office expires or until a successor is elected;

(b) when he or she dies or resigns;

(c) when he or she becomes ineligible to hold office under section 111;

(d) when he or she is removed from office under section 117 or 118;

(e) when the deposit insurer replaces the committee and appoints a person to assume the powers of the committee under subsection 295 (1).

Date of resignation

(2)A member’s resignation is effective when the credit union receives the member’s written resignation or at the time specified in the resignation, whichever is later. 1994, c. 11, s. 116.

Removal by committee

117.(1)The credit committee may declare a committee member’s position vacant if the member,

(a) does not attend three consecutive committee meetings without, in the opinion of the committee, reasonable cause; or

(b) does not perform any of the duties allotted to him or her as a committee member.

Same

(2)The credit committee shall declare a committee member’s position vacant if the member no longer meets the eligibility requirements of the office. 1994, c. 11, s. 117.

Removal by members

118. (1) The members of a credit union may remove a credit committee member before his or her term of office expires. 1994, c. 11, s. 118 (1).

Vote

(2) A committee member is removed from office by a special resolution passed at a general meeting of the members duly called for that purpose. 2002, c. 18, Sched. H, s. 3 (6).

Notice

(3) The notice calling the meeting must state that the purpose of the meeting is to remove the committee member named in the notice. 1994, c. 11, s. 118 (3).

Right to make representations

(4) At the meeting, the committee member is entitled to make representations about the resolution for his or her removal. 1994, c. 11, s. 118 (4).

Right to counsel

(5) The committee member may be represented by legal counsel or an agent at the meeting. 1994, c. 11, s. 118 (5).

Replacement

(6) If the members remove the committee member from office, they shall elect another committee member at the same meeting to hold office in his or her stead for the remainder of his or her term of office. 1994, c. 11, s. 118 (6).

Committee meetings

119.The credit committee shall hold meetings not more than three months apart and shall keep minutes of its meetings. 1994, c. 11, s. 119.

Reports by committee

120.(1)The credit committee shall report to the board at such intervals as may be prescribed by a report containing such information as may be prescribed.

Same

(2)The committee shall report to the membership of the credit union at the annual meeting by a report containing such information as may be prescribed. 1994, c. 11, s. 120.

Duties of Credit Committee

Duties of committee

121.(1)The credit committee shall consider all applications for loans to members of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations or the by-laws.

Approval of loans

(2)The committee may approve loans within the limits provided in the credit union’s lending licence or its by-laws if they are more restrictive. 1994, c. 11, s. 121.

Loan officers

122.(1)The credit union may, by by-law, establish the position of loan officer.

Duties

(2)The by-law may require a loan officer to perform the duties of a credit committee or such portion of those duties as is specified.

Appointment of employees

(3)The board may appoint employees of the credit union to act as loan officers.

May supersede credit committee

(4)A by-law that provides that the person appointed as a loan officer perform all the duties of the credit committee must also provide that, as long as the by-law remains in force,

(a) it is not necessary to elect a credit committee; or

(b) the credit committee has the powers of an advisory body only. 1994, c. 11, s. 122.

Delegation of loan approvals

123.(1)The credit committee may, upon such conditions as the board may specify, authorize an officer, including a loan officer, to approve loans on its behalf.

Duties of authorized persons

(2)The responsibilities and duties of any person authorized to approve loans are concurrent with the responsibilities and duties of the credit committee.

Reports

(3)A person authorized to approve loans shall give a written report to the credit committee at such intervals as may be prescribed containing such information as may be prescribed. 1994, c. 11, s. 123.

Prohibition re loans

124.The board cannot overturn a decision of the credit committee or a person authorized under section 123 to reject a loan application. 1994, c. 11, s. 124.

Audit Committee

Audit committee

125.(1)A credit union shall establish an audit committee.

Number of members

(2)The committee must have at least three members or such greater number as is provided in the by-laws.

Composition of committee

(3)Subject to the by-laws, the committee may be composed of directors appointed by the board or members who are not directors elected by the members.

Term of office

(4)Committee members hold office for such term as the by-laws provide.

If election delayed

(5)If an election is not held or an appointment made within the period set out in a credit union’s by-laws, the members continue in office until their successors are elected or appointed. 1994, c. 11, s. 125.

Eligibility for membership

126.(1)Only a natural person who meets the following criteria is eligible to be an audit committee member:

1. He or she is a member of the credit union.

2. He or she is at least eighteen years of age.

3. He or she is a Canadian citizen or a person lawfully admitted to Canada for permanent residency who is ordinarily resident in Canada.

Disqualified individuals

(2)An individual is disqualified from being a committee member if he or she would be disqualified under section 92 from becoming a director.

Ineligible officials

(3)An officer or employee of the credit union or of a subsidiary of the credit union who is involved in the day-to-day operations of the credit union or subsidiary is not eligible to be a committee member.

Same

(4)A member of the credit committee is not eligible to be a member of the audit committee. 1994, c. 11, s. 126.

Election of members

127.(1)In the case of an audit committee of elected members, the members must be elected in the manner set out in the by-laws.

Election in rotation

(2)The by-laws may provide for the election and retirement of committee members in rotation but, in that case, no committee member may be elected for a term of more than three years.

Voting

(3)A member of the credit union who is eligible to vote at an election of committee members and who votes must cast a number of votes equal to the number of committee members to be elected but the member may not cast more than one vote for one candidate. 1994, c. 11, s. 127.

Training program

128.Every member of an audit committee must successfully complete a prescribed training program, as required by the regulations. 1994, c. 11, s. 128.

Quorum

129.A majority of committee members constitutes a quorum of the audit committee. 1994, c. 11, s. 129.

Vacancies on elected committees

130.(1)In the case of an audit committee of elected members, if a vacancy occurs in the committee and a quorum remains, the remaining committee members may appoint a qualified individual to fill the vacancy.

If no quorum

(2)If a quorum does not remain, the board may appoint a person to fill the vacancy until the next annual meeting of the credit union. 1994, c. 11, s. 130.

Vacancies on appointed committees

131.In the case of an audit committee appointed by the board, if a vacancy occurs in the committee, the board may appoint a person to fill the vacancy until the next annual meeting of the credit union. 1994, c. 11, s. 131.

Ceasing to hold office

132.(1)A member of an audit committee ceases to hold office,

(a) at the end of the annual meeting at which his or her term of office expires or until a successor is elected or appointed;

(b) when he or she dies or resigns;

(c) when he or she becomes ineligible to hold office under section 126;

(d) when he or she is removed from office under section 135 or 136;

(e) when the deposit insurer replaces the committee and appoints a person to assume powers of the committee under subsection 295 (1).

Date of resignation

(2)A committee member’s resignation becomes effective when the credit union receives the member’s written resignation or at the time specified in the resignation, whichever is later. 1994, c. 11, s. 132.

Committee meetings

133.(1)The audit committee shall hold meetings not more than three months apart.

Same

(2)The auditor, a member of the audit committee or a director may call a meeting of the audit committee at any time.

Minutes

(3)The committee shall keep minutes of its meetings.

Attendance by directors

(4)Any director may attend, as an observer, meetings of an audit committee of elected members. 1994, c. 11, s. 133.

Reports by committee

134.(1)The audit committee shall report to the board within sixty days after each committee meeting or at the next board meeting, whichever is earlier, setting out the results of the meeting.

Same

(2)The committee shall report to the membership of the credit union at the annual meeting by a report containing such information as may be prescribed. 1994, c. 11, s. 134.

Removal by committee

135.(1)The audit committee may declare a committee member’s position vacant if the member,

(a) does not attend three consecutive committee meetings without, in the opinion of the committee, reasonable cause; or

(b) does not perform any of the duties allotted to him or her as a committee member.

Same

(2)The committee shall declare a committee member’s position vacant if the member no longer meets the eligibility requirements of the office. 1994, c. 11, s. 135.

Removal by members

136.(1)The members of a credit union may remove an audit committee member before his or her term of office expires.

Vote

(2)A committee member is removed from office by a resolution passed by two-thirds of the votes cast at a general meeting of the members duly called for the purpose.

Notice

(3)The notice calling the meeting must state that the purpose of the meeting is to remove the committee member named in the notice.

Right to make representations

(4)At the meeting, the committee member is entitled to make representations about the resolution for his or her removal.

Right to counsel

(5)The committee member may be represented by legal counsel or an agent at the meeting.

Replacement

(6)If the members remove the committee member from office, they shall elect another committee member at the same meeting to hold office in his or her stead for the remainder of his or her term of office. 1994, c. 11, s. 136.

Powers and Duties of Audit Committee

General

137.The audit committee has such duties as are set out in this Act, the regulations and the by-laws. 1994, c. 11, s. 137.

Duties re misappropriation

138.(1)The audit committee shall promptly notify the board, the auditor, the deposit insurer, the stabilization authority for the credit union and the Superintendent if any of the following matters come to the attention of the committee:

1. A person has misappropriated or misdirected funds, securities or other property of the credit union.

2. The board, a director, the credit committee, a credit committee member, an officer or an employee engaged by the board has contravened or failed to comply with this Act, the regulations or the by-laws. 1994, c. 11, s. 138 (1); 1997, c. 28, s. 53.

Assistance

(2)Subject to the board’s approval, which shall not be unreasonably withheld, the committee may retain one or more auditors or may call upon the stabilization authority for the credit union, the league of which the credit union is a member or the deposit insurer to assist it in determining whether a misappropriation or misdirection has occurred.

Remuneration

(3)The committee shall fix the remuneration payable to the auditors, the stabilization authority or the deposit insurer for the assistance and the credit union shall pay it. 1994, c. 11, s. 138 (2, 3).

Power to call meeting

139.The audit committee may call a meeting of the board to consider a matter of concern to the committee. 1994, c. 11, s. 139.

Officers

Officers

140.(1)A credit union must have a chair and a corporate secretary and may have such other officers as are provided for in the by-laws.

Same

(2)Subject to this Act, the regulations and the by-laws, the board may establish the duties of the credit union’s officers.

Corporate secretary

(3)The board may elect or appoint the corporate secretary from among the directors or may appoint an employee of the credit union as corporate secretary.

Remuneration

(4)Officers are entitled to receive such remuneration and other payments as the board approves.

Same

(5)No officer or employee is entitled to be compensated on any basis that would relate the compensation to an increase in the assets of the credit union. 1994, c. 11, s. 140.

Duties of corporate secretary

141.The corporate secretary shall ensure that the records of the by-laws of the credit union and the minutes of board meetings are kept up to date. 1994, c. 11, s. 141.

Duties of Directors, Officers and Committee Members

Duty of confidentiality

142. (1) Every director, officer, member of a committee established under this Act or employee of a credit union shall keep confidential any information received by the credit union or by a subsidiary or other affiliate of the credit union that they know or should know is confidential to the credit union or subsidiary or other affiliate. 2002, c. 18, Sched. H, s. 3 (7).

Use of information

(2) A director, officer, member of a committee established under this Act or employee of a credit union shall not enter into a transaction in which he or she makes use of the information in order to obtain, directly or indirectly, a benefit or advantage for any person other than the credit union or a subsidiary or other affiliate of the credit union. 2002, c. 18, Sched. H, s. 3 (7).

Confidentiality re members

143.(1)Every director, officer, member of a committee established under this Act or employee of a credit union shall keep confidential all information respecting members’ transactions with the credit union. 1994, c. 11, s. 143 (1).

Exception

(2)Despite subsection (1), a director, officer, member of a committee established under this Act or an authorized employee may disclose information,

(a) to a person acting in a confidential or professional relationship to the credit union including an employee of a league in which the credit union is a member;

(b) to a financial institution with which the credit union has transactions that may involve confidential matters;

(c) to a credit grantor or to a reporting agency, if the disclosure is for the purpose of determining the creditworthiness of the member;

(d) to the Superintendent, deposit insurer and the stabilization authority for the credit union; and

(e) to any other person entitled to the information by law. 1994, c. 11, s. 143 (2); 1997, c. 28, s. 53.

Duty of care

144.(1)Every director, officer and member of a committee established under this Act shall exercise the powers and discharge the duties of his or her office honestly, in good faith and in the best interests of the credit union.

Standard of care

(2)The director, officer or committee member shall exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. 1994, c. 11, s. 144.

Duty to comply

145.(1)Every director, officer, member of a committee established under this Act and employee of a credit union shall comply with this Act, the regulations made under it and the articles and by-laws of the credit union. 1994, c. 11, s. 145 (1).

Same

(2)A director, officer, committee member or employee shall comply with any requirements imposed by the Superintendent under this Act. 1994, c. 11, s. 145 (2); 1997, c. 28, s. 53.

No exculpation

(3)No provision in any contract, in any resolution or in the by-laws of a credit union relieves a director, officer, committee member or employee from a duty under this section or relieves him or her from liability for a breach of a duty. 1994, c. 11, s. 145 (3).

Conflicts of Interest

Disclosure of interest

146.(1)This section applies with respect to a director or an officer of a credit union or a member of a committee established under this Act who,

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

(b) is a director or an officer of an entity that is a party to a material contract or proposed material contract with the credit union;

(c) has a material interest in a person who is a party to a material contract or proposed material contract with the credit union; or

(d) is a spouse, same-sex partner, parent or child of an individual who is a party to a material contract or proposed material contract with the credit union. 1994, c. 11, s. 146 (1); 1999, c. 6, s. 19 (4).

Same

(2)The director, officer or committee member shall disclose, in writing, to the credit union or ask to have the nature and extent of his or her interest entered in the minutes of board meetings.

Time of disclosure, director

(3)The director shall make the disclosure,

(a) at the board meeting at which a proposed contract is first considered;

(b) if the director was not then interested in a proposed contract, at the first meeting after the director becomes so interested;

(c) if the director becomes interested after a contract is made, at the first meeting after the director becomes so interested; or

(d) if a person who is interested in a contract later becomes a director, at the first meeting after he or she becomes a director.

Same, officer or committee member

(4)The officer or committee member shall make the disclosure,

(a) promptly after he or she becomes aware that a proposed contract is to be considered or a contract has been considered at a board meeting;

(b) if he or she becomes interested after a contract is made, promptly after becoming so interested;

(c) if a person who is interested in a contract later becomes an officer or committee member, promptly after becoming an officer or committee member.

Same, no board approval

(5)If a material contract or proposed material contract is one that, in the ordinary course of business of the credit union, would not require approval by the board or the members, the director, officer or committee member shall make the disclosure promptly after becoming aware of the contract or proposed contract.

Continuing disclosure

(6)A general notice to the board by a director, officer or committee member declaring that he or she is a director or officer of an entity, or has a material interest in a person, and is to be regarded as interested in any contract made with that entity or person, is sufficient disclosure of an interest in relation to any contract so made. 1994, c. 11, s. 146 (2-6).

Voting

147.(1)A director to whom section 146 applies shall not be present or vote on any resolution to approve the contract unless the contract is,

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

(b) a contract relating primarily to the director’s remuneration as a director or as a member of a committee established under this Act or an officer, employee or agent of the credit union or a subsidiary of it or an entity controlled by it;

(c) a contract for indemnity under section 157 or for insurance under section 156; or

(d) a contract with a subsidiary of the credit union.

Same

(2)A director to whom section 146 applies shall not take part in the discussion on any resolution to approve an investment or a transaction in relation to which disclosure is required under section 146 and the director shall not be present at any meeting of the board while it is dealing with the matter.

Director not to use influence

(3)A director referred to in subsection (2) shall not attempt in any way to influence the voting on any resolution to approve an investment or a transaction in relation to which disclosure is required under section 146.

Ineligibility

(4)A director who knowingly contravenes subsection (1) ceases to hold office as a director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated or formed by or under an Act of the Province of Ontario. 1994, c. 11, s. 147.

Avoidance standards

148.(1)A contract described in subsection 146 (1) is neither void nor voidable by reason only,

(a) of the relationship between the person or entity and the director, officer or committee member; or

(b) that an interested director is present at or is counted to determine the presence of a quorum at the board meeting that authorized the contract,

if the director, officer or committee member made the required disclosure, the contract was approved by the board or the members of the credit union and the contract was reasonable and fair to the credit union at the time it was approved.

Application to court

(2)If a director, officer or committee member of a credit union fails to disclose an interest in a material contract in accordance with section 146, a court may, on the application of the credit union or a member of the credit union, set aside the contract on such conditions as the court thinks fit. 1994, c. 11, s. 148.

Prohibition re acting for credit union

149.(1)This section applies with respect to a person who is a director of a credit union or a member of a committee established under this Act.

Same

(2)The person or a partnership or corporation from which the person receives compensation shall not act, for compensation, in a professional capacity in respect of business matters related to the credit union. 1994, c. 11, s. 149.

Miscellaneous

Validity of actions

150.An act by a director, officer or member of a committee established under this Act is not invalid by reason only of a defect discovered afterward in his or her appointment, election or qualification. 1994, c. 11, s. 150.

Requirement for bond

151.(1)Every officer or employee who receives or has charge of money shall, on assuming the duties of office, furnish a bond for the due accounting of money that he or she receives.

Amount of bond

(2)The bond must be in an amount that is not less than any minimum that may be prescribed. 1994, c. 11, s. 151.

Liability of directors, etc.

152.A liability imposed under this Act upon a director, officer, member of a committee established under this Act or a person authorized under section 123 to approve loans is in addition to any other liability that is by law imposed upon him or her. 1994, c. 11, s. 152.

Specific liability of directors

153.(1)The directors of a credit union who vote for or consent to a resolution of the directors authorizing the issue of shares contrary to subsection 59 (1), or the issue of subordinated indebtedness contrary to section 186 for a consideration other than money are jointly and severally liable to the credit union to make good any amount by which the consideration is less than the fair market value that the credit union would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution.

Further liabilities

(2)The directors of a credit union who vote for or consent to a resolution of the directors authorizing,

(a) a redemption or purchase of shares;

(b) a reduction of capital;

(c) a payment of a dividend;

(d) the payment of an indemnity; or

(e) any transaction with a restricted party,

contrary to this Act, are jointly and severally liable to restore to the credit union any amounts so distributed or paid and not otherwise recovered by the credit union and any amounts in relation to any loss suffered by the credit union. 1994, c. 11, s. 153.

Contribution

154.(1)A director who has satisfied a judgment in relation to the director’s liability under section 153 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded.

Recovery

(2)A director who is liable under section 153 is entitled to apply to a court for an order compelling a member, shareholder or other person to pay or deliver to the director,

(a) any money or property that was paid or distributed to the member, shareholder or other person contrary to this Act; or

(b) an amount equal to the value of the loss suffered by the credit union as a result of any transaction contrary to Part IX or the regulations made under that Part.

Court order

(3)Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so,

(a) order a member, shareholder, or other person to pay or deliver to a director any money or property that was paid or distributed to the member, shareholder or other person contrary to this Act or any amount referred to in clause (2) (b);

(b) order a credit union to return or issue membership shares or shares to a member or shareholder from whom the credit union has purchased, redeemed or otherwise acquired membership shares or shares; or

(c) make any further order it thinks fit. 1994, c. 11, s. 154.

Reliance on statement

155.A director, officer, member of a committee or an employee of a credit union is not liable under sections 144, 145 and 153 if the individual relies, in good faith, on,

(a) financial statements of the credit union represented to them by an officer of the credit union or in a written report of the auditor of the credit union fairly to reflect the financial condition of the credit union; or

(b) a report of an accountant, lawyer or other professional person whose profession lends credibility to a statement made by the person. 1994, c. 11, s. 155.

Insurance for directors and officers

156.(1)A credit union may purchase and maintain insurance for the benefit of an eligible person as defined in section 157 against any liability incurred by the person in his or her capacity as,

(a) a director, officer or member of a committee; or

(b) a director or officer of another entity if the person acts or acted in that capacity at the credit union’s request.

Exception

(2)Subsection (1) does not apply if the liability relates to the person’s failure to act honestly, in good faith and in the best interests of the credit union. 1994, c. 11, s. 156.

Indemnity for directors, etc.

157.(1)In this section,

“eligible person” means, with respect to a credit union,

(a) a director, officer or member of a committee established under this Act,

(b) a former director, officer or member of such a committee, or

(c) a person who acts or acted at the request of the credit union as a director or an officer of an entity of which the credit union is or was a member, shareholder or creditor.

Indemnification

(2)A credit union may indemnify an eligible person in respect of any proceeding to which the person is made a party by reason of serving or having served in a qualifying capacity.

Exception

(3)Despite subsection (2), the credit union may not indemnify the person in respect of a proceeding by or on behalf of the credit union to procure a judgment in its favour.

Same, derivative action

(4)With the approval of a court, a credit union may indemnify an eligible person in respect of a proceeding by or on behalf of the credit union or entity to procure a judgment in its favour to which the person is made a party by reason of serving or having served in a qualifying capacity.

Restriction

(5)The credit union may indemnify an eligible person under this section only if,

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

(b) in the case of a proceeding enforced by a monetary penalty, the person had reasonable grounds for believing that the impugned conduct was lawful.

Right to indemnity

(6)An eligible person is entitled to indemnity from the credit union in connection with the defence of a proceeding to which the person is made a party by reason of serving or having served in a qualifying capacity if the eligible person,

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

(b) fulfils the conditions set out in clauses (5) (a) and (b).

Extent of indemnity

(7)An indemnity under this section is against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment reasonably incurred by the person in connection with the specified proceeding.

Heirs

(8)A credit union may indemnify the heirs or personal representatives of any eligible person that the credit union is authorized to indemnify under this section.

Interpretation

(9)In this section, to serve in a qualifying capacity means,

(a) acting or having acted as a director, officer or member of a committee established under this Act; or

(b) acting or having acted at the request of the credit union as a director or an officer of an entity of which the credit union is or was a member, shareholder or creditor. 1994, c. 11, s. 157.

Application for indemnification

158.(1)A credit union or an eligible person under section 157 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit. 1994, c. 11, s. 158 (1).

Notice

(2)The applicant shall give the Superintendent written notice of the application. 1994, c. 11, s. 158 (2); 1997, c. 28, s. 53.

Other notice

(3)The court may order notice to be given to any interested person. 1994, c. 11, s. 158 (3).

Right to participate

(4)The Superintendent and each interested person is entitled to appear and to be heard at the hearing of the application in person or by counsel. 1994, c. 11, s. 158 (4); 1997, c. 28, s. 53.

Auditor

Appointment of auditor

159.(1)At their first general meeting, the members of a credit union shall appoint an auditor to hold office until the close of the first annual meeting but, if the members fail to do so, the board shall promptly make the appointment.

Same

(2)At each annual meeting, the members of a credit union shall appoint an auditor to hold office until the close of the next annual meeting but, if the members fail to do so, the auditor in office continues in office until a successor is appointed.

Casual vacancy

(3)The board may fill a casual vacancy in the office of auditor but, while the vacancy continues, the surviving or continuing auditor, if any, may act. 1994, c. 11, s. 159 (1-3).

Appointment by the Superintendent

(4)If no auditor is appointed under subsection (1) or (2), the Superintendent may require the board to appoint an auditor to hold office until the close of the next annual meeting. 1994, c. 11, s. 159 (4); 1997, c. 28, s. 53.

Notice of appointment

(5)The credit union shall promptly notify the auditor in writing of the appointment. 1994, c. 11, s. 159 (5).

Qualification as auditor

160. (1) An individual or firm of accountants is qualified to be an auditor of a credit union if,

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

(i) is licensed under the Public Accountancy Act,

Note: On a day to be named by proclamation of the Lieutenant Governor, subclause (i) is amended by the Statutes of Ontario, 2004, chapter 8, section 46, Table by striking out “Public Accountancy Act” and substituting “Public Accounting Act, 2004”. See: 2004, c. 8, ss. 46, Table; 51 (2).

(ii) is ordinarily resident in Canada, and

(iii) is independent of the credit union; and

(b) in the case of a firm of accountants, the member or employee of the firm jointly designated by the firm and the credit union to conduct the audit of the credit union on behalf of the firm is qualified in accordance with clause (a). 1994, c. 11, s. 160 (1).

Independence

(2) For purposes of subsection (1),

(a) independence is a question of fact; and

(b) a person is not independent of a credit union,

(i) if that person, any partner of that person or any member of a firm of accountants of which that person is an employee is,

(A) a director, officer, member of a committee established under this Act, or employee of the credit union, deposit insurer, stabilization authority for the credit union, or any subsidiary of the credit union,

(B) a business partner of any director, officer, committee member or employee of the credit union or a subsidiary of the credit union,

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

(D) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of the credit union or of any subsidiary of the credit union within the two years immediately preceding the person’s proposed appointment as an auditor of the credit union, other than a subsidiary of the credit union acquired pursuant to section 197, or

(ii) if the firm of accountants of which that person is an employee,

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

(B) has been a liquidator, trustee in bankruptcy, receiver or receiver and manager of the credit union or of any subsidiary of the credit union within the two years immediately preceding the person’s proposed appointment as an auditor of the credit union, other than a subsidiary of the credit union acquired pursuant to section 197. 1994, c. 11, s. 160 (2).

Ineligibility as receiver

161.The following persons are not eligible to be appointed as a receiver, a receiver and manager or a liquidator of a credit union:

1. A person who is or has been an auditor of the credit union within the two years preceding the proposed appointment.

2. A partner or employer of the person described in paragraph 1.

3. A person who is a spouse, same-sex partner, child or parent of the person described in paragraph 1. 1994, c. 11, s. 161; 1999, c. 6, s. 19 (5).

Remuneration

162.The board shall fix the remuneration of the auditor. 1994, c. 11, s. 162.

Replacement of auditor

163.(1)A person, other than the incumbent auditor, is not eligible to be appointed as auditor unless, at least fifteen days before the meeting at which the auditor is to be appointed, a member has given notice to the credit union of an intention to nominate the person for auditor.

Notice re nomination

(2)The credit union shall send a copy of the member’s notice to the incumbent auditor and to the proposed nominee and shall notify the members of the credit union of the proposed nomination.

Right to make representations

(3)The incumbent auditor is entitled to give the credit union written representations concerning the proposal not to reappoint the auditor.

Circulation of representations

(4)If the incumbent auditor gives the representations to the credit union at least three days before notice of the meeting is to be mailed, the credit union shall, at its own expense, forward a copy of the representations together with the notice of the meeting to each member entitled to receive the notice. 1994, c. 11, s. 163.

Removal of auditor

164.(1)The members of a credit union may remove an auditor before the auditor’s term of office expires.

Vote

(2)An auditor is removed from office by a resolution passed by a majority of the votes cast at a general meeting of members duly called for that purpose.

Notice to auditor

(3)The credit union shall, at least fifteen days before mailing the notice of the meeting, give the following material to the auditor before calling the general meeting:

1. Written notice of the intention to call the meeting and of the date on which the notice of the meeting is to be mailed.

2. A copy of all material proposed to be sent to members in connection with the meeting.

Right to make representations

(4)The auditor is entitled to give the credit union written representations concerning the proposal to remove the auditor.

Circulation of representations

(5)If the auditor gives the representations to the credit union at least three days before notice of the meeting is to be mailed, the credit union shall, at its own expense, forward a copy of the representations together with the notice of the meeting to each member entitled to receive the notice.

Replacement

(6)If the members remove the auditor from office, they shall elect another auditor at the same meeting to hold office for the remainder of the auditor’s term.

Vote

(7)The auditor elected under subsection (6) must be elected by a resolution passed by a majority of the votes cast at the meeting.

Report

(8)For purposes of paragraph 2 of subsection (3), the material must include a report setting out the circumstances and the reasons for the removal of the auditor. 1994, c. 11, s. 164.

Notice re resignation, etc.

165.A credit union shall promptly notify the Superintendent, deposit insurer and stabilization authority for the credit union when an auditor resigns, is replaced or is removed from office and shall inform the Superintendent of the reasons. 1994, c. 11, s. 165; 1997, c. 28, s. 53.

Auditor for subsidiaries

166.(1)A credit union shall take all necessary steps to ensure that its auditor is duly appointed as the auditor of each of its subsidiaries unless the Superintendent authorizes another person to act as auditor of a subsidiary. 1994, c. 11, s. 166 (1); 1997, c. 28, s. 53.

Exception

(2)If a person is appointed as auditor by a body corporate before it becomes a subsidiary of a credit union, the person may complete the term of the appointment. 1994, c. 11, s. 166 (2).

Rights and Duties of Auditors

Right of access

167.(1)The auditor of a credit union has a right of access at all times to all records, documents, accounts and vouchers of the credit union.

Same

(2)The auditor is entitled to require from the board, directors, officers, employees, agents of the credit union and members of the audit committee or the credit committee, if any, such information and explanations as the auditor considers necessary to enable the auditor to make such reports as are required under this Act.

Same

(3)On the request of the auditor, the former directors, officers, employees or agents of the credit union shall, to the extent that they are reasonably able to do so, provide such information and explanations as are, in the opinion of the auditor, necessary to enable the auditor to perform the auditor’s duties. 1994, c. 11, s. 167.

Right to attend meetings

168.(1)The auditor is entitled,

(a) to attend any meeting of members or shareholders of the credit union;

(b) to receive all notices and other communications relating to a meeting that a member or shareholder is entitled to receive; and

(c) to be heard at a meeting on any part of the business of the meeting that concerns him or her as auditor.

Required attendance

(2)A member of a credit union who is entitled to vote at a meeting of members may require the auditor to attend such a meeting and the auditor shall do so at the credit union’s expense.

Notice

(3)The member must give written notice to the credit union at least five days before the meeting that the member wishes the auditor to attend. 1994, c. 11, s. 168.

Auditor’s report

169.(1)The auditor shall make such examinations as will enable the auditor to report to the members of the credit union in accordance with this section.

Same

(2)The auditor shall report to the members on the financial statements to be placed before them at the annual meeting.

Qualified report

(3)If the auditor’s opinion is not an unqualified opinion, the auditor shall state in the report the reasons for the qualified opinion.

Facts discovered subsequently

(4)If facts come to the attention of an officer or the board which, if they had been known before the most recent annual meeting, would have required a material adjustment to the financial statement presented at the meeting, the officer or board shall notify the auditor who reported to the members at the meeting; the board shall promptly amend the financial statement and send it to the auditor.

Amendment of report

(5)Upon receipt of the facts furnished under subsection (4) or from any other source, the auditor shall amend the report in respect of the financial statement furnished under that subsection if the auditor considers the amendment necessary.

Notice of amendment

(6)The board shall mail the amended report to the members but, if the board does not do so within a reasonable time, the auditor shall mail it to them. 1994, c. 11, s. 169 (1-6).

Auditing standards

(7)The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Superintendent, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants. 1994, c. 11, s. 169 (7); 1997, c. 28, s. 53.

Duty at meetings

170.If the auditor is present at a meeting of members or shareholders, the auditor shall answer inquiries directed to him or her concerning the basis upon which he or she formed the opinion given under section 169. 1994, c. 11, s. 170.

Extended examination

171.(1)The Superintendent may, in writing, require that the auditor of a credit union,

(a) report to the Superintendent on the extent of the auditor’s procedures in the examination of the credit union’s financial statements;

(b) enlarge or extend the scope of that examination; or

(c) perform any other specific procedure. 1994, c. 11, s. 171 (1); 1997, c. 28, s. 53.

Same

(2)The auditor shall comply with any direction by the Superintendent under subsection (1) and report to the Superintendent and to such other persons as the Superintendent may direct the results of the extended examination or a specified procedure. 1994, c. 11, s. 171 (2); 1997, c. 28, s. 53.

Special examination

(3)The Superintendent may, in writing, require that the auditor make an examination relating to the adequacy of the procedures adopted by the credit union for the safety of its creditors, members and shareholders, or any other examination that the public interest may require. 1994, c. 11, s. 171 (3); 1997, c. 28, s. 53.

Same

(4)The auditor shall report the results of an examination to the Superintendent or to such persons as the Superintendent may direct. 1994, c. 11, s. 171 (4); 1997, c. 28, s. 53.

Special examination by auditor appointed by Superintendent

(5)The Superintendent may direct that a special audit of a credit union be made if, in the opinion of the Superintendent, it is necessary and may appoint, for that purpose, an auditor qualified pursuant to subsection 160 (1). 1994, c. 11, s. 171 (5); 1997, c. 28, s. 53.

Expenses payable by credit union

(6)The credit union shall pay the expenses of an examination or audit referred to in this section after the expenses have been approved, in writing, by the Superintendent. 1994, c. 11, s. 171 (6); 1997, c. 28, s. 53.

Duty to report contravention, etc.

172.(1)The auditor of a credit union shall report in writing to the chair of the board, the chief executive officer, chief financial officer and audit committee of the credit union any transaction or conditions that have come to the auditor’s attention affecting the well-being of the credit union that, in the auditor’s opinion, are not satisfactory and require rectification.

Same

(2)Without restricting the generality of subsection (1), the auditor shall report to the persons described in subsection (1) on,

(a) transactions of the credit union that, in the auditor’s opinion, have not been within the powers of the credit union;

(b) loans made by the credit union to any person the aggregate amount of which exceeds one half of one per cent of the total assets of the credit union and in respect of which, in the auditor’s opinion, loss to the credit union is likely to occur; or

(c) any circumstances that indicate that there may have been a contravention of this Act or the regulations.

Same

(3)If a report is made with respect to loans described in clause (2) (b), it is not necessary to report those loans again unless, in the opinion of the auditor, the amount of the loss likely to occur has increased. 1994, c. 11, s. 172 (1-3).

Transmission of report

(4)If an auditor reports under this section,

(a) the auditor shall transmit the report, in writing, to the persons described in subsection (1);

(b) the report shall be presented at the first meeting of directors following its receipt;

(c) the report shall be incorporated in the minutes of that meeting; and

(d) the auditor shall, at the time of transmitting the report pursuant to clause (a), provide the Superintendent, deposit insurer and stabilization authority for that credit union with a copy of the report. 1994, c. 11, s. 172 (4); 1997, c. 28, s. 53.

PART VIII
BUSINESS POWERS

Permitted Business Activities

Permitted activities

173.Subject to this Act, a credit union shall not engage in or carry on a business or business activity other than the following businesses, business activities and such others as may be authorized by this Act or prescribed:

1. Provide financial services primarily to its members, depositors, subsidiaries and affiliates.

2. Hold and deal with real property.

3. Act as a custodian of property on behalf of its members, depositors, subsidiaries and affiliates.

4. Provide administrative, educational, promotional, technical, research and consultative services to its members, depositors, subsidiaries and affiliates.

5. Make loans to officers and employees of the credit union.

6. Promote merchandise and services to its members or the holder of any payment, credit or charge card issued by the credit union, its subsidiaries or affiliates.

7. Engage in the sale of,

i. tickets, including lottery tickets, on a non-profit, public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest,

ii. urban transit tickets, and

iii. tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government. 1994, c. 11, s. 173.

Restrictions on Powers

Ancillary businesses

174.(1)A credit union shall not deal in goods or engage in any trade or business except as authorized by this Act or the regulations. 1994, c. 11, s. 174 (1).

Same

(2)Despite subsection (1), a credit union may, with the Superintendent’s written approval, deal in goods or engage in any trade or business that is reasonably ancillary to the provision of financial services. 1994, c. 11, s. 174 (2); 1997, c. 28, s. 53.

Prohibition re financial services

(3)A credit union shall not provide financial services that are prohibited by the regulations.

Networking

(4)Subject to this Act, a credit union may act as an agent for a subsidiary or other prescribed persons or entities in respect of the provision of services to the credit union’s members, depositors, affiliates and other subsidiaries and refer members, depositors, affiliates or subsidiaries to one of its subsidiaries or other prescribed persons or entities. 1994, c. 11, s. 174 (3, 4).

Restriction re partnerships

175.(1)A credit union shall not be a general partner in a limited partnership or a partner in any other partnership. 1994, c. 11, s. 175 (1).

Exception

(2)Despite subsection (1), the Superintendent may authorize a credit union to become a general partner in a limited partnership or a partner in another partnership. 1994, c. 11, s. 175 (2); 1997, c. 28, s. 53.

Restrictions on insurance

176.(1)A credit union may undertake the business of insurance or act as an agent for any person in placing insurance only to the extent permitted by the regulations.

Savings

(2)Nothing in this section precludes a credit union from,

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

(b) obtaining group insurance for its employees, its members or the employees of a subsidiary.

Same

(3)Nothing in this section precludes a league from obtaining group insurance for its employees, its members or the employees of its members or of a subsidiary.

No pressure

(4)A credit union shall not exercise pressure on a member to place insurance for the security of the credit union with any particular insurance company.

Insurance requirement

(5)A credit union may require that any insurance chosen by a member meet with its approval.

Same

(6)The approval required under subsection (5) shall not be unreasonably withheld.

Interpretation

(7)For the purpose of this section, the business of insurance includes the issuing of an annuity where the liability thereon is contingent on the death of a person. 1994, c. 11, s. 176.

Restrictions on fiduciary activities

177.A credit union may undertake fiduciary activities only to the extent permitted by the regulations. 1994, c. 11, s. 177.

Guarantees

178.(1)A credit union may not guarantee the payment of money on behalf of another person unless,

(a) it is a fixed sum of money, with or without interest thereon; and

(b) the person has an unqualified obligation to reimburse the credit union for the full amount being guaranteed. 1994, c. 11, s. 178 (1).

Superintendent’s authorization

(2)Despite subsection (1), the Superintendent may authorize a credit union to guarantee a payment in circumstances other than those described in that subsection. 1994, c. 11, s. 178 (2); 1997, c. 28, s. 53.

Conditions

(3)A guarantee is subject to such conditions and restrictions as may be prescribed.

Limit on amount

(4)The aggregate value of a credit union’s guarantees together with those of its subsidiaries must not exceed a prescribed per cent of the regulatory capital and deposits of the credit union. 1994, c. 11, s. 178 (3, 4).

Exemption

(5)The Superintendent may exempt a credit union from the limit under subsection (4) on the aggregate value of guarantees. 1994, c. 11, s. 178 (5); 1997, c. 28, s. 53.

Non-application

(6)Subsection (1) does not apply in the case of an indemnity under section 157.

Same

(7)Clause (1) (a) does not apply with respect to a guarantee given on behalf of a league if the payment guaranteed represents the obligation of the league to settle for payment items in accordance with the by-laws and rules of the Canadian Payments Association or such other guarantees as may be prescribed. 1994, c. 11, s. 178 (6, 7).

Appointment of receiver, etc.

179.(1)A credit union shall not give a person the right to appoint a receiver or manager of the property or affairs of the credit union.

Exception

(2)Subsection (1) does not apply in the context of,

(a) a voluntary dissolution of the credit union; or

(b) a security interest given on behalf of a league or financial institution if the security interest represents security for the obligations of the league or financial institution to settle for payment items in accordance with the by-laws and rules of the Canadian Payments Association. 1994, c. 11, s. 179.

Deposits

Deposits accepted from members, etc.

180.A credit union may accept deposits only from,

(a) its members;

(b) the deposit insurer;

(c) Her Majesty in right of Canada or of a province;

(d) an agency of Her Majesty in right of either Canada or of a province;

(e) the government of a foreign country;

(f) a political subdivision or an agency of a government of a foreign country;

(g) municipalities;

(h) crown agencies;

(i) entities directly funded by the federal government, a provincial government or a municipality;

(j) a stabilization authority for the credit union; or

(k) other persons or entities approved by the Superintendent. 1994, c. 11, s. 180; 1997, c. 28, s. 53.

Prohibition re amount of withdrawal

181.(1)An officer or employee of a credit union is guilty of an offence if he or she permits a person to withdraw more money from an account than the person has on deposit in the account or than is specified in an overdraft protection agreement between the person and the credit union.

Remedies not affected

(2)Nothing in this section affects a remedy for the recovery of an amount withdrawn from an account that exceeds the amount that was on deposit. 1994, c. 11, s. 181.

Withdrawals by negotiable instrument

182.(1)With the Superintendent’s written approval, a credit union that has a risk management system may, if authorized by the board, permit the use of negotiable instruments for the withdrawal of money on deposit. 1994, c. 11, s. 182 (1); 1997, c. 28, s. 53.

Revocation by Superintendent

(2)The Superintendent may revoke an approval to use negotiable instruments,

(a) if the financial position of the credit union has been adversely affected by the use of negotiable instruments; or

(b) if the credit union has failed to comply with the requirements under this Act or the regulations for capital adequacy and liquidity. 1994, c. 11, s. 182 (2); 1997, c. 28, s. 53.

Transition

(3)A credit union that has the Superintendent’s written approval to use negotiable instruments on the day this subsection comes into force shall be deemed to have received the Superintendent’s approval to continue their use. 1994, c. 11, s. 182 (3); 1997, c. 28, s. 53.

Debt Obligations

Borrowing power

183.(1)A credit union shall not borrow except as permitted by this Act and the regulations.

Same

(2)A credit union may borrow if authorized to do so by its by-laws.

Scope of authority

(3)The by-law may authorize the credit union to borrow money at such rates of interest and on such conditions as the board may determine. 1994, c. 11, s. 183 (1-3).

Approval of by-law

(4)A by-law authorizing a credit union to borrow has no effect until it is approved by the Superintendent. 1994, c. 11, s. 183 (4); 1997, c. 28, s. 53.

Limit on amount

(5)Subject to subsection (6), a credit union shall not borrow an aggregate amount exceeding 25 per cent of its capital and deposits.

Same

(6)A by-law of a credit union may authorize it to borrow an aggregate amount not exceeding 50 per cent of its regulatory capital and deposits. 1994, c. 11, s. 183 (5, 6).

General prohibition re pledging of assets

184.A credit union shall not create a security interest in any property of the credit union to secure an obligation of the credit union unless it is authorized by its by-laws and approved, in writing, by the Superintendent. 1994, c. 11, s. 184; 1997, c. 28, s. 53.

Pledging assets as security

185.(1)Subject to section 184, a credit union may pledge any of its assets as security for money owed by, or a debt obligation of, the credit union if,

(a) the money was borrowed or the debt obligation was issued to enable it to meet a short term need for liquid funds arising from its operations;

(b) the total amount borrowed in relation to which the assets are pledged does not exceed 50 per cent of its capital and deposits; and

(c) the money is owed to a league, a bank listed in Schedule I or II to the Bank Act (Canada), a loan corporation or trust corporation registered under the Loan and Trust Corporations Act, the deposit insurer or a prescribed person or entity.

Saving

(2)Section 184 does not apply to prevent a pledge of assets to the Government of Canada with respect to the sale of Canada Savings Bonds or in the context of such other transactions as may be prescribed.

Restriction

(3)A credit union shall not pledge any of its assets to a restricted party of the credit union. 1994, c. 11, s. 185 (1-3).

Notice re acquisitions

(4)A credit union shall notify the Superintendent in writing of any beneficial interest in property acquired by the credit union, other than by way of realization, that is subject to a security interest. 1994, c. 11, s. 185 (4); 1997, c. 28, s. 53.

Exceptions

(5)Subsections (1) and (4) and section 184 do not apply with respect to the pledging of such classes of personal property as are prescribed or with respect to property with an aggregate value less than a prescribed amount.

Definition

(6)For the purposes of this section,

“restricted party” has the meaning given to that expression by the regulations. 1994, c. 11, s. 185 (5, 6).

Restrictions on subordinated indebtedness

186.(1)A credit union shall not issue subordinated indebtedness unless it is fully paid for in money or, with the approval of the Superintendent, in property. 1994, c. 11, s. 186 (1); 1997, c. 28, s. 53.

References to subordinated indebtedness

(2)No person shall, in any prospectus, offering statement, advertisement, correspondence or literature relating to any subordinated indebtedness issued or to be issued by a credit union, refer to the subordinated indebtedness other than as subordinated indebtedness.

Not a deposit

(3)Subordinated indebtedness issued by a credit union is not considered to be a deposit.

Other currencies

(4)When issuing subordinated indebtedness, a credit union shall provide that any aspect of the subordinated indebtedness relating to money or involving the payment of or the liability to pay money in relation to the subordinated indebtedness be in Canadian currency. 1994, c. 11, s. 186 (2-4).

Limit imposed by Superintendent

187.(1)The Superintendent may inquire into the borrowing of a credit union and may limit, by an order served on the board, its authority to borrow more money. 1994, c. 11, s. 187 (1); 1997, c. 28, s. 53.

Reasons to be given

(2)The Superintendent shall set out, in the order, the reasons for the limit. 1994, c. 11, s. 187 (2); 1997, c. 28, s. 53.

Effect

(3)The credit union shall not exercise its borrowing power in excess of the limit set out in the order issued by the Superintendent. 1994, c. 11, s. 187 (3); 1997, c. 28, s. 53.

Borrowing from other credit unions

188.A credit union shall not borrow money from another credit union without the written approval of the Superintendent. 1994, c. 11, s. 188; 1997, c. 28, s. 53.

Monitoring by board

189.The board of a credit union shall inform itself at each board meeting about the particulars of borrowings made since the last board meeting by the credit union. 1994, c. 11, s. 189.

Investment and Lending Policies and Procedures

Prudent standards

190.In making investment and lending decisions, a credit union shall adhere to policies and procedures that a reasonable and prudent person would apply in respect of a portfolio of investments and loans to avoid undue risk of loss and to obtain a reasonable return. 1994, c. 11, s. 190.

Investment and lending policy

191.(1)A credit union shall establish written policies and procedures to ensure that it complies with section 190.

Prescribed requirements

(2)The policies and procedures must meet the prescribed requirements and must include such standards, conditions and restrictions as may be prescribed.

Development of policy

(3)The board shall develop policies and procedures and shall review them at least once each year. 1994, c. 11, s. 191.

Changes required by Superintendent

192.The Superintendent may order the board of a credit union to revise its investment and lending policies and procedures if the Superintendent considers, on reasonable grounds, that the policies or procedures do not meet the requirements of this Act or the regulations or that they are otherwise deficient. 1994, c. 11, s. 192; 1997, c. 28, s. 53.

Loans

Restrictions re loans

193.A credit union shall not make loans unless it has a lending licence and except in accordance with its lending licence, this Act and the regulations. 1994, c. 11, s. 193.

Loans to members only

194.(1)A credit union may advance money, by loan, only to its members.

Approval re unincorporated associations

(2)A credit union shall not lend money to an unincorporated association unless the loan is approved by the credit committee, if any, and the board. 1994, c. 11, s. 194 (1, 2).

Exception

(3)Subsection (2) does not apply to a loan less than a given amount if,

(a) the by-laws provide that loans under the given amount need not be subject to the board’s approval; and

(b) the Superintendent has approved that provision in the by-laws. 1994, c. 11, s. 194 (3); 1997, c. 28, s. 53.

Prescribed lending limits

195.(1)A credit union shall not make loans in excess of such lending limits as may be prescribed. 1994, c. 11, s. 195 (1).

Variation

(2)On application by a credit union, the Superintendent may, on terms specified by the Superintendent, grant a variation from a prescribed lending limit and may impose a higher or lower limit if satisfied that there are reasonable grounds for the variation. 1994, c. 11, s. 195 (2); 1997, c. 28, s. 53.

Lending licence

196.(1)If its by-laws authorize it to do so, a credit union may apply for a lending licence by submitting an application in a form approved by the Superintendent and paying the applicable fee. 1994, c. 11, s. 196 (1); 1997, c. 28, s. 53.

Power to issue licence

(2)The Superintendent may issue to a credit union a lending licence containing such conditions and restrictions as he or she considers appropriate in the circumstances. 1994, c. 11, s. 196 (2); 1997, c. 28, s. 53.

Revocation of licence

(3)The Superintendent may amend or revoke a lending licence if the credit union fails to comply with the licence or with a provision of this Act or a regulation. 1994, c. 11, s. 196 (3); 1997, c. 28, s. 53.

Lower lending limits

(4)The Superintendent may lower a credit union’s lending limit if he or she believes on reasonable grounds that its current lending limits may adversely affect the interests of members, depositors or shareholders. 1994, c. 11, s. 196 (4); 1997, c. 28, s. 53.

Transition

(5)A credit union that has a by-law in effect on the day this subsection comes into force authorizing it to lend money with respect to specified classes of loans shall be deemed to hold a lending licence with respect to prescribed classes of loans that are comparable to the classes specified in the by-law with a lending limit for each such class of loan as set out in the by-law on the day this subsection comes into force. 1994, c. 11, s. 196 (5).

Loan workouts

197.(1)Despite anything in this Part, if a credit union has made a loan and a default has occurred, the credit union may, subject to the agreement between the credit union and entity governing the loan, acquire,

(a) if the entity is a body corporate, all or any of the shares of the body corporate;

(b) if the entity is an unincorporated entity, all or any of the ownership interests in the entity;

(c) all or any of the shares or all or any of the ownership interests in any entity that is an affiliate of the entity; or

(d) all or any of the shares of a body corporate that is primarily engaged in holding shares of, ownership interests in, or assets acquired from, the entity or any of its affiliates. 1994, c. 11, s. 197 (1).

Divestment

(2)If the securities acquired by a credit union because of a default in a loan are not an investment permitted by this Act or the regulations, the credit union shall divest itself of the securities within two years after their acquisition or within such further time as the Superintendent may authorize. 1994, c. 11, s. 197 (2); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Cost of Borrowing

Definition of “cost of borrowing”

197.1In sections 197.2 to 197.10,

“cost of borrowing”, for a loan made by a credit union, means,

(a) the interest or discount applicable to the loan,

(b) any amount charged in connection with the loan that is payable by the borrower to the credit union,

(c) any amount charged in connection with the loan that is payable by the borrower to a person other than the credit union, where the amount is chargeable, directly or indirectly, by the person to the credit union, and

(d) any charge prescribed by the regulations as included in the cost of borrowing,

but does not include any charge prescribed by the regulations as excluded from the cost of borrowing.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Rebate of borrowing costs

197.2(1)This section applies where,

(a) a credit union makes a loan to a natural person;

(b) the loan is not secured by a mortgage on real property;

(c) the loan is required to be repaid either on a fixed future date or by instalments; and

(d) the loan is prepaid in full.

Same

(2)In the circumstances described in subsection (1), the credit union shall, in accordance with the regulations, rebate to the borrower a portion of the cost of borrowing for the loan.

Limitation

(3)For the purposes of subsection (2) and the regulations made under clause 197.10 (1) (b), the cost of borrowing for a loan does not include the interest or discount applicable to the loan.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Disclosure of cost of borrowing

197.3(1)A credit union shall not make a loan to a natural person unless the cost of borrowing and any other information prescribed for the purposes of this section by the regulations have been disclosed by the credit union to the person.

Same

(2)For the purposes of disclosure required by subsection (1), the cost of borrowing,

(a) shall be calculated on the basis that all obligations of the borrower are duly fulfilled;

(b) shall be calculated in accordance with the regulations;

(c) shall be expressed as a rate per annum; and

(d) where required by the regulations, shall be expressed as an amount in dollars and cents.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Additional disclosure – term loans

197.4Where a credit union makes a loan to a natural person and the loan is required to be repaid either on a fixed future date or by instalments, the credit union shall disclose the following to the borrower:

1. Whether the borrower has the right to repay the amount borrowed before the maturity of the loan.

2. Any terms and conditions relating to a right described in paragraph 1, including particulars of the circumstances in which the borrower may exercise the right.

3. Whether any portion of the cost of borrowing for the loan is to be rebated to the borrower or any charge or penalty is to be imposed on the borrower, if the borrower exercises a right described in paragraph 1.

4. The manner in which any rebate, charge or penalty referred to in paragraph 3 is to be calculated.

5. Particulars of any charges or penalties to be imposed on the borrower if the borrower fails to repay the amount of the loan at maturity or fails to pay an instalment on the day the instalment is due to be paid.

6. Particulars of any prescribed change relating to the loan agreement or the cost of borrowing for the loan.

7. Particulars of any rights or obligations of the borrower prescribed by the regulations for the purposes of this section.

8. Any other information prescribed by the regulations for the purposes of this section.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Disclosure in applications for credit cards, etc.

197.5A form or other document used by a credit union for the purposes of an application for a credit card, payment card or charge card shall contain the information prescribed by the regulations for the purposes of this section or be accompanied by a document that contains that information.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Disclosure where credit cards, etc., issued

197.6 Where a credit union issues a credit card, payment card or charge card to a natural person, the credit union shall disclose the following to the person:

1. Particulars of any charges or penalties to be imposed on the person if he or she fails to pay an amount in accordance with the agreement governing the card.

2. Particulars of any charges for which the person becomes responsible by accepting or using the card.

3. Particulars of any prescribed change relating to the loan agreement or the cost of borrowing for any loan obtained through the use of the card.

4. Particulars of any rights or obligations of the person prescribed by the regulations for the purposes of this section.

5. Any other information prescribed by the regulations for the purposes of this section.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Additional disclosure: loans to which ss. 197.4 and 197.6 do not apply

197.7(1)Where a credit union enters into an arrangement for the making of a loan to a natural person and neither section 197.4 nor section 197.6 apply in respect of the arrangement, the credit union shall disclose the following to the person:

1. Particulars of any charges or penalties to be imposed on the person if he or she fails to pay an amount in accordance with the arrangement.

2. Particulars of any charges for which the person becomes responsible by entering the arrangement.

3. Particulars of any prescribed change relating to the arrangement or the cost of borrowing under the arrangement.

4. Particulars of any rights or obligations of the person prescribed by the regulations for the purposes of this section.

5. Any other information prescribed by the regulations for the purposes of this section.

Interpretation

(2)For the purposes of subsection (1), an arrangement for the making of a loan includes an arrangement for a line of credit.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Statement re mortgage renewal

197.8Where a credit union makes a loan to a natural person and the loan is secured by a mortgage on real property, the credit union shall disclose to the person such information respecting renewal of the loan as is prescribed by the regulations.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Disclosure in advertising

197.9(1)This section applies to an advertisement that,

(a) relates to loans, credit cards, payment cards or charge cards that are offered by a credit union to a natural person or to arrangements to which section 197.7 applies that are offered by a credit union to a natural person; and

(b) purports to contain information relating to the cost of borrowing or any other prescribed matter.

Same

(2)No person shall authorize any advertisement described in subsection (1) unless the advertisement contains the information that may be required by the regulations and is in the form and manner that may be prescribed.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (6) by adding the following section:

Regulations re disclosure

197.10(1)The Lieutenant Governor in Council may make regulations,

(a) prescribing, for the purposes of section 197.1, charges that are included in the cost of borrowing and charges that are excluded from the cost of borrowing;

(b) governing rebates to be made under section 197.2;

(c) prescribing information other than the cost of borrowing that must be disclosed under section 197.3;

(d) prescribing the manner of calculating the cost of borrowing for the purposes of section 197.3;

(e) prescribing the circumstances in which the cost of borrowing must be expressed as an amount in dollars and cents for the purposes of section 197.3;

(f) prescribing the manner of calculating any rebate referred to in paragraph 4 of section 197.4;

(g) prescribing changes for the purposes of paragraph 6 of section 197.4, paragraph 3 of section 197.6 and paragraph 3 of subsection 197.7 (1);

(h) prescribing rights and obligations of borrowers for the purposes of paragraph 7 of section 197.4, paragraph 4 of section 197.6 and paragraph 4 of subsection 197.7 (1);

(i) prescribing information that must be disclosed under paragraph 8 of section 197.4, paragraph 5 of section 197.6 and paragraph 5 of subsection 197.7 (1);

(j) prescribing information for the purposes of section 197.5;

(k) prescribing information for the purposes of section 197.8;

(l) prescribing matters for the purposes of clause 197.9 (1) (b) and respecting the form, manner and content of advertisements for the purposes of subsection 197.9 (2);

(m) prescribing the time, manner and form of any disclosure required under sections 197.3 to 197.9;

(n) prescribing classes of loans in respect of which some or all of the requirements of sections 197.2 to 197.9 do not apply;

(o) prohibiting the imposition of any charge or penalty referred to in section 197.4, 197.6 or 197.7;

(p) governing the nature and amount of any charge or penalty referred to in section 197.4, 197.6 or 197.7 that may be imposed by a credit union, including but not limited to,

(i) regulations providing that such a charge or penalty shall not exceed an amount prescribed in the regulation, and

(ii) regulations respecting the costs of the credit union that may be included or must be excluded in the determination of the charge or penalty;

(q) respecting any other matter or thing that is necessary to carry out the purposes of sections 197.2 to 197.9.

Same

(2)A regulation made under clause (1) (a) may exclude charges described in clause (a), (b) or (c) of the definition of “cost of borrowing” in section 197.1.

Same

(3)A regulation made under subsection (1) may be general or particular in its application and may be restricted in its application to the class or classes of loans set out in the regulation.

See: 1999, c. 12, Sched. I, ss. 2 (6), 8 (2).

Investments

Eligible investments

198.(1)A credit union may invest only in such types of securities or property and on such conditions as are prescribed.

Exception, open basket

(2)A credit union may make investments not authorized under subsection (1), if the investment is not prohibited under any other provision of this Act, so long as the total book value of investments made under this subsection and held by the credit union does not exceed a prescribed amount and subject to prescribed conditions.

Same

(3)Subsection (2) does not apply so as to,

(a) enlarge the authority conferred under this Act or the regulations to invest in mortgages or to lend on the security of real estate;

(b) affect the limits established under this Act or the regulations on investments in real estate; or

(c) authorize the credit union to make loans otherwise than in accordance with its lending licence.

Monitoring by board

(4)The board shall inform itself at each board meeting about the particulars of the investments made and held by the credit union since the last board meeting.

Transition

(5)If, on the day subsection (1) comes into force, a credit union is holding investments that are not authorized under this Part, the credit union shall divest itself of them within three years after subsection (1) comes into force. 1994, c. 11, s. 198.

Restriction re single investment

199.(1)A credit union shall not directly or indirectly invest, by way of purchases from or loans to one person or more than one person that, to its knowledge, are connected persons, an amount exceeding a prescribed percentage of its regulatory capital and deposits.

Exception

(2)Subsection (1) does not apply to deposits in or loans to a financial institution, the deposit insurer, the stabilization authority for the credit union or a prescribed person or entity or so as to restrict investments in securities issued or guaranteed by the Government of Canada, including mortgages insured under the National Housing Act (Canada), by the government of any province of Canada or by any municipality in Canada.

Interpretation

(3)For purposes of this section,

“connected persons” has the meaning given to that expression by the regulations and “financial institution” does not include a credit union or a securities dealer. 1994, c. 11, s. 199.

Investment in subsidiaries

200.(1)With the approval of the Superintendent, a credit union may establish or acquire prescribed subsidiaries. 1994, c. 11, s. 200 (1); 1997, c. 28, s. 53.

Similar activities

(2)On written application by a credit union, the Superintendent may, by order and on such conditions as are specified in the order, deem a body corporate named in the order to be, for all purposes of this Act, a body corporate that qualifies as a prescribed subsidiary if its activities are substantially similar to those of a body corporate identified as a prescribed subsidiary. 1994, c. 11, s. 200 (2); 1997, c. 28, s. 53.

Conditions

(3)An investment is subject to such conditions and restrictions as may be prescribed and to such additional conditions as the Superintendent may impose. 1994, c. 11, s. 200 (3); 1997, c. 28, s. 53.

Anti-avoidance

(4)The Superintendent shall refuse to approve an investment if he or she considers that it is made primarily for the purpose of allowing the credit union to avoid the limits under this Act or the regulations on its investments. 1994, c. 11, s. 200 (4); 1997, c. 28, s. 53.

Revocation of approval

(5)The Superintendent may revoke the approval of an investment in a prescribed subsidiary,

(a) if the credit union has failed to comply with the conditions and restrictions applicable to the investment; or

(b) if the body corporate is no longer a prescribed subsidiary. 1994, c. 11, s. 200 (5); 1997, c. 28, s. 53.

Effect of order

(6)Upon the revocation, the credit union shall divest itself of the investment in accordance with the order effecting the revocation.

Restriction

(7)The total book value of investments under this section held by the credit union and of guarantees by the credit union of the obligations of prescribed subsidiaries must not exceed a prescribed percentage of the regulatory capital and deposits of the credit union. 1994, c. 11, s. 200 (6, 7).

Investment in another credit union

201.A credit union shall not invest in another credit union without the approval of the Superintendent. 1994, c. 11, s. 201; 1997, c. 28, s. 53.

Status of investments upon amalgamation, etc.

202.(1)The Superintendent may authorize the acceptance by a credit union of securities or other assets not fulfilling the requirements of this Act,

(a) obtained under an arrangement made in good faith for the reorganization of a body corporate whose securities were previously owned by the credit union;

(b) obtained under an amalgamation with another body corporate of the body corporate whose securities were previously owned by the credit union;

(c) obtained in good faith for the purpose of protecting investments of the credit union;

(d) obtained by virtue of the purchase by the credit union of the assets of another credit union;

(e) obtained by virtue of realizing on the security for a loan where the security is shares in a body corporate; or

(f) obtained in payment or part payment for securities sold by the credit union. 1994, c. 11, s. 202 (1); 1997, c. 28, s. 53.

Divestment

(2)The credit union shall divest itself of the securities or other assets within two years after their acquisition or within such further time as the Superintendent may authorize. 1994, c. 11, s. 202 (2); 1997, c. 28, s. 53.

Exception

(3)The Superintendent may relieve the credit union of the obligation to divest itself of the securities or other assets if the Superintendent is satisfied that they are not inferior in status or value to the securities for which they have been substituted. 1994, c. 11, s. 202 (3); 1997, c. 28, s. 53.

Transfer of Assets

Transfer of assets

203.(1)A credit union shall not transfer all or a substantial portion of its assets unless the transfer is approved by special resolution or ordered under section 205.

Interpretation

(2)A transfer of assets having an aggregate value equal to or more than 15 per cent of a credit union’s assets as at the end of its previous fiscal year constitutes a transfer of a substantial portion of its assets.

Approval by other classes

(3)If a credit union has issued two or more classes of shares, the agreement to transfer assets is subject to the approval, by special resolution, of the holders of each class of shares. 1994, c. 11, s. 203 (1-3).

Agreement

(4)An agreement to transfer assets is subject to the approval of the Superintendent before it is put to the members and shareholders of a credit union for approval. 1994, c. 11, s. 203 (4); 1997, c. 28, s. 53.

Purchase price

(5)If the purchaser is another credit union, the purchasing credit union may assume, as part of the purchase price, liabilities of the selling credit union and may pay the balance,

(a) in cash;

(b) by the issue of shares, except membership shares; or

(c) by the issue of promissory notes,

to the selling credit union or the members of the selling credit union whether or not the members become members of the purchasing credit union.

Limitations

(6)Membership shares may be issued to members of the selling credit union as part of the purchase price only if they become members of the purchasing credit union.

Approval by members and shareholders

(7)Subject to subsections (2) and (3), an agreement between two credit unions to transfer assets is subject to the approval of the members and shareholders of each of the credit unions by special resolution.

Where approval deemed given

(8)If the total assets of the credit union transferring its assets are less than 15 per cent of the total assets of the credit union receiving the assets, the members and shareholders of the receiving credit union shall be deemed to have given approval to the transaction. 1994, c. 11, s. 203 (5-8).

Certificate

(9)The secretary of each credit union involved in a transfer of assets shall,

(a) certify, on the agreement, that it has been approved as required under this section; and

(b) forward a copy of the certified agreement to the Superintendent. 1994, c. 11, s. 203 (9); 1997, c. 28, s. 53.

Where all assets disposed of

(10)A credit union that has disposed of all its assets ceases, on the effective date of the agreement, to carry on business except for the purpose of winding up its affairs, and shall dissolve as soon as possible thereafter. 1994, c. 11, s. 203 (10).

Superintendent’s approval

204.The Superintendent may refuse to approve an agreement by a credit union to transfer all or a substantial portion of its assets if the Superintendent considers that the proposed transfer is contrary to the interest of a credit union that is a party to the agreement or to any of its members. 1994, c. 11, s. 204; 1997, c. 28, s. 53.

Directed transfer

205.If a credit union is under the supervision of a stabilization authority, the Superintendent may, on the application of the stabilization authority, order the credit union to transfer all or substantially all of its assets if the stabilization authority demonstrates that such a transfer would,

(a) protect the interests of the credit union’s depositors or members; or

(b) protect the financial security and integrity of the credit union. 1994, c. 11, s. 205; 1997, c. 28, s. 53.

Interpretation

206.For the purposes of sections 203, 204 and 205, a transfer of property includes a sale, lease, exchange or other disposition of property. 1994, c. 11, s. 206.

PART IX
RESTRICTED PARTY TRANSACTIONS

General prohibition

207.Except to the extent permitted under this Act or the regulations, a credit union or a subsidiary shall not directly or indirectly enter into any transaction with a restricted party of the credit union. 1994, c. 11, s. 207.

Loans to officers

208.A credit union may lend to an officer, a member of a committee established under this Act, or a director an amount in excess of the aggregate of deposits of the officer, member or director only if the credit committee and the board approve the loan before it is made. 1994, c. 11, s. 208.

Regulations

209.The Lieutenant Governor in Council may make regulations governing transactions between a credit union or subsidiary and a restricted party. 1994, c. 11, s. 209.

Interpretation

210.In this Part,

“restricted party” and “transaction” have the meaning given to those expressions in the regulation. 1994, c. 11, s. 210.

PART X
MEETINGS

Notice of meetings

211.(1)Notice of the time and place for holding a meeting of the members of a credit union shall be given in accordance with the by-laws of the credit union, but in no event shall notice be given later than ten days before the date of the meeting or earlier than fifty days before the date of the meeting.

Same

(2)Notice of a meeting must be given to each member of a credit union who, on the record date for notice, appears on the records of the credit union as a member by,

(a) sending the notice by prepaid mail to the member’s latest address as shown on the records of the credit union;

(b) delivering the notice to the member at his or her place of employment; or

(c) publishing the notice in a newspaper that circulates in the community in which the head office of the credit union is located.

Notice of disclosure

(3)Notice of any meeting at which directors are to be elected must contain the information disclosed by a director under section 146.

Meeting of shareholders

(4)Subsections (1), (2) and (3), except clauses (2) (b) and (c), apply, with necessary modifications, to meetings of shareholders.

Interpretation

(5)For the purposes of subsection (2), the record date means the record date as established by the by-laws of the credit union. 1994, c. 11, s. 211.

Annual meeting

212.(1)Subject to the by-laws, the first and every successive annual meeting of a credit union shall be held at such time and place in Ontario as the directors determine.

Same

(2)The annual meeting shall be held no later than 120 days after the end of the credit union’s fiscal year.

Same

(3)If the by-laws do not provide for a place for annual meetings, the annual meeting shall be held at the credit union’s head office.

Business to be dealt with

(4)At an annual meeting, the board of directors shall place before the members,

(a) financial statements;

(b) the report of the audit committee;

(c) the report of the auditor;

(d) the report of the loan officer, if there is a loan officer;

(e) the report of the credit committee, if there is a credit committee; and

(f) such further information respecting the financial position of the credit union and the results of its operations as its by-laws require. 1994, c. 11, s. 212.

Financial statements

213.(1)The financial statements to be placed before the members must show matters prescribed relating separately to,

(a) for the first annual meeting, the period that started on the day the credit union came into existence and ended not more than four months before the annual meeting;

(b) after the first annual meeting, the period started immediately after the end of the last completed financial year and ended not more than four months before the annual meeting; and

(c) the period covered by the financial year next preceding the latest completed financial year, if any.

Report of audit committee

(2)The audit committee’s report must be read at the annual meeting and is open to inspection at the meeting by any member.

Report of auditor

(3)The auditor’s report to the members must be read at the annual meeting and is open to inspection at the meeting by any member.

Approval of financial statements

(4)Financial statements that have not been approved by the credit union’s board may not be placed before the members.

Evidence of approval

(5)The signature, at the foot of the balance sheet, of two authorized directors is evidence of the approval of the board.

Providing financial statements

(6)The notice of the annual meeting of members must,

(a) be accompanied by a copy of the financial statements to be placed before the members and a copy of the auditor’s report; or

(b) specify that copies of the reports required under subsection 212 (4) will be available at the meeting and at the offices of the credit union ten days before the meeting. 1994, c. 11, s. 213 (1-6).

Same

(7)A copy of the reports required, by subsection 212 (4), to be placed before the members must be filed with the Superintendent and sent to the stabilization authority for the credit union at least ten days before the date of the meeting at which they are to be placed. 1994, c. 11, s. 213 (7); 1997, c. 28, s. 53.

Accepted principles

(8)The financial statements shall, except as otherwise specified by the Superintendent, be prepared in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants. 1994, c. 11, s. 213 (8); 1997, c. 28, s. 53.

General meetings

214.The board may at any time call a general meeting of the members or shareholders for the transaction of any business if the general nature of the business is specified in the notice calling the meeting. 1994, c. 11, s. 214.

Proposals

215.(1)Any member may,

(a) submit notice of any matter that the member proposes to raise at the annual meeting; and

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

Notice of proposal

(2)Any proposal of a member submitted for consideration at a meeting must be attached to the notice of the meeting.

Attached statement

(3)If the member submitting the proposal so requests, a statement by the member in support of the proposal and the name and address of the member must be attached to the notice of the meeting.

Length of statement

(4)The statement must not be longer than two hundred words.

Conditions for proposal

(5)A proposal does not need to be attached to the notice of the meeting if,

(a) the proposal is not submitted at least ninety days before the anniversary date of the previous annual meeting;

(b) it clearly appears that the proposal is submitted primarily for the purpose of,

(i) enforcing a personal claim or redressing a personal grievance against the credit union or its directors, officers, members or security holders, or

(ii) promoting general economic, political, racial, religious, social or similar causes;

(c) a proposal by the member had been attached to another notice of a meeting within the preceding two years and the member did not present the proposal at the meeting;

(d) substantially the same proposal was submitted to the members at a meeting held within the preceding two years and the proposal was defeated; or

(e) the right conferred is being abused to get publicity.

Calculating time

(6)The two year period referred to in clauses (5) (c) and (d) ends when the proposal is given to the credit union.

Immunity re circulation proposal

(7)No credit union or person acting on behalf of a credit union incurs any liability from circulating a proposal or statement in compliance with this section. 1994, c. 11, s. 215.

Refusing proposal

216.(1)If a credit union does not intend to include a proposal in a notice of a meeting, it shall, within ten days after receiving the proposal, notify the member submitting it of the intention to omit the proposal from the notice and send to the member reasons for the refusal.

Appeal to court

(2)Any member who disagrees with a refusal to include a proposal may apply to the court for an order restraining the holding of the meeting at which the proposal is sought to be presented.

Same

(3)A credit union or any person who objects to a proposal may apply to the court for an order allowing the credit union to omit the proposal from the notice of meeting, and the court, if it is satisfied that subsection 215 (5) applies, may make the order.

Court order

(4)On an application under subsection (2) or (3), the court may grant the order applied for or any other order that it considers appropriate. 1994, c. 11, s. 216.

Requisition for members’ meeting

217.(1)Five per cent of the members of a credit union may requisition the board to call a general meeting of the members for any purpose that is connected with the affairs of the credit union and that is not inconsistent with this Act.

Requisition for shareholders’ meeting

(2)Two or more shareholders who together hold not less than 5 per cent of the issued and outstanding shares of a credit union that carry the right to vote at a meeting sought to be held may requisition the board to call a meeting of shareholders of the credit union for the purposes stated in the requisition.

Requisition

(3)The requisition must state the general nature of the business to be presented at the meeting, be signed by those making the requisition and deposited at the head office of the credit union.

Several documents

(4)A requisition may consist of several documents, each signed by one or more of those making the requisition.

Duty of directors to call meeting

(5)Upon deposit of a requisition, the board shall forthwith call a general meeting of the members or shareholders, for the transaction of the business stated in the requisition. 1994, c. 11, s. 217 (1-5).

When meeting may be called: by board

(6)If the board does not, within twenty-one days after the deposit of a requisition, call a meeting or refuses to call a meeting any of the requisitionists may ask the Superintendent to order the board to call the meeting. 1994, c. 11, s. 217 (6); 1997, c. 28, s. 53.

Same: by members or shareholders

(7)A meeting called by those requisitioning it must be held within sixty days after the deposit of the requisition.

Calling of meeting

(8)A meeting called under this section must be called as nearly as possible in the same manner as meetings of members or shareholders, are called under the by-laws.

Sufficient notice

(9)Despite subsection (8), twenty-one days notice is sufficient notice of the meeting even if the by-laws provide for a longer notice. 1994, c. 11, s. 217 (7-9).

Telephone and electronic meetings

218.(1)Unless the by-laws otherwise provide, if all the directors present at or participating in a meeting consent, a meeting of directors or of a committee of directors may be held by means of telephone, electronic or other communication facilities as allow all those participating in the meeting to communicate with each other simultaneously and instantaneously.

Director considered present

(2)Every director participating in a meeting by any means described in subsection (1) is considered present at the meeting for purposes of this Act. 1994, c. 11, s. 218.

Dissent of director

219.(1)A director who is present at a meeting of directors or a committee of directors shall be deemed to have consented to any resolution passed or action taken at that meeting unless,

(a) the director’s dissent is entered in the minutes of the meeting;

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

(c) the director sends his or her dissent by registered mail or delivers it to the head office of the credit union immediately after the meeting is adjourned.

Loss of right to dissent

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

Dissent of absent director

(3)A director who is not present at a meeting at which a resolution is passed or action is taken shall be deemed to have consented to the resolution or action unless, within seven days after the director becomes aware of the resolution or action, he or she,

(a) has the dissent placed in the minutes of the meeting; or

(b) sends the dissent by registered mail or delivers it to the head office of the credit union. 1994, c. 11, s. 219.

Meeting required by Superintendent

220.(1)The Superintendent may, by written notice to the credit union and each board member, require a credit union to hold a meeting of directors to consider any matter set out in the notice. 1994, c. 11, s. 220 (1); 1997, c. 28, s. 53.

Attendance by Superintendent

(2)The Superintendent or his or her designate may attend and be heard at the meeting. 1994, c. 11, s. 220 (2); 1997, c. 28, s. 53.

Annual statement to be given to members

221.Every credit union shall, without charge, supply a copy of its last audited financial statement to every member and shareholder applying for it. 1994, c. 11, s. 221.

Inspection of books

222.(1)Except as provided in this Act, no person has a right to inspect the books of a credit union.

Inspecting own account

(2)Any person with an interest in the funds of a credit union may inspect, at all reasonable hours, his or her own account and the books, at whatever place they are kept, containing the names of the members.

By-laws may authorize inspection

(3)A credit union may, by by-law, authorize the inspection of any of its books under such conditions as the by-laws may set out.

Limits on inspection

(4)The right to inspect books is subject to such conditions as to time and manner of inspection as the by-laws may prescribe.

Inspection of other’s account

(5)No person, except an officer or employee of the credit union or a person specifically authorized by a resolution of the board, has the right to inspect the loan or deposit account of any other person without that person’s written consent.

Use of information

(6)A list of members or shareholders obtained under this section shall not be used by any person except in connection with,

(a) an effort to influence the voting of members or shareholders of the credit union;

(b) an offer to acquire shares of the credit union; or

(c) any other matter relating to the affairs of the credit union. 1994, c. 11, s. 222.

Financial statements of subsidiaries

223.(1)Copies of the latest financial statements of each subsidiary of a credit union shall,

(a) be kept on hand by the credit union at its head office; and

(b) be open to examination by the members and shareholders of the credit union and their agents.

Extracts

(2)Everyone entitled to examine the copies of the financial statements may make extracts of the material free of charge during the normal business hours of the credit union.

Application to court

(3)A credit union may, within fifteen days after receiving a request to examine copies of financial statements, apply to the court for an order barring the examination, and the court may, if satisfied that the examination would be detrimental to the credit union or a subsidiary, bar the examination and make any further order it thinks fit. 1994, c. 11, s. 223.

Branches

224.(1)A credit union may establish branches subject to such conditions as are set out in its by-laws.

Branch meetings

(2)A credit union may, by by-law, provide for the holding of branch meetings of the members who belong to that branch.

Election of delegates

(3)If a by-law of a credit union provides for a branch meeting, the members of the branch shall elect delegates, by a resolution passed by two-thirds of the votes cast at the meeting, to represent the members at the annual or general meeting of the credit union.

Powers of delegates

(4)Delegates elected from a branch shall exercise the powers of the members of the branch at all meetings of the credit union.

When members lose vote

(5)Branch members represented by elected delegates at a meeting of a credit union are not entitled to vote at the meeting of the credit union.

Branch meeting procedure

(6)The by-laws of the credit union shall set out,

(a) the number of delegates and votes allowed to each branch at a meeting of the credit union;

(b) the time, place and manner of calling a branch meeting;

(c) the number of members of a branch that constitute a quorum; and

(d) the procedure to be followed in the conduct of a branch meeting.

Majority

(7)The required majority vote for deciding each issue to be voted on at a branch meeting is the same as that required for deciding the issues at meetings of the entire membership of the credit union. 1994, c. 11, s. 224.

PART XI
RETURNS AND INSPECTIONS

Required information

225.A credit union shall provide the Superintendent with such information, at such times and in such form as the Superintendent may require. 1994, c. 11, s. 225; 1997, c. 28, s. 53.

Annual return

226.(1)A credit union shall file an annual return with the Superintendent at the time the Superintendent determines. 1994, c. 11, s. 226 (1); 1997, c. 28, s. 53.

Form and content

(2)The Superintendent may determine the form and content of the annual return. 1994, c. 11, s. 226 (2); 1997, c. 28, s. 53.

Review

(3)The Superintendent shall review the annual return. 1994, c. 11, s. 226 (3); 1997, c. 28, s. 53.

Additional information

(4)For purposes of reviewing an annual return, the credit union, deposit insurer, league and stabilization authority for the credit union shall provide such additional information with respect to the affairs of the credit union as the Superintendent requires. 1994, c. 11, s. 226 (4); 1997, c. 28, s. 53.

Examinations by Superintendent

227.(1)The Superintendent may, at any time, visit the offices of any credit union and inspect and examine its affairs. 1994, c. 11, s. 227 (1); 1997, c. 28, s. 53.

Access to books, records, etc.

(2)The Superintendent is entitled to access to all books, records and other documents of a credit union. 1994, c. 11, s. 227 (2); 1997, c. 28, s. 53.

Answering questions

(3)Every director, officer and employee of a credit union shall answer such questions by the Superintendent as are necessary for the Superintendent to,

(a) ascertain the ability of the credit union to provide for the payment of its liabilities as they become due; and

(b) determine whether the credit union has complied with this Act, the regulations, an order of the Superintendent, an order of the stabilization authority for the credit union or an order of the deposit insurer. 1994, c. 11, s. 227 (3); 1997, c. 28, s. 53.

Report

(4)If the Superintendent believes that a credit union is unable to provide for the payment of its liabilities as they become due, the Superintendent shall immediately notify, in writing, the deposit insurer and stabilization authority for the credit union of the problem. 1994, c. 11, s. 227 (4); 1997, c. 28, s. 53.

Material to be furnished on inspection

(5)For the purpose of an examination by the Superintendent,

(a) a credit union shall prepare and submit to the Superintendent such statements with respect to its business, finances or other affairs as the Superintendent requires; and

(b) the Superintendent may require the directors, officers and auditor of a credit union and the stabilization authority for the credit union to provide information and explanations, to the extent that they are reasonably able to do so, in respect of the condition and affairs of the credit union or any entity in which the credit union has an investment. 1994, c. 11, s. 227 (5); 1997, c. 28, s. 53.

Examination under oath

(6)Upon an inspection or examination, the Superintendent has the powers of a Commission under Part II of the Public Inquiries Act, and that Part applies to the inspection or examination as if it were an inquiry under that Act. 1994, c. 11, s. 227 (6); 1997, c. 28, s. 53.

Seizure of documents and records

228.In the course of any inspection, the Superintendent may seize and take possession of any documents, records or securities of the credit union for purposes of copying the material. 1994, c. 11, s. 228; 1997, c. 28, s. 53.

Inspection by appointee of Superintendent

229.The Superintendent may appoint, in writing, a qualified member of the Superintendent’s staff or any person acting under the Superintendent’s direction to examine, inspect or investigate on the Superintendent’s behalf any matter the Superintendent is required or authorized to examine, inspect or investigate. 1994, c. 11, s. 229; 1997, c. 28, s. 53.

Registers and Documents

Register of members

230.(1)Every credit union shall keep a register of members and shareholders.

Certificate as evidence

(2)A statement as to,

(a) the names and addresses of the members and shareholders;

(b) the number of shares held by each member and shareholder;

(c) the date on which the name of any person or entity was entered in the register as a member or shareholder; or

(d) the date on which any person or entity ceased to be a member,

purporting to be certified by the secretary is, without proof of the office or signature of the secretary, receivable in evidence as proof, in the absence of evidence to the contrary, of the facts stated in it for all purposes in any action, proceeding or prosecution. 1994, c. 11, s. 230.

Documents to be kept

231.(1)Every credit union shall keep the following documents and registers in either English or French:

1. A copy of its articles.

2. The by-laws and resolutions, including special resolutions, of the credit union.

3. A register of the members of the board, executive committee, credit committee and audit committee, and all officers of the credit union, setting out their names, residential addresses, giving the street and number, if any, and occupations, with the several dates on which they have become or ceased to be a member of such board or committee.

4. A register of all securities held by the credit union.

5. Books of account and accounting records with respect to all financial and other transactions of the credit union as may be required by the Superintendent.

6. The minutes of all proceedings at meetings of members, shareholders, directors and any committees. 1994, c. 11, s. 231 (1); 1997, c. 28, s. 53.

Location

(2)The documents and registers that a credit union must keep shall be kept at the credit union’s head office. 1994, c. 11, s. 231 (2).

Same

(3)If the Superintendent orders that documents or registers of a credit union be kept at a place other than the credit union’s head office, they shall be kept at that other place. 1994, c. 11, s. 231 (3); 1997, c. 28, s. 53.

Form of records

232.(1)Any document, record or register required or authorized by this Act to be prepared and kept by a credit union may be,

(a) in a bound or loose-leaf form;

(b) in a photographic film form; or

(c) recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing required information in intelligible written form within a reasonable time.

Conversions

(2)Any document, record or register kept in one form may be converted to any other form. 1994, c. 11, s. 232.

Copies of by-laws

233.(1)A copy of the by-laws of a credit union shall be delivered by the credit union to a member on demand on payment of a fee fixed by the by-laws.

Fee

(2)The fee shall not exceed a prescribed amount. 1994, c. 11, s. 233.

PART XII
ENFORCEMENT

Superintendent’s order

234.(1)The Superintendent may order anything set out in subsection (2) if, in his or her opinion, any person is doing anything that,

(a) is in contravention with this Act or the regulations;

(b) might reasonably be expected, if continued, to result in a contravention of this Act or the regulations; or

(c) constitutes a practice that might prejudice or adversely affect the interest of a member, depositor or shareholder. 1994, c. 11, s. 234 (1); 1997, c. 28, s. 53.

Order

(2)An order may be made ordering any person,

(a) to stop doing any act or pursuing any course of conduct; or

(b) to do any act or pursue any course of conduct. 1994, c. 11, s. 234 (2).

Notice by Superintendent

(3)Before making an order the Superintendent shall give notice to the person of his or her intention to make the order. 1994, c. 11, s. 234 (3); 1997, c. 28, s. 53.

Request for hearing

(4)Any person, by written notice served on the Superintendent within fifteen days after receiving a notice under subsection (3), may ask for a hearing before the Superintendent. 1994, c. 11, s. 234 (4); 1997, c. 28, s. 53.

Hearing

(5)The Superintendent, on being served with a request for a hearing shall hold the hearing without unreasonable delay. 1994, c. 11, s. 234 (5); 1997, c. 28, s. 53.

When order may be made

(6)If a hearing is not asked for within the time set out in subsection (4), or if a hearing is held and the Superintendent is of the opinion that an order described in subsection (2) should be made, the Superintendent may make an order to take effect immediately or at such later date as is set out in the order. 1994, c. 11, s. 234 (6); 1997, c. 28, s. 53.

Modifying order

(7)The Superintendent, after giving every person asking for a hearing an opportunity to be heard, may make the intended order or an amended version of the order. 1994, c. 11, s. 234 (7); 1997, c. 28, s. 53.

Order may be without a hearing

235.(1)The Superintendent may make an order under section 234 without first giving notice and holding a hearing if he or she is of the opinion that the interests of the members, depositors or shareholders of the credit union may be prejudiced or adversely affected by a delay in issuing an order. 1994, c. 11, s. 235 (1); 1997, c. 28, s. 53.

Effective date

(2)An order made under subsection (1) comes into effect when it is made. 1994, c. 11, s. 235 (2).

Request for hearing

(3)Any person, by written notice served on the Superintendent within fifteen days after receiving an order under subsection (1), may ask for a hearing before the Superintendent. 1994, c. 11, s. 235 (3); 1997, c. 28, s. 53.

Deferring order

(4)If a hearing is requested, the Superintendent may defer compliance with the order until the hearing is concluded or any appeal from the hearing is concluded and the order is confirmed, varied or revoked. 1994, c. 11, s. 235 (4); 1997, c. 28, s. 53.

Modifying order

(5)The Superintendent, after giving the person asking for a hearing an opportunity to be heard, may modify, revoke or confirm the order. 1994, c. 11, s. 235 (5); 1997, c. 28, s. 53.

Distribution of order

(6)A copy of an order made under this section or section 234 shall be sent to each director of the affected credit union, to the deposit insurer and to the stabilization authority for the credit union. 1994, c. 11, s. 235 (6).

Appeal

236.(1)A party to a hearing under section 234 or 235 may appeal the Superintendent’s order to the Tribunal within 15 days after receiving the order.

Notice of appeal

(2)The appellant shall have a written notice of appeal served on the Superintendent and filed with the Tribunal. 1997, c. 28, s. 57 (1).

Evidence

(3)An appeal shall be based on the evidence presented to the Tribunal. 1994, c. 11, s. 236 (3); 1997, c. 28, s. 57 (2).

Result

(4)The Tribunal, after hearing the appeal, may confirm, vary or revoke the order. 1994, c. 11, s. 236 (4); 1997, c. 28, s. 57 (2).

Superintendent represented

(5)The Superintendent is entitled to attend and to be represented by counsel at a hearing before the Tribunal. 1997, c. 28, s. 57 (3).

Appeal to court

(6)An appeal lies to court from an order made under subsection (4). 1994, c. 11, s. 236 (6).

Disposal of unauthorized investments

237.(1)The Superintendent may order a credit union to dispose of and realize any of its investments not made or held in accordance with this Act, the regulations or its by-laws. 1994, c. 11, s. 237 (1); 1997, c. 28, s. 53.

Time limit

(2)The credit union shall, within sixty days after receiving an order under subsection (1) or within such other time as determined by the Superintendent, absolutely dispose of and realize the investments. 1994, c. 11, s. 237 (2); 1997, c. 28, s. 53.

Directors’ liability

(3)Subject to subsection (6), if the amount realized from the disposal of the investments falls below the amount paid by the credit union for them, the directors of the credit union are jointly and severally liable for the payment to the credit union of any deficiency. 1994, c. 11, s. 237 (3).

Objector

(4)A director who is present at the meeting at which an investment to which the director objects is authorized may,

(a) forthwith, deliver or send to the credit union by registered mail a protest against the investment; and

(b) within thirty days after delivering or sending the protest as set out in clause (a), send a copy of the protest by registered mail to the Superintendent. 1994, c. 11, s. 237 (4); 1997, c. 28, s. 53.

Same

(5)A director who is absent from a meeting at which an investment to which the director objects is authorized may,

(a) within fourteen days after he or she becomes aware of the investment and is able to do so, deliver or send to the credit union by registered mail a protest against the investment; and

(b) within thirty days after delivering or sending the protest as set out in clause (a), send a copy of the protest by registered mail to the Superintendent. 1994, c. 11, s. 237 (5); 1997, c. 28, s. 53.

Exoneration

(6)A director who takes the steps set out in subsection (4) or (5) has no liability with respect to an investment to which he or she objected. 1994, c. 11, s. 237 (6).

Call of unauthorized loans

238.(1)The Superintendent may order a credit union to call any loan it has made that is not authorized by this Act, the regulations or its by-laws. 1994, c. 11, s. 238 (1); 1997, c. 28, s. 53.

Same

(2)The credit union shall, within sixty days after receiving an order under subsection (1) or within such other time as determined by the Superintendent, call the loan, if possible. 1994, c. 11, s. 238 (2); 1997, c. 28, s. 53.

Liability

(3)If, within that time set out in subsection (2), the full amount of the loan is not repaid, the members of the credit committee, the persons appointed under section 122 and the persons authorized under section 123 are jointly and severally liable for the payment to the credit union of any deficiency upon the maturity of the loan. 1994, c. 11, s. 238 (3).

Objector

(4)A member of the credit committee who is present at the meeting at which a loan to which the member objects is authorized may,

(a) forthwith, deliver or send to the credit union by registered mail a protest against the loan; and

(b) within thirty days after delivering or sending the protest as set out in clause (a), send a copy of the protest by registered mail to the Superintendent. 1994, c. 11, s. 238 (4); 1997, c. 28, s. 53.

Same

(5)A member of the credit committee who is absent from a meeting at which a loan to which the member objects is authorized may,

(a) within fourteen days after he or she becomes aware of the loan and is able to do so, deliver or send to the credit union by registered mail a protest against the loan; and

(b) within thirty days after delivering or sending the protest as set out in clause (a), send a copy of the protest by registered mail to the Superintendent. 1994, c. 11, s. 238 (5); 1997, c. 28, s. 53.

Exoneration

(6)A member who takes the steps set out in subsection (4) or (5) has no liability with respect to a loan to which he or she objected. 1994, c. 11, s. 238 (6).

More than fair value

239.If it appears to the Superintendent from an examination of the condition and affairs of a credit union that the assets are shown on the annual return mentioned in section 226 at an amount greater than the fair value, the Superintendent may require the credit union to set aside, out of earnings, such additional provisions as he or she considers necessary. 1994, c. 11, s. 239; 1997, c. 28, s. 53.

Suspension of business

240.(1)The Superintendent may order a credit union to discontinue doing business for such time as he or she determines if, after an inspection, the Superintendent is satisfied that the continuance in business of the credit union is not in the interest of members, depositors or shareholders. 1994, c. 11, s. 240 (1); 1997, c. 28, s. 53.

Report

(2)The Superintendent shall report forthwith to the deposit insurer and stabilization authority for the credit union when an order is made under subsection (1) and the reasons for the order. 1994, c. 11, s. 240 (2); 1997, c. 28, s. 53.

PART XIII
LEAGUES

Incorporating leagues

241.(1)Ten or more credit unions may be incorporated as a league.

Objects

(2)The objects of a league are to,

(a) provide services primarily to members;

(b) provide and manage a liquidity system for credit unions; and

(c) manage those investments that are held by the league for its members.

Services

(3)Subject to section 173, for the purpose of clause (2) (a), leagues may,

(a) accept deposits and make loans;

(b) guarantee loans;

(c) provide educational, technical, promotional, management, administrative and advisory services to credit unions; and

(d) provide such other services as may be prescribed.

Same

(4)A league may provide services and a liquidity system to any credit union whether it is a member of the league or not.

General business

(5)Leagues may carry on business, consistent with their objects, through prescribed subsidiaries.

Subsidiaries

(6)A league’s subsidiaries may, if permitted by the league’s by-laws, provide services to the general public. 1994, c. 11, s. 241.

Passing of by-laws

242. (1) A by-law of a league is not effective until it is,

(a) passed by the board of directors of the league;

(b) confirmed, with or without variation, by a special resolution passed at a general meeting of the members of the league duly called for that purpose, or by such greater proportion of the votes as the articles provide; and

(c) approved by the Superintendent. 1994, c. 11, s. 242 (1); 1997, c. 28, s. 53; 2002, c. 18, Sched. H, s. 3 (8).

Approval by Superintendent

(2) Any amendment required by the Superintendent as a condition of approval may be made by the board of directors unless the amendment alters the intent of the by-law. 1994, c. 11, s. 242 (2); 1997, c. 28, s. 53.

Application of Act

243.(1)This Act, with necessary modification, applies to leagues and their incorporation if consistent with this Part.

Exclusion

(2)The Lieutenant Governor in Council may, by regulation, exempt leagues from any provision of this Act. 1994, c. 11, s. 243.

Application of Federal Act

244.A league may accept and exercise its rights, powers, privileges and immunities under the Cooperative Credit Associations Act (Canada) only to the extent that they are not prohibited or restricted by this Act or the regulations. 1994, c. 11, s. 244.

Members

245.Subject to the prescribed terms, credit unions and other prescribed entities may be members of a league. 1994, c. 11, s. 245.

Admission to membership

246.A credit union may become a member of a league by a resolution passed by a majority of the votes cast at a general meeting of the members of the credit union called for the purpose. 1994, c. 11, s. 246.

Member withdrawal

247.(1)Any credit union that is a member of a league may withdraw from membership if the withdrawal is authorized by a resolution passed by a majority of the votes cast at a general meeting of the credit union’s members called for the purpose.

Notice of intent

(2)The credit union shall give notice to the league’s board of directors of the meeting at which the resolution is to be voted upon.

League representation

(3)The league is entitled to make representations to the members at the general meeting. 1994, c. 11, s. 247.

Directors

248.(1)The following individuals are disqualified from being directors of a league:

1. A person who is disqualified under this Act from being a director of a credit union.

2. An officer, director, employee or member of a credit union referred to in subsection (2).

Same

(2)The credit union,

(a) has liabilities that exceed its assets;

(b) is not meeting prescribed capital adequacy and liquidity requirements and an application for a variation from its capital adequacy and liquidity requirements has been denied;

(c) is under the administration of the deposit insurer; or

(d) is under the supervision of the stabilization authority for the credit union.

Same

(3)A person is not disqualified from being a director of a league merely because the person is an employee of or is a related person of an employee of a credit union. 1994, c. 11, s. 248.

PART XIV
DEPOSIT INSURANCE CORPORATION OF ONTARIO

Corporation continued

249.(1)The corporation known in English as the Ontario Share and Deposit Insurance Corporation and in French as Société ontarienne d’assurance des actions et dépôts is continued as a corporation without share capital under the name, in English, of the Deposit Insurance Corporation of Ontario and, in French, Société ontarienne d’assurance-dépôts.

Application

(2)The Corporations Act does not apply to the Corporation.

Corporation members

(3)A credit union, on incorporation in Ontario, becomes a member of the Corporation. 1994, c. 11, s. 249.

Board of directors

250.(1)The board of directors of the Corporation consisting of not more than eleven persons shall be appointed by the Lieutenant Governor in Council.

Same

(2)The board must include,

(a) at least one but not more than six persons who are not directly associated with the Ontario credit union system; and

(b) at least four persons from those nominated by leagues and unaffiliated credit unions.

Chair

(3)The Lieutenant Governor in Council shall appoint a person to be the chair.

Same

(4)The board of directors may appoint a director as vice-chair. 1994, c. 11, s. 250.

Term of office

251.(1)The members of the board of directors shall hold office for such term as the Lieutenant Governor in Council considers appropriate.

Removing director

(2)The Lieutenant Governor in Council may remove any person from the board at any time. 1994, c. 11, s. 251.

Duties of board

252.(1)The board of directors of the Corporation shall manage or supervise the management of the affairs of the Corporation and shall perform additional duties as may be imposed under this Act, the regulations or the by-laws.

Chair to preside

(2)The chair shall preside at all meetings of the Corporation but, if at any meeting the chair is absent, the vice-chair shall preside, and if neither the chair or vice-chair is present, one of the directors present at the meeting who is chosen so to act by the directors present shall preside and has and shall exercise the powers of the chair.

Secretary and treasurer

(3)The board of directors may appoint a secretary and a treasurer.

Quorum

(4)A majority of the members of the board of directors constitutes a quorum.

Travelling expenses

(5)A member of the board of directors shall be paid by the Corporation out of its income all reasonable travelling and living expenses incurred by the member while absent from his or her ordinary place of residence in the course of his or her duties as a director.

Remuneration

(6)A member of the board of directors may be paid by the Corporation out of its income as remuneration for his or her services and duties such daily or other amount as may be fixed by the board and reported to its members in its annual report.

Same

(7)The board shall report its total expenses and total remuneration for the year in the annual report. 1994, c. 11, s. 252.

No liability for acts in good faith 

253.(1)No action or other proceeding for damages shall be instituted against the Corporation, or anyone acting under the authority of the Corporation, for any act done in good faith in the execution or intended execution of a duty of the Corporation or for any neglect or default in the execution, in good faith, of that duty.

Obligation remains

(2)Subsection (1) does not apply to relieve the Corporation from the obligation to make payment in respect of a deposit insured under this Act. 1994, c. 11, s. 253.

Keeping books

254.The Corporation shall,

(a) keep books of account in a form and manner that facilitates the preparation of its financial statements and other financial reports in accordance with generally accepted accounting principles; and

(b) prepare its annual financial statements in accordance with generally accepted accounting principles and the regulations. 1994, c. 11, s. 254.

Auditor

255.The Corporation shall appoint an auditor annually. 1994, c. 11, s. 255.

Annual report

256.(1)The Corporation shall, within four months after the end of each financial year, send to its members, the Minister and the Superintendent an annual report on its activities in that year. 1994, c. 11, s. 256 (1); 1997, c. 28, s. 53.

What included

(2)The annual report shall include financial statements of the Corporation in the form approved by the Superintendent, the auditor’s report on those statements and such other matters as are prescribed. 1994, c. 11, s. 256 (2); 1997, c. 19, s. 5 (4); 1999, c. 12, Sched. I, s. 2 (7).

Annual examination of Superintendent

257.(1)The Superintendent shall annually examine the affairs of the Corporation and report the results to the Minister. 1994, c. 11, s. 257 (1).

Same

(2)For purposes of subsection (1), the Superintendent may ask an auditor or the Auditor General to perform the examination or the Superintendent may accept the report of the Corporation’s auditor. 1994, c. 11, s. 257 (2); 2004, c. 17, s. 32.

Furnish information

258.The Corporation shall provide the Superintendent with such information, at such times and in such form as the Superintendent may require. 1994, c. 11, s. 258.

Tabling reports

259.The Minister shall lay the annual report of the Corporation and of the Superintendent before the Legislative Assembly if it is in session or, if not, at the next session. 1994, c. 11, s. 259.

Information to Minister

260.(1)The Minister may ask the Corporation to furnish any information related to its affairs.

Same

(2)The Corporation shall provide the Minister with the information requested. 1994, c. 11, s. 260.

Objects

261. The objects of the Corporation are to,

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

(b) act as a stabilization authority and to monitor the activities of any other entity that is designated as a stabilization authority;

(c) designate a body corporate as a stabilization authority;

(d) promote standards of sound business and financial practices for member credit unions;

(e) provide, in its discretion, financial assistance for the purpose of assisting a credit union under administration in its continued operation or in the orderly liquidation of its operations;

(f) collect and accumulate statistics and other information related to credit unions as may be necessary for the purposes of,

(i) insurance,

(ii) leagues,

(iii) credit unions,

(iv) stabilization authorities, and

(v) the Ministry of Finance;

(g) publish system statistics as may be appropriate;

(h) perform all duties delegated to it by the Minister;

(i) adopt measures designed to minimize the risk and size of deposit insurance claims;

(j) act as an administrator of a credit union; and

(k) provide services that the Corporation is authorized to provide by the regulations made under paragraph 30 of subsection 317 (1). 1994, c. 11, s. 261; 2002, c. 18, Sched. H, s. 3 (9).

Ancillary powers

262.(1)The Corporation may do all things necessary or incidental to its objects and in particular, but without limiting the generality of the foregoing, the Corporation may, in furtherance of its objects,

(a) establish and maintain the Deposit Insurance Reserve Fund to provide for,

(i) the payment of deposit insurance claims,

(ii) the continuance or orderly liquidation of any credit union in financial difficulty,

(iii) financial assistance to credit unions, and

(iv) the payment of a stabilization authority’s administrative costs;

(b) conditionally or unconditionally, grant financial assistance to credit unions under administration or stabilization authorities in the manner it thinks fit;

(c) make an advance or grant for the purpose of paying lawful claims against a credit union in respect of any claims of its members for withdrawal of deposits;

(d) act as the liquidator of a credit union;

(e) assume the costs of winding up of credit unions;

(f) guarantee the payment of the fees of, and the costs incurred by, any person as the liquidator or receiver of a member credit union when that person is appointed;

(g) acquire assets or assume the liabilities of credit unions;

(h) enter into agreements with a stabilization authority;

(i) with the approval of the Minister, require the payment of levies by credit unions for the purpose of establishing and maintaining the assets of the Corporation;

(j) accept powers conferred on it under the Canada Deposit Insurance Corporation Act;

(k) make or cause to be made such inspections or examinations of credit unions as may be authorized under this Act, the by-laws of the Corporation or a policy of deposit insurance;

(l) with the approval of the Minister, borrow money,

(i) on the credit of the Corporation,

(ii) on bills of exchange or promissory notes drawn, made, accepted or endorsed by or on behalf of the Corporation, or

(iii) by the issue of debentures;

(m) acquire, hold, improve and alienate real and personal property;

(n) declare and pay premium rebates to its members;

(o) act as the administrator of any credit union;

(p) appoint an agent;

(q) insure any liability of the Deposit Insurance Reserve Fund with one or more insurers;

(r) advise the Superintendent of any adverse implications of proposed new charters;

(s) do all such other things, not contrary to this Act, as may be necessary for the exercising of any of the powers of the Corporation;

(t) provide funding for a stabilization authority’s administrative costs; and

(u) provide the Superintendent with such information, at such times and in such form as the Superintendent may require. 1994, c. 11, s. 262 (1); 1997, c. 28, s. 53.

Same

(2)Without limiting the generality of clause (1) (b), the Corporation may grant financial assistance to a credit union by,

(a) purchasing securities of the credit union;

(b) making or guaranteeing loans, with or without security, or advances to or deposits with a credit union; and

(c) taking security for loans or advances to a credit union.

Subrogation

(3)If the Corporation makes an advance under clause (1) (c), it is subrogated as an unsecured creditor for the amount of the advance.

Membership

(4)If the Corporation holds membership shares of a credit union, the Corporation is a member of the credit union and has the rights and benefits of a member.

Payment under guarantee

(5)For the purposes of clause (1) (f), the Corporation may charge any amount paid under a guarantee to the Deposit Insurance Reserve Fund of the Corporation.

Pledging assets

(6)For the purposes of clause (1) (l), the Corporation may pledge as security all or any part of its assets. 1994, c. 11, s. 262 (2-6).

Subsidiaries

263.The Corporation may, with the approval of the Minister, establish and acquire subsidiaries. 1994, c. 11, s. 263.

Powers and Duties of Corporation

By-laws

264.Subject to the approval of the Lieutenant Governor in Council, the Corporation may make by-laws,

(a) for the administration, management and control of the property and affairs of the Corporation;

(b) setting out the functions, duties and remuneration of all officers, agents and employees of the Corporation;

(c) for the appointment or disposition of any special committees from time to time created by the Corporation;

(d) governing the appointment of an auditor;

(e) adopting the seal of the Corporation;

(f) governing the time and place for the holding of meetings of the board of directors and the procedure in all things at such meetings;

(g) prescribing standards of sound business and financial practices for credit unions;

(h) prescribing the manner in which a credit union may represent that it is a member of the Corporation;

(i) defining the expression “deposit” for the purpose of deposit insurance;

(j) authorizing, controlling and requiring the use by credit unions of marks, signs, advertisements or other devices indicating that deposits with credit unions are insured by the Corporation;

(k) governing the conduct, in all particulars, of the affairs of the Corporation;

(l) governing the declaration and payment of premium rebates; and

(m) governing the operations of stabilization authorities. 1994, c. 11, s. 264.

Powers of investigation

265.(1)For the purposes of carrying out an investigation, examination or inquiry authorized by this Part, the Corporation or the stabilization authority for the credit union may, in writing, appoint any person to carry out an investigation, examination or inquiry of a particular credit union.

Same

(2)The person appointed is entitled to access to the books, records and documents of the credit union and has the powers of a commission under Part II of the Public Inquiries Act, which Part applies to the investigation or inquiry as if it were an inquiry under that Act. 1994, c. 11, s. 265.

Prohibition as to holding out insured

266.(1)No person, other than a credit union that is a member of the Corporation, shall, by written or oral representations, advertise or hold out any corporation, society or association as being insured or approved for deposit insurance by the Corporation.

Same

(2)A league may, by written or oral representations, advertise or hold out its members as being insured or approved for deposit insurance by the Corporation if they are members of the Corporation.

Same

(3)Any person who contravenes subsection (1) is guilty of an offence. 1994, c. 11, s. 266.

Advertising

267.(1)Subject to subsection (3), no credit union shall advertise or hold out, by written or oral representations, that it is insured by the Corporation.

Same

(2)Subject to subsection (3), no league shall advertise or hold out, by written or oral representations, that its members are insured by the Corporation.

Same

(3)Subsection (1) does not apply to prohibit advertising or holding out if it is done by marks, signs, advertisements or other devices authorized by the by-laws of the Corporation and used in the manner and on the occasions set out by the by-laws.

Offence

(4)A credit union that contravenes subsection (1) is guilty of an offence. 1994, c. 11, s. 267.

Fiscal year

268.The fiscal year end of the Corporation is the 31st day of December in each year. 1994, c. 11, s. 268.

Investment of funds

269.The Corporation may, in its discretion, invest any funds not required in carrying out its objectives in such investments as are prescribed and subject to such restrictions as are prescribed. 1994, c. 11, s. 269.

Duty to insure

270.(1)The Corporation shall insure each deposit with a credit union except,

(a) a deposit that is not payable in Canada or not in Canadian currency; or

(b) the amount of any one deposit that exceeds a prescribed amount. 1994, c. 11, s. 270 (1).

Payment of insured amount

(2)The Corporation has an obligation to make payment in respect of any deposit insured by deposit insurance if,

(a) the members of a credit union that holds the deposit pass a resolution for the voluntary dissolution of the credit union and, by reason of the resolution, the credit union is unable to pay its depositors;

(b) the Superintendent or a court orders the dissolution of the credit union holding the deposit;

(c) the Corporation is satisfied that the credit union will be unable to make payment in full, without delay, in respect of any deposits insured by deposit insurance;

(d) the policy of deposit insurance of the credit union that holds the deposit is cancelled; or

(e) the administrator orders that the credit union be wound up under subparagraph iii of paragraph 6 of subsection 295 (1). 1994, c. 11, s. 270 (2); 1997, c. 28, s. 53.

Same

(3)The Corporation, if it is obliged to make payment in respect of any deposit insured by deposit insurance, shall make payment to the person who appears entitled to the payment by the records of the credit union.

Same

(4)The Corporation may,

(a) enter into a deposit administration agreement with another credit union whereby that credit union agrees to pay on behalf of the Corporation,

(i) the amount of the deposit according to the terms of the deposit, or

(ii) before maturity of the deposit, an amount equal to the principal of and accrued interest on the deposit on the day it is paid;

(b) pay, before maturity of the deposit, an amount equal to the principal of and accrued interest on the deposit on the day it is paid.

Same

(5)In addition to the amount of the deposit insured by it, the Corporation shall pay interest at the rate established by its by-laws subject to any conditions that are prescribed.

Same

(6)Interest payable under subsection (5) is subject to such maximum amount as may be prescribed.

Discharge of liability

(7)Payment, under this section, by the Corporation in respect of any deposit insured by deposit insurance discharges the Corporation from all liability in respect of that deposit, and in no case is the Corporation under any obligation to see to the proper application of the payment made.

Subrogation

(8)If the Corporation makes a payment under this section in respect of any deposit with a credit union, the Corporation is subrogated to the extent of the payment made to all the rights and interest of the depositor as against that credit union.

Assignment

(9)If the Corporation considers it advisable, it may withhold payment in respect of any deposit with a credit union until it has received a written assignment of all the rights and interests of the depositor against that credit union. 1994, c. 11, s. 270 (3-9).

Deposits with credit unions

271.(1)This section applies to the deposits of a person who has deposits with two or more credit unions that amalgamate and continue in operation as one credit union.

Remain separate

(2)A deposit with an amalgamating credit union on the day on which the amalgamated credit union is formed, less any withdrawals from the deposit, is, for the purpose of deposit insurance with the Corporation, separate from a deposit of the same person on that day with another amalgamating credit union that became part of the amalgamated credit union.

Deposits with amalgamated credit union

(3)A deposit made by a person referred to in subsection (2) with an amalgamated credit union after the day on which the amalgamated credit union is formed is insured by the Corporation only to the extent that the aggregate of that person’s deposits with the amalgamated credit union, exclusive of the deposit in respect of which the calculation is made, is less than a prescribed amount.

If undertaking acquired

(4)For the purpose of deposit insurance with the Corporation, if one credit union acquires the undertaking and assets of another credit union, those credit unions are considered to be amalgamating credit unions. 1994, c. 11, s. 271.

Preparatory examination

272.(1)The Corporation may examine the books, records and accounts of the credit union if the Corporation believes that a payment under this Act in respect of a deposit held by a credit union is imminent and that it is in the best interest of both the depositors with the credit union and the Corporation to make early preparations for the payment.

Same

(2)The examination may be made by a person designated by the Corporation.

Same

(3)For the purposes of the examination, the Corporation and any person designated by it are entitled to access to the credit union’s books, records and accounts and may require the directors, officers, auditors of, and any receiver or liquidator of the credit union to furnish information and explanations regarding the books and accounts of the credit union. 1994, c. 11, s. 272.

Insuring credit unions

273.(1)No credit union that is carrying on business in Ontario shall accept deposits unless it is insured by the Corporation in accordance with this Act, the regulations and the by-laws of the Corporation.

Same

(2)The deposits with a credit union carrying on business in Ontario are insured by the Corporation in accordance with this Act and the by-laws of the Corporation from the day the credit union starts business. 1994, c. 11, s. 273 (1, 2).

Certificate

(3)The Corporation shall issue to every credit union that is insured with it a certificate of deposit insurance in the form approved by the Superintendent. 1994, c. 11, s. 273 (3); 1997, c. 19, s. 5 (4); 1999, c. 12, Sched. I, s. 2 (7).

Deposit insurance certificate

(4)A certificate of deposit insurance issued under subsection (3) expires one year after it is issued but may be renewed annually subject to such conditions as the Corporation considers necessary. 1994, c. 11, s. 273 (4).

Cancellation of deposit insurance

274.(1)The deposit insurance of a credit union may be cancelled on not less than thirty days notice to the credit union by the Corporation when,

(a) the credit union is in breach of the standards of business and financial practices prescribed by the Corporation or any conditions of a policy of deposit insurance issued to it;

(b) the credit union ceases to accept deposits;

(c) an order has been made appointing the Corporation or another person as the liquidator of the credit union; or

(d) the credit union fails to pay its deposit insurance premiums.

Effect of cancellation

(2)If the deposit insurance of a credit union is cancelled by the Corporation, the deposits with the credit union on the day the cancellation takes effect, less any withdrawals from those deposits, continue to be insured for a period of two years or, in the case of a term deposit with a remaining term exceeding two years, to the maturity of that term.

Notification to depositors

(3)If the deposit insurance of a credit union has been cancelled, the credit union shall notify its depositors of that fact and shall stop accepting deposits from the date of cancellation.

Public notice

(4)The Corporation may, in the manner it considers expedient, give public notice of the cancellation of deposit insurance of a credit union if, in the opinion of the Corporation, the public interest requires that notice be given. 1994, c. 11, s. 274 (1-4).

Notice to Superintendent

(5)The Corporation shall give the Superintendent, the league for the credit union and the stabilization authority for the credit union written notice of every deposit insurance cancellation. 1994, c. 11, s. 274 (5); 1997, c. 28, s. 53.

Stabilization Fund and Annual Premium

Stabilization fund

275.(1)Every league or association of credit unions designated as a stabilization authority may establish and maintain a stabilization fund for the benefit of member credit unions.

Assessment for the fund

(2)For the purpose of establishing and maintaining the funds, a stabilization authority may, subject to the prescribed conditions, assess member credit unions in the amounts and at the times and frequency set out in the stabilization authority’s by-laws. 1994, c. 11, s. 275 (1, 2).

By-laws approved

(3)By-laws to which this section applies are subject to the approval of the Superintendent. 1994, c. 11, s. 275 (3); 1997, c. 28, s. 53.

Transition

(4)Stabilization funds established under a predecessor of this Act will be maintained as prescribed. 1994, c. 11, s. 275 (4).

Deposit Insurance Reserve Fund

276.(1)The Corporation shall maintain a fund, called the Deposit Insurance Reserve Fund, and shall credit to it all premiums received by the Corporation. 1994, c. 11, s. 276 (1).

Annual premiums

(2) The Corporation shall, within 120 days after the start of each fiscal year of a credit union, establish for, assess and collect from the credit union an annual premium, under prescribed conditions, to meet its administrative costs, insurance funding and the administrative costs of stabilization authorities. 2001, c. 8, s. 30.

Same

(3)The Corporation has the power to assess, accumulate, manage, invest, disburse and pay out of the Deposit Insurance Reserve Fund any money needed to meet claims of depositors of credit unions that have received and maintained insurance standing. 1994, c. 11, s. 276 (3).

Same

(4)A regulation prescribing an annual premium may,

(a) prescribe different annual premiums for different credit unions or classes of credit unions; and

(b) make the annual premium subject to prescribed conditions. 1994, c. 11, s. 276 (4).

Limitation

(5)For the purposes of clause (4) (a), prescribed classes of credit unions shall be based in part on measurable criteria which relate to the risk posed by the credit union and may be based in part on other factors so long as they are not based on membership in a league or stabilization authority. 1994, c. 11, s. 276 (5).

Overdue charges

277.The Corporation may charge interest at a rate equal to the rate prescribed under subsection 161 (1) of the Income Tax Act (Canada) plus 2 per cent on the unpaid amount of any premium instalment that is not paid on or before the due date of that instalment. 1994, c. 11, s. 277.

Repayments

278.The Corporation may, upon such conditions as it may direct, remit or defer the collection of all or part of an annual premium assessed by the Corporation. 1994, c. 11, s. 278.

Annual examination of credit unions

279.(1)For the purposes of the Corporation, the affairs of each credit union shall be examined by a person provided for under this section at least once in each year. 1994, c. 11, s. 279 (1).

Copy of examination report

(2)A copy of the report of the examination shall be forthwith transmitted to the Corporation, the stabilization authority for the credit union and the Superintendent. 1994, c. 11, s. 279 (2); 1997, c. 28, s. 53.

Examination to be made

(3)The annual examination shall be made,

(a) if the credit union is a member of a league, by the league;

(b) if the credit union is not a member of a league, by the Superintendent; or

(c) if requested by the Corporation, by the stabilization authority for the credit union or by the Superintendent. 1994, c. 11, s. 279 (3); 1997, c. 28, s. 53.

Cost

(4)The Corporation is responsible for the cost of examinations.

Alternative

(5)The Corporation may, in the place of an examination made under subsection (3), accept the report of the annual examination of the auditor of the credit union. 1994, c. 11, s. 279 (4, 5).

Examination of leagues

280.The Superintendent shall make an annual examination of each league at the expense of the Corporation, and shall give a copy of his or her report to the Corporation. 1994, c. 11, s. 280; 1997, c. 28, s. 53.

Contents of examiner’s report

281.(1)The person examining the affairs of a credit union under section 279 or 280 shall state, in the report, whether or not, in the person’s opinion, there has been any change in the circumstances of the credit union that might materially affect the financial position of the credit union and particularly, without limiting the generality of the foregoing, whether or not, in the person’s opinion,

(a) the assessment return made by the Corporation and on which payment to the Corporation was based is fairly stated;

(b) the operations of the credit union are being conducted in accordance with sound business and financial practices; and

(c) the credit union is in a satisfactory financial condition.

Same

(2)Each report shall,

(a) state whether or not, in the opinion of the examiner there has been any contravention of this Act or the regulations; and

(b) be served on the credit union.

Exception

(3)Despite subsections (1) and (2), the Corporation may require a report limited to matters identified by the Corporation. 1994, c. 11, s. 281.

Stabilization Authorities

Stabilization authority for credit unions

282.(1)The Corporation is the stabilization authority for all credit unions governed by this Act except those for which a stabilization authority is designated.

Application for designation

(2)A league or association of credit unions may apply to the Corporation to be designated a stabilization authority for the benefit of its members.

Same

(3)The form and content of the application shall be as provided by the Corporation. 1994, c. 11, s. 282.

Designation

283.(1)The Corporation may designate, in writing, a league or an association of credit unions as a stabilization authority on such conditions as the Corporation considers appropriate.

Scope of designation

(2)The designation of a league or association of credit unions as a stabilization authority shall,

(a) identify the credit unions that may be supervised by the stabilization authority; and

(b) specify the limitations, if any, on the powers of the stabilization authority.

Reasons

(3)If the Corporation refuses to designate a league or an association of credit unions as a stabilization authority and a league or association of credit unions affected by the decision asks for the reasons, the Corporation shall provide written reasons for its decision. 1994, c. 11, s. 283 (1-3).

Appeal

(4)A league or association of credit unions may, within fifteen days after receiving the Corporation’s reasons, appeal to the Tribunal,

(a) the Corporation’s decision not to designate it; or

(b) any limitations on their powers as a stabilization authority. 1994, c. 11, s. 283 (4); 1997, c. 28, s. 58 (1).

Notice of appeal

(4.1)The appellant shall have a written notice of appeal filed with the Tribunal. 1997, c. 28, s. 58 (2).

Same

(5)On an appeal, the Tribunal may affirm or reject the Corporation’s decision and may designate the league or association of credit unions as a stabilization authority. 1994, c. 11, s. 283 (5); 1997, c. 28, s. 58 (3).

Appeal final

(6)The Tribunal’s decision is final and shall not be stayed, varied or set aside by any court. 1994, c. 11, s. 283 (6); 1997, c. 28, s. 58 (4).

Duration of designation

284.A designation of a league or an association of credit unions as a stabilization authority remains in effect until it is revoked by the Corporation or by operation of law. 1994, c. 11, s. 284.

Supervision by stabilization authority

285.(1)If requested by a stabilization authority, the Superintendent shall order a credit union subject to the supervision of the stabilization authority. 1994, c. 11, s. 285 (1); 1997, c. 28, s. 53.

Same

(2)The Superintendent may order a credit union subject to the supervision of a stabilization authority named in the order in any of the following circumstances:

1. The credit union asks, in writing, that it be subject to supervision.

2. The credit union is not in compliance with prescribed capital or liquidity requirements.

3. The Superintendent has reasonable grounds for believing that the credit union is conducting its affairs in a way that, reasonably, might be expected to harm the interests of members or depositors or that tends to increase the risk of claims against the deposit insurer.

4. The credit union or an officer or director of it does not file, submit or deliver a report or document required to be filed, submitted or delivered under this Act within the time limited under this Act.

5. The credit union did not comply with a Superintendent’s order issued under Part XII.

6. The credit union is not complying with its own investment and lending policy. 1994, c. 11, s. 285 (2); 1997, c. 28, s. 53.

Interpretation

(3)For the purposes of paragraph 2 of subsection (2), a variation under section 86 does not make a credit union in compliance with prescribed capital and liquidity requirements. 1994, c. 11, s. 285 (3).

Release

(4)The credit union remains subject to supervision by a stabilization authority until,

(a) the credit union is being wound up or placed under administration; or

(b) the Superintendent orders that the credit union is released from supervision. 1994, c. 11, s. 285 (4); 1997, c. 28, s. 53.

Same

(5)The Superintendent may make an order under clause (4) (b) on the application of a stabilization authority, on the application of the credit union or on his or her own initiative if there are reasonable grounds for believing that the credit union is no longer in need of supervision. 1994, c. 11, s. 285 (5); 1997, c. 28, s. 53.

Appeal

286.(1)A credit union or the stabilization authority for the credit union may appeal the Superintendent’s order under section 285 to the Tribunal within 15 days after receiving the Superintendent’s order.

Notice of appeal

(2)The appellant shall have a written notice of appeal served on the Superintendent and filed with the Tribunal. 1997, c. 28, s. 59 (1).

Evidence

(3)An appeal shall be based on the evidence presented to the Tribunal. 1994, c. 11, s. 286 (3); 1997, c. 28, s. 59 (2).

Result

(4)The Tribunal, after hearing the appeal, may confirm, vary or revoke the order. 1994, c. 11, s. 286 (4); 1997, c. 28, s. 59 (2).

Notice to deposit insurer

(5)A copy of the Tribunal’s order shall be served on the Corporation. 1994, c. 11, s. 286 (5); 1997, c. 28, s. 59 (3).

Superintendent represented

(6)The Superintendent is entitled to attend and to be represented by counsel at a hearing before the Tribunal. 1997, c. 28, s. 59 (4).

Appeal to court

(7)An appeal lies to the court from an order made under subsection (4). 1994, c. 11, s. 286 (7).

Powers of stabilization authority

287.(1)A stabilization authority has the following powers:

1. To supervise a member credit union when asked by the credit union or pursuant to a supervision order issued by the Superintendent.

2. To establish and maintain a stabilization fund for the benefit of its members.

3. To make conditional loans or advances out of a stabilization fund to credit unions.

4. To inspect or examine credit unions when asked to by the Superintendent or the Corporation.

5. For purposes of the stabilization authority, to examine the affairs of its credit unions.

6. To accept and exercise powers delegated to it by the Corporation.

7. With the Corporation’s approval, to delegate any of its powers to agents.

8. To collect information from member credit unions for purposes of the stabilization authority.

9. To share information concerning a credit union under its authority with the deposit insurer, the Superintendent, the credit union’s auditor and the provider of data processing services to the credit union.

10. To incorporate a subsidiary to carry out its responsibilities as a stabilization authority. 1994, c. 11, s. 287 (1); 1997, c. 28, s. 53.

Same

(2)Without limiting the generality of paragraph 3 of subsection (1), the stabilization authority may grant financial assistance to a credit union,

(a) by purchasing securities of the credit union;

(b) by making or guaranteeing loans, with or without security or advances to or deposits with a credit union; and

(c) by taking security for loans or advances to a credit union.

Exception

(3)Paragraphs 2 and 3 of subsection (1) do not apply to the Corporation as a stabilization authority.

Subsidiary

(4)A subsidiary referred to in paragraph 10 of subsection (1) has all the powers set out in subsections (1) and (2) and in subsection 289 (1). 1994, c. 11, s. 287 (2-4).

Approval of by-laws

288. (1) No by-law of a stabilization authority or subsidiary of a stabilization authority is effective until it is,

(a) passed by the board of directors of the stabilization authority or subsidiary, as the case may be;

(b) confirmed, with or without variation, by a special resolution passed at a general meeting of the shareholders of the stabilization authority or subsidiary, as the case may be, duly called for that purpose, or by such greater proportion of the votes as the articles provide; and

(c) approved by the Superintendent. 1994, c. 11, s. 288 (1); 1997, c. 28, s. 53; 2002, c. 18, Sched. H, s. 3 (10).

Same

(2) For purposes of this section, the credit unions that come under the authority of a stabilization authority are considered to be shareholders of the subsidiary incorporated by the stabilization authority. 1994, c. 11, s. 288 (2).

Approval by Superintendent

(3) Any amendment required by the Superintendent as a condition of approval may be made by the board of directors of the subsidiary unless the amendment alters the intent of the by-law. 1994, c. 11, s. 288 (3); 1997, c. 28, s. 53.

Powers when credit union supervised

289.(1)If a credit union is subject to the supervision of a stabilization authority, the authority may,

(a) order the credit union to correct any practices that the authority feels are contributing to the problem or situation that caused the credit union to be ordered subject to its supervision;

(b) order the credit union and its directors, committee members, officers and employees to not exercise any powers of the credit union or of its directors, committee members, officers and employees;

(c) establish guidelines for the operation of the credit union;

(d) order the credit union not to declare or pay a dividend or to restrict the amount of a dividend to be paid to a rate or amount set by the authority;

(e) provide financial assistance for the purpose of assisting the credit union to continue its operations;

(f) attend meetings of the credit union’s board and its credit and audit committee; and

(g) propose by-laws for the credit union and amendments to its articles of incorporation.

Exception

(2)Clause (1) (e) does not apply to the Corporation acting as a stabilization authority.

Approval by stabilization authority

(3)Subject to subsection (4), no by-law, rule or resolution relating to the business, affairs or management of a credit union passed or made by the board during the time the credit union is under supervision is of any effect until approved in writing by the stabilization authority. 1994, c. 11, s. 289 (1-3).

Same

(4)A by-law that requires the approval of the Superintendent must be approved by the Superintendent. 1994, c. 11, s. 289 (4); 1997, c. 28, s. 53.

Enforcement

(5)If a credit union fails to comply with an order of a stabilization authority, the stabilization authority may apply to the court for an order directing compliance with its order or such other order as the court considers appropriate. 1994, c. 11, s. 289 (5).

Expenses of stabilization authority

290.(1)The expenses of and disbursements by the stabilization authority in supervising a credit union are payable out of the assets of the credit union under supervision.

Same

(2)The stabilization authority and the credit union under its supervision may enter into a contract for the recovery of any expenses incurred and disbursements paid by the stabilization authority in supervising the credit union. 1994, c. 11, s. 290.

No liability for acts in good faith

291.No action or other proceeding for damages shall be instituted against a stabilization authority or anyone acting under the authority of the stabilization authority, for any act done in good faith in the execution or intended execution of a duty of the stabilization authority or for any neglect or default in the execution, in good faith of that duty. 1994, c. 11, s. 291.

Revoking designation

292.(1)Subject to subsections (3) and (4), the Corporation may revoke a designation under any of the following circumstances:

1. The league is not in compliance with its capital and liquidity requirements.

2. The stabilization authority did not comply with a condition of its designation imposed by the Corporation.

3. Continued supervision by the stabilization authority is likely to increase the risk of claims against the Deposit Insurance Reserve Fund.

4. It is not in the interests of the credit unions under the authority of a stabilization authority, or their members, to remain under the authority of the stabilization authority.

5. The league or association of credit unions asks to have its designation as a stabilization authority revoked. 1994, c. 11, s. 292 (1).

Same

(2)A designation of a league or an association of credit unions is revoked upon any of the following occurring:

1. The league or association of credit unions resolves to wind up.

2. A court or the Superintendent orders the league to wind up. 1994, c. 11, s. 292 (2); 1997, c. 28, s. 53.

Notice

(3)The Corporation may revoke a designation after giving notice of its intention to the league or association of credit unions affected if the league or the association does not, within fifteen days after receiving the notice, ask for a hearing on the issue.

Hearing

(4)The Corporation may revoke a designation after a hearing on the issue. 1994, c. 11, s. 292 (3, 4).

Appeal

(5)If, after a hearing, the Corporation decides to revoke a designation, the league or the association of credit unions may appeal the decision to the Tribunal if the appeal is made within fifteen days after the league or association of credit unions receives the Corporation’s written decision and reasons. 1994, c. 11, s. 292 (5); 1997, c. 28, s. 60.

Same

(6)On an appeal of the Corporation’s decision, the Tribunal may affirm the Corporation’s decision or reject it and continue the designation of the league or association of credit unions as a stabilization authority. 1994, c. 11, s. 292 (6); 1997, c. 28, s. 61.

Appeal final

(7)The Tribunal’s decision is final and shall not be stayed, varied or set aside by a court. 1994, c. 11, s. 292 (7); 1997, c. 28, s. 61.

When designation revoked

293.Upon its designation as a stabilization authority being revoked, a league or an association of credit unions shall,

(a) repay any unused balance of money advanced to it by the Corporation;

(b) deliver to the Superintendent and the Corporation a proper accounting for all advances made to it by the Corporation since the filing of its last annual report;

(c) deliver to the Superintendent and the Corporation a final report on its activities since the filing of its last annual report; and

(d) return any money in its stabilization fund to the credit unions under its authority on the same basis as the money to maintain the fund was assessed. 1994, c. 11, s. 293; 1997, c. 28, s. 53.

Administration

Administration by Corporation

294.(1)The Corporation may order a credit union subject to administration by the Corporation in any of the following circumstances:

1. The Corporation, on reasonable grounds, believes that the credit union is conducting its affairs in a way that might be expected to harm the interests of members, depositors or shareholders or that tends to increase the risk of claims against the deposit insurer, but that supervision by a stabilization authority would, in this case, not be appropriate.

2. The credit union has contravened an order of a stabilization authority.

3. The Corporation is of the opinion that the assets of the credit union are not sufficient to give adequate protection to its depositors.

4. The credit union has failed to pay any liability that is due or, in the opinion of the Corporation, will not be able to pay its liabilities as they become due.

5. The credit union’s stabilization authority makes a written request that the credit union be placed under administration.

6. The Corporation has received a report under subsection 240 (2).

Effective date

(2)An order under subsection (1) comes into effect when it is made. 1994, c. 11, s. 294 (1, 2).

Appeal to Tribunal

(3)The credit union or its stabilization authority may, within seven days after the effective date of the order, appeal the order to the Tribunal. 1994, c. 11, s. 294 (3); 1997, c. 28, s. 61.

Notice of appeal

(4)A written notice of appeal must be served on the Tribunal. 1994, c. 11, s. 294 (4); 1997, c. 28, s. 61.

Evidence

(5)An appeal must be based on the evidence presented to the Tribunal. 1994, c. 11, s. 294 (5); 1997, c. 28, s. 61.

Hearing

(6)The Tribunal shall hold a hearing within ten days after receiving the notice of appeal. 1994, c. 11, s. 294 (6); 1997, c. 28, s. 61.

Corporation represented

(7)The Corporation is entitled to attend and to be represented by counsel at a hearing before the Tribunal. 1994, c. 11, s. 294 (7); 1997, c. 28, s. 61.

Decision

(8)The Tribunal shall make a decision within seven days after hearing the appeal. 1994, c. 11, s. 294 (8); 1997, c. 28, s. 61.

Result

(9)The Tribunal, after hearing the appeal, may,

(a) confirm, vary or revoke the order; and

(b) order that the credit union be placed under the supervision of its stabilization authority. 1994, c. 11, s. 294 (9); 1997, c. 28, s. 61.

Revocation of order

(10)If the Tribunal revokes the order or orders the credit union to be placed under the supervision of its stabilization authority, the Corporation shall return control of the credit union’s property to it. 1994, c. 11, s. 294 (10); 1997, c. 28, s. 61.

Administrator’s powers

295.(1)As an administrator, the Corporation may exercise the following powers:

1. Carry on, manage and conduct the operations of a credit union.

2. Preserve, maintain, realize, dispose of and add to the property of a credit union.

3. Receive the income and revenues of the credit union.

4. Exercise the powers of the credit union and of the directors, officers, loan officers and credit committees.

5. Exclude the directors of the credit union and its officers, committee members, employees and agents from the property and business of the credit union.

6. Require the credit union to,

i. subject to section 310, amalgamate,

ii. dispose of its assets and liabilities, or

iii. be wound up.

Same

(2)In exercising its powers under paragraph 6 of subsection (1), the administrator does not require the consent of the members or shareholders of a credit union.

Same

(3)If the administrator causes a credit union to be wound up, the wind-up shall proceed as a voluntary wind-up under section 298.

Release from administration

(4)The Corporation may release a credit union from administration on such conditions as the Corporation may impose. 1994, c. 11, s. 295.

PART XV
DISSOLUTION, AMALGAMATION AND REORGANIZATION

Definition

296.In this Part,

“contributory” means a person who is liable to contribute to the property of a credit union in the event of the credit union being wound up under this Act. 1994, c. 11, s. 296.

Dissolution where no assets

297.(1)A credit union that has no assets and no liabilities may, if authorized by a special resolution of the members, apply to the Superintendent for an order dissolving the credit union. 1994, c. 11, s. 297 (1); 1997, c. 28, s. 53.

Same

(2)The Superintendent, if he or she receives an application under subsection (1) and is satisfied that a dissolution of the credit union is appropriate, may issue an order dissolving the credit union. 1994, c. 11, s. 297 (2); 1997, c. 28, s. 53.

Same

(3)A credit union in respect of which an order is issued under subsection (2) ceases to exist on the day stated in the order. 1994, c. 11, s. 297 (3).

Voluntary winding up

298.(1)If the voluntary liquidation and dissolution of a credit union is proposed, the credit union may apply to the Superintendent for an order dissolving the credit union. 1994, c. 11, s. 298 (1); 1997, c. 28, s. 53.

Special resolution

(2)An application under subsection (1) must be authorized by special resolution of the members or, if the credit union has issued two or more classes of shares, a special resolution of each class of shareholder.

Appointment of liquidator

(3)At the meeting passing the special resolution, the members must appoint one or more persons as liquidator of the estate and effects of the credit union for the purpose of winding up its affairs and distributing its property.

Same

(4)The persons appointed as liquidator may be directors, officers or employees of the credit union, a league, the stabilization authority for the credit union or the Corporation.

Remuneration

(5)The resolution or a resolution at a subsequent general meeting may fix the remuneration of the liquidator and the costs, charges and expenses of the winding-up. 1994, c. 11, s. 298 (2-5).

Publication of notice of winding-up

(6)A liquidator must,

(a) file a copy of the resolution with the Superintendent within ten days after it has been passed; and

(b) publish a notice of the resolution in,

(i) The Ontario Gazette within twenty days after it has been passed, and

(ii) a newspaper having a general circulation in the locality in which the head office of the credit union is situate. 1994, c. 11, s. 298 (6); 1997, c. 28, s. 53.

Vacancy in office of liquidator

(7)If, in a voluntary winding-up, a vacancy occurs in the office of liquidator by death, resignation or otherwise, the members, by a majority of the votes cast at a general meeting called for that purpose, may elect a liquidator to fill the vacancy. 1994, c. 11, s. 298 (7).

Same

(8)If a meeting of members cannot be held, the Superintendent may appoint another person to fill the vacancy. 1994, c. 11, s. 298 (8); 1997, c. 28, s. 53.

Removal of liquidator

(9)The members of the credit union may, by a majority of the votes cast at a general meeting called for that purpose, remove a liquidator previously appointed and in such case shall appoint another liquidator in the stead of the removed liquidator.

Start of winding-up

(10)A voluntary winding-up starts at the time of the passing of the resolution requiring the winding-up.

Credit union to cease undertaking

(11)If a credit union is being wound up voluntarily, the credit union shall, from the date of the start of the winding-up, stop carrying on its business, except in so far as may be required for the beneficial winding up thereof.

Corporate powers continue

(12)Although it may be otherwise provided by its charter or by-laws, a credit union’s corporate existence and all its corporate powers continue until the affairs of the credit union are wound up.

No proceeding against credit union without leave

(13)After the start of a voluntary winding-up, no action or other proceedings shall be started against the credit union and no attachment, sequestration, distress or execution shall be put in force against the estate or effects of the credit union except by leave of the court and subject to such conditions as the court imposes.

Liquidator to take custody

(14)Upon appointment, the liquidator shall take custody and control of all property, rights and privileges of the credit union or to which the credit union appears to be entitled and shall take all necessary steps to wind up the credit union. 1994, c. 11, s. 298 (9-14).

Liquidator to file with Superintendent

(15)Within sixty days after appointment, the liquidator shall prepare for and file with the Superintendent, in a form approved by the Superintendent, a statement of the assets and liabilities of the credit union. 1994, c. 11, s. 298 (15); 1997, c. 19, s. 5 (4); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (7).

List of contributories and calls

(16)Upon a voluntary winding-up, the liquidator,

(a) shall settle the list of contributories; and

(b) may, before having ascertained the sufficiency of the property of the credit union, call on any of the contributories for the time being settled on the list of contributories, to the extent of their liability, to pay any sum that the liquidator considers necessary to satisfy the liabilities of the credit union, and the costs, charges and expenses of winding up and for the adjustment of the rights of the contributories among themselves.

Same

(17)Upon a voluntary winding-up, a list of contributories settled by the liquidator is admissible in evidence as proof, in the absence of evidence to the contrary, of the liability of the persons named in the list to be contributories.

Meetings of credit union during winding-up

(18)The liquidator may, during the continuance of the voluntary winding-up, call general meetings of the members of the credit union for the purpose of obtaining their approval by resolution or for any other purpose as the liquidator thinks fit.

Arrangements with creditors

(19)The liquidator, with the approval of a resolution of the members of the credit union passed in general meeting, may make such compromise or other arrangement as the liquidator thinks expedient with any creditor or person claiming to be a creditor or having or alleging that the person has a claim, present or future, certain or contingent, liquidated or unliquidated, against the credit union or whereby the credit union may be rendered liable.

Power to compromise with debtors and contributors

(20)The liquidator may, with the approval of a resolution of the members of the credit union passed in general meeting, compromise all debts and liabilities capable of resulting in debts and all claims, whether present or future, certain or contingent, liquidated or unliquidated, subsisting or supposed to subsist between the credit union and any contributory, alleged contributory or other debtor or person who may be liable to the credit union and all questions in any way relating to or affecting the property of the credit union, or the winding up of the credit union upon the receipt of the sums payable at such times and generally upon such conditions as are agreed, and the liquidator may take any security for the discharge of the debts or liabilities and give a complete discharge in respect of them. 1994, c. 11, s. 298 (16-20).

Account to be made by liquidator

(21)The liquidator shall make up an account, in a form approved by the Superintendent showing the manner in which the winding-up has been conducted and the property disposed of. 1994, c. 11, s. 298 (21); 1997, c. 19, s. 5 (4); 1999, c. 12, Sched. I, s. 2 (7).

Same

(22)After the account is made up, the liquidator shall call a general meeting of the members and shareholders of the credit union for the purpose of having the account laid before them and hearing any explanation that may be given by the liquidator.

Calling meeting

(23)The liquidator shall call the meeting in the manner set out in the credit union’s articles or by-laws. 1994, c. 11, s. 298 (22, 23).

Extension of time

(24)The Superintendent may, by order, extend the time for filing any documents required to be filed under this section if the Superintendent is satisfied that an extension is appropriate. 1994, c. 11, s. 298 (24); 1997, c. 28, s. 53.

Liquidator’s account and dissolution

299.(1)When a meeting to consider the liquidator’s account and report is held, a liquidator must,

(a) within ten days after the meeting, file a notice in the form approved by the Superintendent with the Superintendent stating that the meeting was held and its date; and

(b) forthwith publish the notice in The Ontario Gazette. 1994, c. 11, s. 299 (1); 1997, c. 19, s. 5 (4); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (7).

When dissolved

(2)Subject to subsection (3), the credit union is dissolved three months after the day the notice is filed.

Court order

(3)At any time during the three-month period mentioned in subsection (2), the court may, on the application of the liquidator or any other interested person, make an order deferring the date on which the dissolution of the credit union is to take effect to a date fixed in the order, and in such event the credit union is dissolved on the date fixed in the order.

Dissolution order

(4)Despite anything in this Act, the court, at any time after the affairs of the credit union have been fully wound up may, on the application of the liquidator or any other interested person, make an order dissolving it, and it is dissolved on the date fixed in the order. 1994, c. 11, s. 299 (2-4).

Winding up by court order

300.(1)A credit union may be wound up by order of the court if,

(a) the members by a majority of the votes cast at a general meeting called for that purpose, pass a resolution authorizing an application to be made to the court to wind up the credit union;

(b) proceedings have been started to wind up the credit union voluntarily and it appears to the court that it is in the interest of contributories and creditors that the proceedings should be continued under the supervision of the court;

(c) it is proved to the satisfaction of the court that the credit union, though it may be solvent, cannot by reason of its liabilities continue its business and that it is advisable to wind it up; or

(d) in the opinion of the court it is just and equitable for some reason other than the bankruptcy or insolvency of the credit union that it should be wound up. 1994, c. 11, s. 300 (1).

Who may apply

(2)A winding-up order may be made upon the application of,

(a) the credit union;

(b) a member of a credit union;

(c) if the credit union is being wound up voluntarily,

(i) the Superintendent, the liquidator or a contributory, or

(ii) a creditor having a claim of $200 or more;

(d) in circumstances where the Superintendent could order the dissolution of a credit union, the Superintendent; or

(e) the Corporation. 1994, c. 11, s. 300 (2); 1997, c. 28, s. 53.

Notice to credit union

(3)Except if the application is made by the credit union, four days notice of the application must be given to the credit union. 1994, c. 11, s. 300 (3).

Notice to Superintendent

(4)Except if the application is made by the Superintendent, four days notice of the application must be given to the Superintendent. 1994, c. 11, s. 300 (4); 1997, c. 28, s. 53.

Power of court

(5)The court may,

(a) make the order applied for;

(b) dismiss the application with or without costs;

(c) adjourn the hearing conditionally or unconditionally;

(d) make an interim or such other order as it considers appropriate; or

(e) refer the proceedings for the winding-up to an officer of the court for inquiry and report and authorize the officer to exercise such powers of the court as are necessary for the reference.

Appointment of liquidator

(6)The court making the winding-up order may appoint one or more persons as liquidator of the estate and effects of the credit union for the purpose of winding up its affairs and distributing its property.

Remuneration

(7)The court may at any time fix the remuneration of the liquidator and the costs, charges and expenses of the winding-up.

Vacancy

(8)If a liquidator who is appointed by the court dies or resigns or the office becomes vacant for any reason, the court may fill the vacancy.

Removal

(9)The court may, by order for cause, remove a liquidator appointed by it and appoint another liquidator in the stead of the removed liquidator. 1994, c. 11, s. 300 (5-9).

Notice of appointment

(10)A liquidator appointed by the court must,

(a) forthwith after the appointment, give notice to the Superintendent of the court order respecting the winding-up; and

(b) publish notice of the appointment in The Ontario Gazette. 1994, c. 11, s. 300 (10); 1997, c. 28, s. 53.

Start of winding-up

(11)If a winding-up order is made by the court without prior voluntary winding-up proceedings, the winding-up shall be deemed to start at the time of the service of the notice of the application upon the Superintendent. 1994, c. 11, s. 300 (11); 1997, c. 28, s. 53.

Proceedings in winding-up after order

(12)If a winding-up order has been made by the court, proceedings for the winding up of the credit union must be taken in the same manner and with the like consequences as are provided for a voluntary winding-up, except that,

(a) the list of contributories shall be settled by the court unless it has been settled by the liquidator before the winding-up order; and

(b) all proceedings in the winding-up are subject to the order and direction of the court.

Review by court

(13)If the list of contributories has been settled by the liquidator before the winding-up order, it is subject to review by the court.

Meeting of members may be ordered

(14)If a winding-up order has been made by the court, the court may direct meetings of the members of the credit union to be called, held and conducted in such manner as the court thinks fit for the purpose of ascertaining their wishes, and may appoint a person to act as chair of the meeting and to report the results of it to the court.

Order for delivery of property

(15)If a winding-up order has been made by the court, the court may require any contributory for the time being settled on the list of contributories, or any director, employee, trustee, receiver, banker, agent or officer of the credit union, to pay, deliver, convey, surrender or transfer forthwith, or within such time as the court directs, to the liquidator any money, books, papers, registers and other records, estate or effects that are in any such person’s hands and to which the credit union is apparently entitled.

Inspection of documents and records

(16)If a winding-up order is made by the court, the court may make an order for the inspection of the books, papers, registers and other records of the credit union by its creditors and contributories, and any documents and records in the possession of the credit union may be inspected in conformity with the order.

Proceedings against credit union after order

(17)After the start of a winding-up by order of the court,

(a) no action or other proceedings shall be started or continued against the credit union; and

(b) no attachment, sequestration, distress or execution shall be carried out against the estate or effects of the credit union,

except by leave of the court and subject to such conditions as the court may impose.

Provision for discharge of liquidator and distribution by the court

(18)If the realization and distribution of the property of a credit union being wound up under an order of the court has proceeded so far that, in the opinion of the court it is expedient that the liquidator should be discharged and that the property of the credit union remaining in the liquidator’s hands can be better realized and distributed by the court, the court may make an order discharging the liquidator and for payment, delivery and transfer into court, or to such officer or person as the court directs, of such property, and it shall be realized and distributed by or under the direction of the court among the persons entitled thereto in the same way as nearly as may be as if the distribution were being made by the liquidator and the court may make an order directing how the documents and records of the credit union and of the liquidator are to be disposed of, and may order that they be deposited in court or otherwise dealt with as the court considers appropriate.

Order for dissolution

(19)The court at any time after the affairs of the credit union have been fully wound up may, upon the application of the liquidator or any other interested person, make an order dissolving it, and it is dissolved on the date fixed in the order. 1994, c. 11, s. 300 (12-19).

Notice to Superintendent

(20)The person on whose application the order was made shall, within ten days after it was made, file with the Superintendent a certified copy of the order and the Superintendent shall cause notice of the dissolution to be given in The Ontario Gazette. 1994, c. 11, s. 300 (20); 1997, c. 28, s. 53.

Dissolution by Superintendent

301.(1)The Superintendent, after the credit union has been given an opportunity to be heard by the Superintendent, may, by order, dissolve a credit union if he or she is satisfied that,

(a) its incorporation was obtained by fraud or mistake;

(b) it exists for an illegal purpose;

(c) the number of its members is reduced to fewer than twenty;

(d) it is not carrying on business or is not in operation; or

(e) it has contravened this Act or the regulations. 1994, c. 11, s. 301 (1); 1997, c. 28, s. 53.

Order for dissolution

(2)If necessary, the Superintendent shall appoint a liquidator to carry out the dissolution. 1994, c. 11, s. 301 (2); 1997, c. 28, s. 53.

Liquidation

(3)The liquidator, if one is appointed, shall proceed to wind up the credit union and subsections 298 (11) to (24) and 299 (1) apply thereto, except that no approval of the members of the credit union is required. 1994, c. 11, s. 301 (3).

Publishing order

(4)The Superintendent shall publish notice of the dissolution in The Ontario Gazette. 1994, c. 11, s. 301 (4); 1997, c. 28, s. 53.

Liability of members and shareholders to creditors

302.(1)Despite the dissolution of a credit union, each of the members or shareholders among whom its property has been distributed other than the refunds of deposits, remains liable to its creditors to the extent of the amount received by the member or shareholder upon the distribution, and an action in a court of competent jurisdiction to enforce such liability may be brought against the member or shareholder. 1994, c. 11, s. 302 (1); 2002, c. 24, Sched. B, s. 32.

Action against one member or shareholder as representing a class

(2)If there are several members or classes of shareholders, the court may permit an action to be brought against one or more members or one or more shareholders of each class of shareholders as representatives of the class of members or shareholders and, if the plaintiff establishes the plaintiff’s claim as creditor, may make an order of reference and add as parties in the referee’s office all such members or shareholders of each class of shareholders as are found, and the referee shall determine the amount that each should contribute towards the plaintiff’s claim and may direct payment of the sums so determined. 1994, c. 11, s. 302 (2).

Forfeiture of undisposed property

303.Subject to section 302, any real or personal property of a credit union that has not been disposed of at the date of its dissolution is forfeit to the Crown in right of Ontario. 1994, c. 11, s. 303.

Responsibilities of liquidator

304.Upon a winding-up of a credit union,

(a) the liquidator shall apply the property of the credit union in satisfaction of all its debts, obligations and liabilities, and, subject thereto, shall distribute any remaining property rateably among the members or shareholders according to their rights and interests in the credit union;

(b) in distributing the property of the credit union, debts due to the employees of the credit union for services performed due at the commencement of the winding-up or within one month before, not exceeding three months wages and accumulated sickness benefits or vacation pay accrued for not more than twelve months, shall be paid in priority to the claims of the ordinary creditors, and such persons shall rank as ordinary creditors for any additional amount of their claims for wages;

(c) all the powers of the board of a credit union being wound up cease upon the appointment of a liquidator except to the extent that the liquidator may permit the continuance of these powers for the purpose of assisting the winding-up proceedings. 1994, c. 11, s. 304.

Distribution of property

305.Section 53 of the Trustee Act applies with necessary modifications to liquidators. 1994, c. 11, s. 305.

Payment of costs and expenses

306.The costs, charges and expenses of the winding-up including the remuneration of the liquidator are payable out of the property of the credit union in priority to all other claims. 1994, c. 11, s. 306.

Powers of liquidator

307.(1)A liquidator may,

(a) bring or defend any action, suit or prosecution, or other legal proceedings, civil or criminal, in the name and on behalf of the credit union;

(b) carry on the business of the credit union so far as may be necessary for the beneficial winding up of the credit union;

(c) sell the real and personal property of the credit union by public auction or private sale;

(d) borrow money on behalf of the credit union as may be necessary for the winding up of the credit union;

(e) draw, accept, make and endorse any bill of exchange or promissory note in the name and on behalf of the credit union;

(f) raise upon the security of the property of the credit union such money as may be required;

(g) take out in the liquidator’s official name, letters of administration of the estate of any deceased contributory and in that official name, do any other act that may be necessary for obtaining payment of any money due from a contributory or from his or her estate that cannot conveniently be done in the name of the credit union;

(h) do and perform all acts and other things and execute under the corporate seal or otherwise all documents in the name and on behalf of the credit union as may be necessary for winding up the affairs of the credit union and distributing its property;

(i) engage the services of a solicitor to assist in the performance of the liquidator’s duty;

(j) employ an agent to do any business that the liquidator is unable to do directly;

(k) claim and, where necessary, prove any claim against the estate of a contributory for any debt or liability to the credit union;

(l) receive dividends in the distribution of an estate of a contributory in respect of any debt or liability mentioned in clause (k);

(m) compromise all calls, and liabilities to call, debts and liabilities capable of or resulting in debts, and all claims, whether present or future, certain or contingent, liquidated or unliquidated, subsisting or alleged as subsisting between the credit union and any other person;

(n) do and execute all such other things as are necessary for winding up the affairs of the credit union and distributing its property.

Bills of exchange deemed drawn in the course of business

(2)The execution, endorsement or making of all agreements, contracts, bills of exchange or other documents by a liquidator on behalf of a credit union has the same effect with respect to the rights and liabilities of the credit union as if the agreements, contracts or bills of exchange or other documents had been executed, endorsed or made by or on behalf of the credit union in the course of carrying on its business. 1994, c. 11, s. 307 (1, 2).

Where approval required

(3)The liquidator shall not exercise power granted under clause (1) (a), (d), (f), (m) or (n),

(a) in the case of a voluntary winding-up or a liquidator appointed by the Superintendent under section 301, unless the liquidator has obtained the approval in writing of the Superintendent; or

(b) in the case of a winding-up by order of the court, unless the liquidator has obtained the approval of the court. 1994, c. 11, s. 307 (3); 1997, c. 28, s. 53.

Exception

(4)Clause (3) (a) does not apply where the Corporation is the liquidator.

Notice of liability of contributory

(5)The liability of a contributory is a debt accruing due from the contributory at the time when the contributory’s liability commenced, but payable at the time when calls are made for enforcing the liability.

Who liable in case of death

(6)If a contributory dies before or after he or she is placed on the list of contributories, his or her personal representative, in administering the estate of the contributory, is liable to contribute to the property of the credit union in discharge of the liability of the deceased contributory and shall be a contributory accordingly.

Examination of persons as to estate

(7)The court may, at any time after the commencement of the winding-up, summon to appear before the court or liquidator, any director, manager, employee or officer of the credit union, or any other person known or suspected to have possession of any of the estate or effects of the credit union, or alleged to be indebted to the credit union, or any person whom the court thinks capable of giving information concerning the dealings, estate or effects of the credit union.

Damages against delinquent directors, etc.

(8)If, in the course of the winding-up of a credit union, it appears that a person who has taken part in the formation or promotion of the credit union or any past or present director, manager, officer, employee, liquidator or receiver of the credit union has misapplied or retained in the person’s own hands, or become liable or accountable for money of the credit union, or has committed any misfeasance or breach of trust in relation to the credit union, the court may, on the application of a creditor, member, director, liquidator, or contributory, inquire into the conduct of that person and order the person to restore the money so misapplied or retained, or for which the person has become liable or accountable together with interest at such rate as the court considers just or to contribute such sum to the property of the credit union by way of compensation in respect of the misapplication, retention, misfeasance or breach of trust as the court considers just. 1994, c. 11, s. 307 (4-8).

Disposal of records

(9)If a credit union has been wound up under this Act and is about to be dissolved, the books, registers and other records and papers of the credit union and of the liquidator may be disposed of in such manner as,

(a) the Superintendent may order, in the case of voluntary winding up or a liquidator appointed by the Superintendent under section 301; or

(b) the court may order in the case of winding up under court order. 1994, c. 11, s. 307 (9); 1997, c. 28, s. 53.

Regulations

(10)The Lieutenant Governor in Council may make regulations respecting the procedure to be followed in a winding-up, and, unless otherwise provided by this Act or by those regulations, the practice and procedure in a winding-up under the Winding-up Act (Canada) applies. 1994, c. 11, s. 307 (10).

Notice of winding-up proceedings

308.If proceedings are taken under the Winding-up Act (Canada) in respect of a credit union, the secretary of the credit union shall send notice of the proceedings to the Superintendent by registered mail. 1994, c. 11, s. 308; 1997, c. 28, s. 53.

Amalgamations

Amalgamation of credit unions

309.(1)Any two or more credit unions may amalgamate and continue as one credit union.

Amalgamation agreement

(2)The credit unions proposing to amalgamate must enter into an agreement for the amalgamation prescribing the conditions of the amalgamation, the mode of carrying the amalgamation into effect, and, in particular, the agreement must set out the following:

1. The name of the amalgamated credit union.

2. The limitation on membership in the amalgamated credit union.

3. The name in full, callings and places of residence of the first directors of the amalgamated credit union.

4. The time and manner of election of subsequent directors of the amalgamated credit union.

5. The manner of converting the share capital of each of the amalgamating credit unions into that of the amalgamated credit union.

6. If any membership shares of one of the credit unions are not to be converted into membership shares of the amalgamated credit union, the amount of money or securities that the members are to receive in addition or instead of membership shares of the amalgamated credit union.

7. If any shares of one of the credit unions are not to be converted into shares or other securities of the amalgamated credit union, the amount of money or securities that the holders of the shares are to receive in addition or instead of shares or other securities of the amalgamated credit union.

8. The manner of payment of money instead of the issue of fractional shares of the amalgamated credit union or of any other body corporate that are to be issued in the amalgamation.

9. Such other details as are necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated credit union.

10. The proposed effective date of the amalgamation. 1994, c. 11, s. 309 (1, 2).

Filing of agreement

(3)Within one month after the agreement is signed, the parties must file with the Superintendent, in triplicate, true copies of the amalgamation agreement. 1994, c. 11, s. 309 (3); 1997, c. 28, s. 53.

Approvals required

(4)The agreement is subject to the approval of the Superintendent and to adoption by a vote of two-thirds of the votes cast at a meeting of members and shareholders of each of the amalgamating credit unions called for the purpose of considering the agreement. 1994, c. 11, s. 309 (4); 1997, c. 28, s. 53.

Meeting

(5)The meeting to approve the amalgamation must be held within one month after the approval of the Superintendent is given. 1994, c. 11, s. 309 (5); 1997, c. 28, s. 53.

Certification

(6)If the amalgamation is approved, that fact must be certified upon the agreement by the secretary of each of the amalgamating credit unions. 1994, c. 11, s. 309 (6).

Extension of time

(7)The Superintendent may extend the time within which the meeting to approve the amalgamation must be held if there are reasonable grounds for doing so. 1994, c. 11, s. 309 (7); 1997, c. 28, s. 53.

Articles of amalgamation filed, application for certificate

(8)If the agreement is adopted, the amalgamating credit unions may,

(a) file with the Superintendent articles of amalgamation in the form approved by the Minister; and

(b) apply jointly to the Minister for a certificate of amalgamation.

Certificate of amalgamation

(9)The Minister may, in his or her discretion, issue a certificate of amalgamation, and on and after the date of the certificate,

(a) the amalgamating credit unions are amalgamated and are continued as one credit union under the name set out in the certificate;

(b) the amalgamated credit union possesses all the property, rights, privileges and franchises and is subject to all the liabilities, contracts, disabilities and debts of each of the amalgamating credit unions; and

(c) the articles of amalgamation shall be deemed to be the articles of incorporation of the amalgamated credit union and the certificate of amalgamation shall be deemed to be the certificate of incorporation of the amalgamated credit union. 1999, c. 12, Sched. I, s. 2 (8).

Notice

(10)The Minister shall publish notice of the issue of the certificate of amalgamation in The Ontario Gazette. 1994, c. 11, s. 309 (10).

Compulsory amalgamation

310.(1)The Corporation may apply to the Minister for an order that two or more credit unions amalgamate if,

(a) the credit unions are under the administration of the Corporation; or

(b) one of the credit unions is under the administration of the Corporation and the other credit unions consent.

Same

(2)If an amalgamation takes place under this section, the conditions of and the means of effecting it must be specified in the instrument of amalgamation prepared by the Corporation.

Amalgamation agreement

(3)The instrument of amalgamation must follow as closely as possible the conditions required under section 309.

Issue of order

(4)The Minister may issue an order to amalgamate if the Corporation or stabilization authority, as the case may be, demonstrates that the amalgamation would,

(a) protect the interests of the depositors or members of the credit unions; and

(b) promote the financial security and integrity of the amalgamated credit union.

Costs

(5)The amalgamating credit unions are responsible for the costs of an amalgamation under this section in the proportions directed by the Corporation. 1994, c. 11, s. 310.

Reorganization

Articles of amendment

311.(1)A credit union may from time to time amend its articles of incorporation to,

(a) limit its business or powers or otherwise vary its business or powers;

(b) change its name; or

(c) add, change or remove any provision that,

(i) is authorized by this Act to be set out in the articles, or

(ii) could be subject to a by-law of the credit union.

Authorization

(2)An amendment under subsection (1) must be authorized by special resolution of members and such further authorization as the by-laws provide. 1994, c. 11, s. 311.

Class vote

312.(1)The holders of shares of a class or of a series are entitled to vote separately as a class or series on a proposal to amend the articles to,

(a) increase or decrease any maximum number of authorized shares of that class, or increase any maximum number of authorized shares of a class having rights or privileges equal or superior to the shares of that class;

(b) effect an exchange, reclassification or cancellation of all or part of the shares of that class;

(c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of that class and, without limiting the generality of the foregoing,

(i) prejudicially remove or change rights to accrued dividends or rights to cumulative dividends,

(ii) prejudicially add, remove, or change redemption rights,

(iii) reduce or remove a dividend preference or a liquidation preference, or

(iv) prejudicially add, remove or change conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of the credit union;

(d) increase the rights or privileges of any class of shares having rights or privileges equal or superior to the shares of that class;

(e) create a new class of shares equal or superior to the shares of that class;

(f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or

(g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class.

Exception

(2)Subsection (1) does not apply to a class of shares that confer membership status.

Same

(3)Subsection (1) does not apply in the case of amendments to the articles referred to in clause (1) (a), (b) or (e) if the articles so provide.

Right limited

(4)Subject to subsection (3), the holders of a series of shares of a class are entitled to vote separately as a series under subsection (1) if that series is affected by an addition or amendment to the articles in a manner different from other shares of the same class.

Right to vote

(5)Subsections (1) and (4) apply whether or not the shares of a class otherwise carry the right to vote. 1994, c. 11, s. 312.

Required documentation

313.The credit union must deliver to the Superintendent, within six months after the special resolution has been confirmed by its members and affected shareholders, articles of amendment in duplicate, signed by two officers, or by one director and one officer, of the credit union and verified by affidavit of one of the officers or directors signing the articles of amendment, setting out,

(a) the name of the credit union;

(b) a certified copy of the special resolution;

(c) that the amendment has been duly confirmed and authorized; and

(d) the date of the confirmation of the special resolution by the members and affected shareholders. 1994, c. 11, s. 313; 1997, c. 28, s. 53.

Certificate of amendment

314.(1)If the articles of amendment conform to law, the Superintendent shall, when all fees established by the Minister have been paid,

(a) endorse on each duplicate of the articles of amendment the word “Filed/Déposé” and the day, month and year of the filing thereof;

(b) file one of the duplicates in the Superintendent’s office; and

(c) issue to the credit union or its agent a certificate of amendment to which the Superintendent shall affix the other duplicate. 1994, c. 11, s. 314 (1); 1997, c. 19, s. 5 (5); 1997, c. 28, s. 53.

Effect of certificate

(2)The amendment becomes effective upon the date set out in the certificate of amendment and the articles of incorporation are amended accordingly. 1994, c. 11, s. 314 (2).

Restatement of articles

315.(1)Subject to subsections (2) and (3), a credit union may at any time restate its amended articles of incorporation. 1994, c. 11, s. 315 (1).

Filing of restatement

(2)The credit union shall deliver to the Superintendent the restated articles in duplicate, signed by two officers, or by one director and one officer, of the credit union and verified by affidavit of one of the officers or directors signing the restated articles, setting out,

(a) all the provisions that are then set out in the original articles of incorporation as amended; and

(b) a statement that the restated articles correctly set out, without change, the corresponding provisions of the original articles as amended. 1994, c. 11, s. 315 (2); 1997, c. 28, s. 53.

Certificate of restatement

(3)If the restated articles of incorporation conform to law, the Superintendent shall, when all fees established by the Minister have been paid,

(a) endorse on each duplicate of the restated articles the word “Filed/Déposé” and the day, month and year of the filing thereof;

(b) file one of the duplicates in the Superintendent’s office; and

(c) issue to the credit union or its agent a restated certificate of incorporation to which the Superintendent shall affix the other duplicate. 1994, c. 11, s. 315 (3); 1997, c. 19, s. 5 (5); 1997, c. 28, s. 53.

Effect of certificate

(4)The restated articles of incorporation become effective upon the date set out in the restated certificate and supersede the original articles of incorporation and all amendments to them. 1994, c. 11, s. 315 (4).

Transition

Management by Corporation

316.If the Corporation, itself or by some other person, is in possession of the property of a credit union and conducting its business under the predecessor of this Act, the Corporation shall continue conducting the business of the credit union until,

(a) the order under which it is acting is terminated;

(b) the credit union is wound up; or

(c) the management of the credit union is restored to the credit union’s board. 1994, c. 11, s. 316.

PART XVI
REGULATIONS

Regulations: general

317. (1) The Lieutenant Governor in Council may make regulations,

1. Repealed: 1997, c. 19, s. 5 (7).

2. Repealed: 1997, c. 19, s. 5 (7).

3. respecting the holding of first meetings, the notice calling the meeting, the quorum, and the business to be transacted;

4. prescribing matters to be shown in financial statements under subsection 213 (1);

5. governing credit unions and leagues of credit unions;

6. governing the operations and powers of branches of credit unions;

7. respecting stabilization authorities and funds including,

i. prescribing the manner that funds in general or any fund in particular shall be financed and operated,

ii. regulating the investing and disbursing of money,

iii. regulating the provision of financial and other assistance to credit unions,

iv. prescribing accounting and reporting requirements, and

v. prescribing any other matters in respect thereto that the Lieutenant Governor in Council considers advisable;

8. respecting the management of risk in making loans and investments and in the general management of a credit union’s business;

9. Repealed: 1997, c. 19, s. 5 (7).

10. respecting the records, papers and documents to be retained by credit unions and the length of time they are to be retained;

11. defining, for the purposes of this Act and the regulations, any word or expression used in this Act that is not defined in the Act;

12. prohibiting or restricting the sale by credit unions of a product or service on condition that another product or service is acquired from any person;

13. prescribing any matter authorized by this Act to be prescribed by the regulations or referred to as prescribed;

14. defining the interests of a credit union in real property and determining the method of valuing those interests;

15. regulating the extent to which credit unions are permitted to undertake the business of insurance or prohibiting them from undertaking the business of insurance;

16. governing the business of insurance as undertaken by credit unions;

17. respecting the relations between credit unions and,

i. entities that undertake the business of insurance, and

ii. insurance agents or insurance brokers;

18. respecting networking arrangements between credit unions and other persons providing products or services to credit unions or its members;

19. prohibiting or restricting networking arrangements;

20. governing the conduct of credit unions in networking arrangements;

21. respecting the protection of members of credit unions and of the public in their dealings with credit unions including the regulating of representations that may be made by credit unions;

22. prescribing and regulating,

i. classes of loans,

ii. classes of lending licences, lending licences and the duration of licences, and

iii. aggregate and individual lending limits for credit unions and methods of calculating limits;

23. prescribing the type and value of security that a credit union must have before making a loan and the method for valuing such security;

24. prescribing procedures to be followed by credit unions in dealing with consumer complaints by members or depositors;

25. respecting the retention, in Canada, of assets of a credit union;

26. requiring the disclosure to borrowers of terms and conditions of loans and mortgages and of interest rates in lending transactions and to depositors, the rate of interest on their accounts and the manner of calculating and paying the interest;

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 26 is repealed by the Statutes of Ontario, 1999, chapter 12, Schedule I, subsection 2 (9) and the following substituted:

26. requiring the disclosure to depositors of the rate of interest on their accounts and the manner of calculating and paying the interest;

See: 1999, c. 12, Sched. I, ss. 2 (9), 8 (2).

27. requiring the bonding of and insurance coverage for directors, officers, agents and employees of the credit union and of property of or held by the credit union;

28. governing the use of confidential information by the credit unions, stabilization authorities and the Corporation;

29. prescribing the discretionary authorities that may be conferred in proxies and excluding the application of similar provisions in regulations made under Part VIII of the Business Corporations Act;

30. authorizing the Corporation to provide services prescribed by the regulations that are ancillary, complementary or similar to services it performs as deposit insurer or stabilization authority to persons, bodies or classes of persons or bodies prescribed by the regulations, and governing the provision of those services. 1994, c. 11, s. 317 (1); 1997, c. 19, s. 5 (6, 7); 2002, c. 18, Sched. H, s. 3 (11).

Same

(2) A regulation made under this Act may,

(a) be made applicable generally or to a specific credit union, league or class of credit unions or leagues;

(b) define classes of credit unions, leagues or assets for the purpose of the regulations, including classes that may include only one credit union, league or asset; and

(c) provide differently for different credit unions, for different classes of credit unions, for different leagues, for different classes of leagues, for different assets or for different classes of assets. 1994, c. 11, s. 317 (2).

Same

(3) A regulation may adopt by reference, in whole or in part, with such changes as the Lieutenant Governor in Council considers necessary, any code, standard or guideline, as amended from time to time, whether before or after the regulation is filed, and may require compliance with any code, standard or guideline adopted. 1994, c. 11, s. 317 (3).

Same

(4) If an amount or rate is to be prescribed under subsection (1), the regulation may prescribe a method of determining the amount or rate. 1994, c. 11, s. 317 (4).

Regulations: offering statements

318.The Lieutenant Governor in Council may make regulations,

(a) Repealed: 1997, c. 19, s. 5 (7).

(b) specifying the financial statements, reports and other documents that are to be included with an offering statement;

(c) respecting the disclosure of material facts in relation to securities to be distributed;

(d) respecting the distribution of an offering statement;

(e) exempting any class of distributions from the application of sections 75 to 83;

(f) generally, for carrying out the purposes of sections 75 to 83. 1994, c. 11, s. 318; 1997, c. 19, s. 5 (7).

Regulations: capital adequacy

319.The Lieutenant Governor in Council may make regulations,

(a) regulating the maintenance, by credit unions, of adequate capital and adequate and appropriate forms of liquidity;

(b) respecting regulatory capital and the total assets of a credit union;

(c) prescribing phase-in periods for capital adequacy requirements based on a graduated scale;

(d) adopting by reference any code, standard or guideline in respect of capital adequacy requirements;

(e) requiring compliance with any regulation, administrative directive, or prescribed requirement, code, standard or guideline. 1994, c. 11, s. 319; 1997, c. 19, s. 5 (7).

Regulations: training programs

320.The Lieutenant Governor in Council may make regulations,

(a) providing for the establishment of training programs;

(b) prescribing the subject matter and nature of the programs;

(c) requiring successful completion of prescribed programs;

(d) prescribing the classes of persons, by occupation, experience or function, required to complete prescribed programs and prescribing the time for completing programs by each class of persons. 1994, c. 11, s. 320.

Regulations: audit committee

321.The Lieutenant Governor in Council may make regulations prescribing the duties and functions of audit committees. 1994, c. 11, s. 321.

Forms

321.1The Superintendent may approve the use of forms, specify the procedure for the use of the forms, and require their use for any purpose of this Act, and the forms may provide for such information to be furnished as the Superintendent may require. 1997, c. 19, s. 5 (8); 1999, c. 12, Sched. I, s. 2 (10).

Reports

321.2The Superintendent may approve the form and contents of any report required to be prepared under this Act or the regulations and the manner of reporting. 1997, c. 19, s. 5 (8); 1999, c. 12, Sched. I, s. 2 (10).

Circulars and proxies

321.3The Superintendent may approve the form and content of information circulars and proxies. 1997, c. 19, s. 5 (8); 1999, c. 12, Sched. I, s. 2 (10).

Statements

321.4The Superintendent may approve the form and content of an offering statement or a statement of material changes. 1997, c. 19, s. 5 (8); 1999, c. 12, Sched. I, s. 2 (10).

Report on capital adequacy

321.5The Superintendent may approve the form and content of reports on compliance with the capital adequacy requirements under this Act. 1997, c. 19, s. 5 (8); 1999, c. 12, Sched. I, s. 2 (10).

Fees

321.6The Minister may establish and charge fees for anything required or permitted to be done by this Act or the regulations. 1997, c. 19, s. 5 (8).

PART XVII
OFFENCE

Offence, general

322.(1)Every person who contravenes any provision of this Act or the regulations or an order of the Superintendent is guilty of an offence. 1994, c. 11, s. 322 (1); 1997, c. 28, s. 53.

Officers, agents, etc.

(2)If an entity commits an offence under this Act, every director, officer or agent of the entity who authorized, permitted or acquiesced in the offence is a party to and guilty of the offence and is liable, on summary conviction, to the penalty for the offence whether or not the entity has been prosecuted or convicted.

Penalty

(3)A person who is guilty of an offence referred to in this section is liable,

(a) in the case of an entity, on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000; and

(b) in the case of an individual,

(i) on a first conviction, to a fine of not more than $100,000 or to imprisonment for not more than two years or both, and

(ii) on each subsequent conviction, to a fine of not more than $200,000 or to imprisonment for not more than two years or to both. 1994, c. 11, s. 322 (2, 3).

Offences, other

323.(1)A credit union that is in default of providing any information requested by the Superintendent within the time allowed by the Superintendent or filing the annual return required under section 226 is guilty of an offence and upon conviction is liable to a fine of not more than $500 for each day the default continues. 1994, c. 11, s. 323 (1); 1997, c. 28, s. 53.

Failure to pay Corporation

(2)A credit union that is in default of payment of any assessment made on it by, or annual premium payable to the deposit insurer or a stabilization authority is guilty of an offence and upon conviction is liable to a fine of not more than $500 for each day the default continues. 1994, c. 11, s. 323 (2).

Failure to pay Ministry or L. G. in C.

(3)A credit union that is in default of payment of any assessment made on it by the Ministry of Finance or the Lieutenant Governor in Council is guilty of an offence and upon conviction is liable to a fine of not more than $500 for each day the default continues. 1994, c. 11, s. 323 (3); 1997, c. 28, s. 62.

Order to comply

324.If a person is convicted of an offence under this Act the court making the conviction, in addition to any penalty it may impose, may order that person to comply with the provisions of this Act or the regulations for the contravention of which the person has been convicted. 1994, c. 11, s. 324.

Restitution

325.If a person is convicted of an offence under this Act, the court making the conviction, may, in addition to any other penalty, order the person convicted to pay compensation or make restitution in relation to the offence to any person suffering a loss because of the offence. 1994, c. 11, s. 325.

Repaying benefits

326.(1)If a person has been convicted of an offence under this Act, the court may order the convicted person to pay an amount equal to the court’s estimation of the amount of any monetary benefits acquired by the convicted person or accruing to the convicted person or to the spouse or same-sex partner or a dependant of the person. 1994, c. 11, s. 326 (1); 1999, c. 6, s. 19 (6).

Same

(2)Subsection (1) applies even though the maximum fine has been imposed on the convicted person. 1994, c. 11, s. 326 (2).

Order to comply

327.(1)If a credit union or any director, officer, employee or agent of a credit union does not comply with any provision of this Act, the regulations, the articles of incorporation or by-laws of the credit union, the Superintendent, a member or any creditor of the credit union may apply to the court for an order directing the credit union, director, officer, employee or agent to comply with, or restraining the credit union, director, officer, employee or agent from acting in breach of the provision. 1994, c. 11, s. 327 (1); 1997, c. 28, s. 53.

Additional order

(2)On an application under subsection (1), the court may make the order applied for and such further order it thinks appropriate. 1994, c. 11, s. 327 (2).

Restricted party transaction

328.(1)If a restricted party transaction that is prohibited or restricted by this Act or the regulations takes place, any interested person, including the Superintendent, may apply to the court for an order,

(a) setting aside the transaction and directing that the restricted party account to a credit union for any profit or gain realized; and

(b) that each person who participated in or facilitated the transaction pay to the credit union on a joint and several basis the damages suffered, the face value of the transaction or the amount expended by the credit union in the transaction. 1994, c. 11, s. 328 (1); 1997, c. 28, s. 53.

Order

(2)The court may make the order applied for or such other order as it thinks appropriate.

Same

(3)An order under subsection (2) may order compensation for a loss or damage suffered by the credit union and punitive damages from the restricted party.

Exemption

(4)A person who is not a director is not liable under clause (1) (b) unless the person knew or ought reasonably to have known that the transaction was made in contravention of a restricted party provision. 1994, c. 11, s. 328 (2-4).

Effect of contravention

329.A contravention of a provision of this Act or the regulations does not invalidate a contract entered into in contravention of the provision unless otherwise expressly provided in this Act. 1994, c. 11, s. 329.

Effect of penalty

330.The fact that a person is subject to or has paid a penalty for an offence under this Act does not relieve that person from any other liability in a civil proceeding. 1994, c. 11, s. 330.

Limitation period

331.No proceeding for an offence under this Act shall be started more than two years after the facts on which the proceedings are based first came to the knowledge of the Superintendent. 1994, c. 11, s. 331; 1997, c. 28, s. 53.

PART XVIII
MISCELLANEOUS

Extra-provincial credit unions

332.(1)If the Government of Ontario has entered into an agreement providing for reciprocal rights for credit unions with the government of a province or territory of Canada, a credit union incorporated under the laws of that province or territory may register under this Act for such purposes as are specified in the agreement. 1994, c. 11, s. 332 (1).

Register

(2)The Superintendent shall maintain the Extra-Provincial Credit Unions Register and shall record in it the names of the credit unions registered and the limited purposes to which they are subject in Ontario. 1994, c. 11, s. 332 (2); 1997, c. 28, s. 53.

Condition precedent to licence

(3)No credit union that is an extra-provincial corporation within the meaning of the Extra-Provincial Corporations Act shall be licensed under that Act as an extra-provincial corporation unless it has been first registered under this Act by the Superintendent. 1994, c. 11, s. 332 (3); 1997, c. 28, s. 53.

333.Repealed: 1997, c. 28, s. 63.

Review

334.The Superintendent shall undertake a review of this Act and, by the fifth anniversary of its coming into force, recommend to the Minister any amendments he or she believes will improve the effectiveness and administration of this Act. 1994, c. 11, s. 334; 1997, c. 28, s. 53.

Delivery of notice

335.Delivery of any written notice or document for any purpose of this Act, if the mode is not otherwise specified, may be delivered by first class ordinary mail or first class registered mail,

(a) in the case of a credit union, addressed to it or its chief executive officer at its principal place of business;

(b) in the case of a director, addressed to the director at his or her address as shown on the records of the Ministry;

(c) in the case of the Superintendent, addressed to the Superintendent at his or her office; or

(d) in the case of a member, addressed to the member at his or her address as shown in the records of the credit union or by personal delivery to the member at his or her place of employment. 1994, c. 11, s. 335; 1997, c. 28, s. 53.

336.-395. Omitted (amends or repeals other Acts). 1994, c. 11, ss. 336-395.

396. Omitted (provides for coming into force of provisions of this Act). 1994, c. 11, s. 396.

397. Omitted (enacts short title of this Act). 1994, c. 11, s. 397.

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