Bill 36 — First Session, 16Th Legislature, 17 Elizabeth' Ii the Legislative Assembly of Alberta Bill 36 An Act To Amend the Credit Union Act (Legislature 16, Session 1)

L16 S1 4487

Alberta — Bills

1968 Bill 36 First Session, 16th Legislature, 17 Elizabeth' II THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 36

An Act to amend The Credit Union Act THE MINISTER OF INDUSTRY AND DEVELOPMENT First Reading ............... " .............................................. . Second Reading ....................................................... .. Third Reading ............................................................ . Printed by L. S. Wall, Queen's Printer, Edmonton

BILL 36 1968

An Act to amend The Credit Union Act (Assented to , 1968) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of the Province of Alberta, enacts as follows: 1. The Credit Union Act is hereby amended.

Section 32 is amended by striking out subsection (1) and by substituting the following: 32.

(1) The credit committee shall not grant a loan in an amount greater than the sum obtained by adding together (

a) the amount prescribed by the standard by-laws for the purposes of this section, and (

b) the value of the unencumbered portion of the shares of the borrower, unless security is taken for the loan.

Section 32a is amended (

a) as to subsection (1) by striking out the words ~'manager or treasurer" and by substituting the words "manager, treasurer or other designated employee" , (

b) by striking out subsection (2) and by substituting following:

(2) A loan officer may make a loan in excess of a member's shares to a maximum of one-half of one per cent of the assets of the credit union in a single loan, but in no case may the amount of the loan so granted be greater than the sum obtained by adding together (

a) the amount prescribed by the standard by laws for the purposes of this section, and (

b) the value of the unencumbered portion of the shares of the borrower. (

c) by adding the following subsection after subsection (4) :

(5) The board of directors of a credit union (

a) may, subject to subsection (1), appoint more than one loan officer, and

Explanatory Notes I. This Bill amends

chapter ,67 of the Revised Statutes. 2-.. This ,Cimencl-ment allo-ws for the Lieutenant Governor in Council to set the maximum amount of loans in excess. of unencum bered shares, which procedure will allow for greater flexibility and speed. Sections 11 (1) and 32 (1) presently read: 11-.>

(1) The. Supervisors-ha:ll prepare and submit for approval by the Li;e'O.'tertan't G6V"ernor in' Council- standard' oy-laws, not inconsisten·f with this Act, which shall apply to every credit union incorporat€d here under. 32.

(1) The credit committee shall not grant a loan of more than four hlUndrect dollars in excess of the unencumbered portion· of the shares of the J)'Orl'ow'e'l'" with'Out. t'equiting s'ecurity. s. Tllese am.'eitdmen"f:si (a)' anow f6t' empfuyees -other than' man.agers and treasurers ft), be' mad>e loan offie-ets, which is intended to spread out th~ we:rkl 1:o11d, (b}' arrow for- the Lie"Utemmt Governor in.

Council to set the maximum am·o'Q.'nt of' a' roan which a foa'n officer may make in eX'cess of a bOxrr'0wer's unencumbered shares, which pro eeaure, will nmke· for greater flexibility and speed, and G.-e)' e111able 'a,eredi,t union to, have more· than one loan officer at a. time. ~ect'ton 32'g- presently reads: 3'2a.

(1) With the consent of the S-upervisor the board' of directors Of a CI'Efdit: un.i.olJ. ma~r" by; l'estllutio.n" appoint the· manager or treasurer Of' tl1:e' cl'edit u1fi6IT as l'o-a:rr officer' WIth autl10rity to makp Immediate lo-gn~ 1!0' m~:m;D:el!s Witliout f.irst: o:btainfng, the approval of theo c.redit aommitt.ee:.

(2) The roan officer maY make a roari iri excess of a l'l'remlfer'g shares to a maximum of one-half of one per cent of the assets of the credit union in a single loan, but in no case may the amount of the loan so lFarited, by the loan: offi~er be' more than five hundred dolla-rs greater than the unencumbered portion of an applicant's· shares. (3)' Tlf~ l'oa'l'f Office!" shall' repmt the making of every loan to tlle l1IIe~ ~'lltt- m'ee:t1'rlg' o.tt t'he' credit: comltlittpe and the' credit committee shall ratify the action of" the loan officer by noting their approval on f11;e ~p.u..(latl:o.n, (-l'p '];h.e Super-visol.'l may withdraw his consent, at any time and there Ul1ol'f n't)' furth'el" IOl1n'S' ~'3]U Be' Itiade W the' loan officer.

(

b) shall, when seeking the consent of the Super visor for any appointment, provIde the Super visor with any information he may require respecting the qualifications, character and other matters respecting the proposed appointee.

Section 33 is struck out and the following

section is substituted: 33.

(1) Subject to subsection (2) a loan may be made to any director, ofiicer, supervisory committee member or other official or emloyee of a credit union in accordance with this Act, but any such loan shall be reported by the credit committee or loan officer making the loan, as the case may be, to the board of directors at its first meeting subsequent to the making of the loan.

(2) A loan to a credit committee member shall not be made without the approval of a two-thirds majority vote of a quorum of the board of directors. 5. The heading "Reserve Fund" and

section 41 are struck out and the following heading and

section are substituted: Guaranteed Reserve Fund 41.

(1) Subject to subsection (2), the board of direc tors shall set aside as a guarantee reserve fund (

a) all entrance fees and fines collected from mem bers, and (

b) at the end of each fiscal year before the declar ation of a dividend, .such portion of the net earnings of the credit union as shall be necessary to provide adequate guarantee reserves for delin quent loans in accordance with such scale as may be provided in the standard by-laws.

(2) Where at the close of any fiscal year, the amount of the guarantee reserve fund is equal to at least 7 per cent of the total amount of loans outstanding to members, the directors may with the consent of the Supervisor, direct that no moneys, other than fees and fines, shall be set aside for the guarantee reserve fund for that year.

(3) The guarantee reserve fund shall be held as a reserve against bad loans only and shall not be distributed except on general liquidation of the assets of the credit union.

(4) Subject to the standard by-laws, a credit union shall, if required by the Supervisor or his appointee, write off any overdue loan against the guarantee reserve fund.

(5) Every credit union shall invest 5 per cent of its net earnings in the credit union stabilization fund estab lished pursuant to

section 79. 2

4. This change places directors, officers, employees, and super visory committee members on nearly the same footing as ordinary members as far as the procedure for obtaining loans for themselves is concerned.

Section 33 presently ,reads: 33.

(1) A loan in excess of the value of his shares and deposits and accumulated earnings shall not be made to a director, officer, or mem ber of the credit committee or supervisory committee, or to an official or employee of the credit union who is also a member thereof, unless the loan is approved by a joint meeting of the board of directors, the credit committee and the supervisory committee at which a majority of the members of each body is present. (2) '.rhe person who is applying for the loan is not entitled to be present or to vote at the joint meeting.

(3) The loan shall not be granted unless it is approved by two-thirds of all the members present at the joint meeting.

(4) A person who is a member of the board of directors and a member of the credit committee has only one vote. 5. Name of fund changed, and the minimum fund requirements for bad loan exposure is related to outstanding loans:

Section 41 presently reads: 2 Reserve Fund 41.

(1) Subject to subsection (2), the board of directors shall set aside as a reserve fund (

a) all entrance fees and fines collected from members, and (

b) at the end of each fiscal year before the declaration of a divi dend, such portion of the net earnings of the credit union as shall be necessary to provide adequate reserves for delinquent loans in accordance with such scale as may be provided in the standard by-laws.

(2) Where at the close of any fiscal year, the amount of the reserve fund is equal to at least ten per cent of the total of shares and deposits held by the credit union, the directors may, with the consent of the Supervisor, direct that no moneys other than fees and fines be set aside for the reserve fund for that year.

(3) The reserve fund shall be held as a reserve against bad loans only and shall not be distributed except on general liquidation of the assets of the credit union. (3a) Subject to the standard by-laws, a credit union shall, if required by the Supervisor or his appointee, write off any overdue loan against the reserve fund.

(4) Every credit union shall invest five per cent of its net earnings in the credit union stabilization fund established pursuant to

section 79.

6. Se'ction 58, subsection (1) is amended (

a) as to clause (

b) by adding at the end thereof the word "or", (

b) by adding after clause (

b) the following clause: (

c) appoint an administrator to reorganize, man age and supervise the affairs of the credit union for such period of time as the Super visor, in his discretion, may direct, and an administrator may exercise such powers and shall perform such duties as the Supervisor vests in or imposes upon him.

Section 80 is amended by striking out subsection (2) and by substituting the following:

(2) The Supervisor, in his discretion, may issue a certificate of authority for the purposes of subsection (1) to a credit union incorporated ill another province or territory of Canada where any members of the credit union own land within Alberta, whether or not they live in Alberta. 8. This Act comes into force on the day upon which it is assented to. 3

6. This amendment gives the Supervisor another alternative where he finds a credit union operating under dangerous or poten tially dangerous conditions.

Section 58 (1) pre.sently reads: 58.

(1) If it appears to the Min'.ster upon the report of the Supervisor made after an inquiry by him under this Act, that the affairs of the credit union are being mismanaged or are being conducted upon an unsound basis, the Supervisor, with the approval of the Minister, may (

a) appoint a liquidator to wind up the affairs of the credit union and upon completion of the liquidation, cancel its incorporation, or (

b) notify the credit union that unless its affairs are reorganized to the satisfaction of the Supervisor within ninety days, or such longer period as the Supervisor may from time to time prescribe, a liquidator will be appointed to wind up its affairs and upon completion of the liquidation the incorporation of the credit union will be cancelled. 7. The close proximity stipulation is re.moved.

Section 80 pres ently reads: 80.

(1) If it holds a certificate of authority issued by the Supervisor under this section, a credit union that (

a) is not incorporated in Alberta, and (

b) is not registered under The Companies Act as a foreign com- pany, is capable of acquiring and holding lands or any interest therein within Alberta and capable of registering any title thereto under The Land Titles Act.

(2) The Supervisor, in his discretion, may issue a certificate of authority for the purposes of subsection (1) to a credit union incor porated in another province or territory of Canada where (

a) the credit union is carrying on business in close proximity to the Alberta boundary, and (

b) aay members of the credit union own land within Alberta, whether or not they live in Alberta.

(3) A certificate of authority issued under this

section does not authorize the credit union to carryon business in Alberta. 3 Title: 1968 (16th, 1st) Bill 36,

An Act to amend The Credit Union Act

Document details

Collection	Alberta — Bills
Citation	L16 S1 4487
Type	bill
Volume / chapter	L16 S1 4487
Language	en
Format	json
Source	PROVINCIAL
Identifier	1d46915f02e39baf08267a14ebc235b189e46180

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