781755088/96082/tlc96082_f

E4tlc96082

Interpretation

Definitions

In this Act:

auditor includes a partnership of auditors;

Authority means the BC Financial Services Authority established under

section 2 of the Financial Services Authority Act ;

auxiliary member means a person who is an auxiliary member of a credit union under

section 46;

business authorization means an authorization to carry on

deposit business, or

both deposit business and trust business,

issued or deemed to be issued under Division 1 of

Part 3 of the Financial Institutions Act to a credit union;

capital base has the same meaning for the purposes of this Act as it has under the Financial Institutions Act ;

central credit union means a credit union in which membership is restricted to credit unions, other corporations, public bodies or the Crown in right of Canada or British Columbia or in any other right;

charter includes

an Act, statute, ordinance, letters patent, certificate, declaration or other instrument or provision of law by or under which a corporation has been incorporated, amalgamated or continued, and also the corporation's memorandum, articles, constitution, rules, regulations or bylaws, agreement or deed of settlement;

child of a person includes the child of the person's spouse;

class meeting means a meeting of members or auxiliary members who hold equity shares of a particular class;

constitution means the document described in

section 6 (1) and includes the constitution of a credit union incorporated under the Credit Union Act , R.S.B.C. 1979, c. 79, or incorporated under a former Credit Unions Act ;

corporation means a company within the meaning of the Business Corporations Act , a body corporate, a body politic and corporate, an incorporated association or a society, however and wherever incorporated, but does not include a municipality or a corporation sole;

credit union means a corporation incorporated as a credit union under this Act, the Credit Union Act , R.S.B.C. 1979, c. 79, or a former Credit Unions Act , and includes a central credit union and a credit union continued into British Columbia under

section 15.1, but does not include a credit union continued under the laws of another jurisdiction under

section 15.2;

debenture includes an instrument, secured or unsecured, issued by a credit union which instrument is

in bearer or registered form,

of a kind commonly dealt in on securities exchanges or markets, or commonly recognized in any area in which it is issued or dealt in as a medium for investment, and

evidence of an obligation or indebtedness of the credit union,

but does not include

a negotiable unsecured promissory note maturing not more than one year after the date of issue,

a receipt or another type of instrument issued by a credit union evidencing

a deposit, or

an annuity payment, or

an investment contract or mutual fund certificate;

debt obligation means a bond, debenture, note or other similar obligation, whether secured or unsecured, of a corporation;

deposit business means the business of receiving on deposit or soliciting for deposit money that is repayable

on demand,

after notice,

on the expiry of a specified term, or

at specified intervals for a specified term;

deposit insurance corporation means the Credit Union Deposit Insurance Corporation of British Columbia continued under the Financial Institutions Act ;

depositor means a person

who has money on deposit with a credit union, or

who holds non-equity shares in a credit union issued before January 1, 2020;

director includes every person, by whatever name designated, who performs functions of a director;

document means a written instrument, including a notice, order, certificate, register, letter, report, return, account, summons or legal process;

electronic meeting means a fully electronic meeting or a partially electronic meeting;

entity includes a corporation, trust, partnership, fund or other unincorporated association or organization, the Crown in right of Canada or of a province, a Crown agent, a foreign government and an agency of a foreign government, but does not include an individual;

equity share means a share in a credit union that represents an equity interest in a credit union;

extraprovincial credit union means a credit union incorporated by or under the laws of a jurisdiction other than British Columbia and that is, under those laws, licensed, registered or in any way authorized to carry on activities that are substantially the same as trust business or deposit business or both;

fair market value means the amount, price, consideration or rent that would be obtained in an arm's length transaction in the open market between willing parties acting in good faith;

financial statements includes any notes to the financial statements;

fully electronic meeting means a meeting in which persons are entitled to participate solely by telephone or other communications medium, as set out in the notice for the meeting, if all persons attending the meeting are able to participate in it, whether by telephone or other communications medium;

fund means the fund continued under

section 267 of the Financial Institutions Act ;

general insurance means insurance that is not life insurance;

general meeting means a general meeting of members;

insolvent includes the inability of a credit union to pay its debts as they become due in the usual course of the credit union's business;

member means a person who has been admitted to membership or junior membership in a credit union and whose name is entered in its register of members, but does not include a person who is an auxiliary member;

membership shares means the shares of a distinct class of equity shares that, under

section 44 (2) or (3), are the membership shares in a credit union;

mortgage includes a secured debt obligation;

non-equity share means a share in a credit union that

evidences indebtedness of the credit union to the holder of the share, and

does not represent an equity interest in the credit union;

ordinary resolution means a resolution passed by the members of a credit union in general meeting by a simple majority of the votes cast by members;

partially electronic meeting means a meeting in which persons are entitled to participate in person or by telephone or other communications medium, as set out in the notice for the meeting, if all persons attending the meeting are able to participate in it, whether by telephone, by other communications medium or in person;

printed includes lithographed or reproduced by any mechanical, electrostatic or photostatic means;

proxy means a completed and executed form of proxy by which a member or auxiliary member has appointed a person as the nominee of the member or auxiliary member to attend and act for the member or auxiliary member and on behalf of the member or auxiliary member;

public body means

a municipality or regional district,

[Repealed 2003-52-45.]

the Municipal Finance Authority of British Columbia under the Municipal Finance Authority Act ,

a government body under the Financial Administration Act , or

a board, commission, authority or similar body established or authorized under

an Act to administer, regulate, manage or undertake the operation of schools, libraries, hospitals, health facilities, irrigation systems, drainage systems, water supply systems, local improvements or public utilities, or to regulate or facilitate the regulation of agricultural and other natural products marketing, or to levy or raise taxes under the authority of

an Act;

registrar , except in

section 61.2, has the same meaning as in the Business Corporations Act ;

rules means the rules described in

section 7 and includes the rules of a credit union incorporated under the Credit Union Act , R.S.B.C. 1979, c. 79, or incorporated under a former Credit Unions Act ;

security instrument means security as defined in

section 1 of the Securities Act ;

senior officer means each of the 5 highest paid officers of a credit union and includes an individual who, whether or not among the 5 highest paid officers,

is the chair or a vice chair of the board of directors or the president, a vice president, the secretary, the treasurer or the general manager of the credit union, or

performs functions of the credit union similar to those normally performed by an individual occupying any of the offices described in paragraph (a);

series meeting means a meeting of members or auxiliary members who hold equity shares, other than membership shares, of a particular series;

special resolution means a resolution of which the notice required under

section 78 has been given, and,

in respect of a credit union other than a central credit union, or in respect of a central credit union the rules of which do not provide for that category of resolution as set out in

section 92 (1.1), a resolution of the credit union or central credit union, passed by a majority of not less than 2/3 of the votes cast by members who are entitled to vote and,

if the rules of the credit union provide as set out in

section 72 or 73, who vote by any of the methods permitted under those rules, or

if the rules of the credit union do not provide as set out in

section 72 or 73, who vote at a general meeting

personally,

through a representative who is present, if permitted by

section 70 (3), or

by a delegate who is present, if, in the case of a central credit union, the rules of the central credit union provide as set out in

section 92 (1) (

b) for voting by delegates, or

in respect of a central credit union the rules of which provide for that category of resolution as set out in

section 92 (1.1), a resolution of the central credit union, passed as permitted under those rules by a majority of votes that are cast by members who are entitled to vote and,

if the rules of the central credit union provide as set out in

section 72, who vote by any of the methods permitted under those rules, or

if the rules of the central credit union do not provide as set out in

section 72, who vote at a general meeting

personally,

through a representative who is present, if permitted by

section 70 (3), or

by a delegate who is present, if the rules of the central credit union provide as set out in

section 92 (1) (

b) for voting by delegates;

special rights or restrictions includes special rights and restrictions, whether preferred, deferred or otherwise, and whether in regard to redemption or return of capital, conversion into or exchange for the same or any other number of any other kind, class or series of shares, dividend, voting, nomination or appointment of directors or other control, or otherwise, and for the purposes of this definition the words special rights and the word restrictions , when used in this Act, whether together or separately, have a corresponding meaning;

spouse means a person who

is married to another person, or

is living with another person in a marriage-like relationship;

superintendent means the Superintendent of Financial Institutions appointed under the Financial Institutions Act ;

tribunal means the Financial Services Tribunal under the Financial Institutions Act ;

trust business means the business of providing or offering to provide services to the public as any of the following:

trustee, executor or administrator;

guardian of a minor's estate;

committee, under the Patients Property Act , of a mentally disordered person's estate;

attorney under

Part 2 of the Power of Attorney Act ;

representative granted power over an adult's financial affairs under

section 7 (1) (

b) of the Representation Agreement Act .

2) to (4

[Repealed 2011-29-19.]

Repealed

[Repealed 2011-29-20.]

Credit union relationships

2.1

In this section, voting share means a share of a class or series of shares of a corporation that carries the right to vote under all circumstances on a resolution electing directors, and includes a share of a class or series of shares of a corporation that carries the right to vote on such a resolution because of the occurrence of a contingency that has occurred and is continuing.

For the purposes of this Act, one corporation is affiliated with another corporation if

one of them is a subsidiary of the other,

both of them are subsidiaries of the same corporation, or

each of them is controlled by the same person.

For the purposes of this Act,

an affiliate of a credit union is deemed to be affiliated with all corporations with which the credit union is affiliated, and

a credit union is deemed to be affiliated with all corporations with which an affiliate of the credit union is affiliated.

A reference to "subsidiary" in this Act must be read as including a corporation other than a central credit union or a corporation designated by regulation, if the corporation is controlled, within the meaning of subsection (5), by

a credit union and one or more other credit unions, or

a credit union and one or more other credit unions, and one or more other corporations if each of the other corporations is controlled by one or more credit unions,

and "holding credit union" has the corresponding meaning.

For the purpose of subsection (4), a corporation is controlled by a group described in subsection (4) (

a) or a group described in subsection (4) (b), as the case may be,

more than 50% of the voting shares in the corporation are held, other than by way of security only, by or for the benefit of that group, and

the votes carried by those voting shares are sufficient, if exercised, to elect a majority of the directors of the corporation, or

the charter of the corporation provides that the majority, or

the corporation is party to an agreement or arrangement under which the majority

of the corporation's directors must be nominees of that group.

Notice by mail

2.2

If a notice, statement or report is sent by post, service or delivery of it is deemed to be effected by properly addressing, prepaying and mailing the notice, statement or report, and the service or delivery is deemed to have been effected on the 5th day, Saturdays and holidays excepted, following the date of mailing, unless the rules of a credit union provide for a longer period of time.

If, on 3 consecutive occasions, the records sent by a credit union to a member or auxiliary member in accordance with subsection (1) are returned, the credit union is not required to send any further records to the member or auxiliary member until the member or auxiliary member informs the credit union in writing of the member's or auxiliary member's new address.

Repealed

3-5

[Repealed 2011-29-20.]

Incorporation and Significant Changes

Incorporation

Application for incorporation

Subject to this Division, 25 or more persons who

propose to form a credit union for the purpose of carrying on deposit business or both deposit business and trust business,

complete an application in the prescribed form, and

file the completed application with the superintendent,

may form a credit union by

subscribing to a constitution prepared in accordance with subsection (2),

meeting the requirements of

section 40 (1) if a common bond of membership is adopted, and

adopting rules prepared in accordance with

section 7.

The constitution must

be printed or typewritten,

be divided into paragraphs numbered consecutively,

contain the agreement of each subscriber to be a member of the credit union,

contain the restrictions, if any, other than those imposed under this Act or the Financial Institutions Act , on the business to be carried on by the credit union or on the powers of the credit union, and

be signed by every subscriber.

Rules

A credit union must have rules for its conduct.

The rules must be

printed or typewritten,

divided into paragraphs numbered consecutively, and

signed by every subscriber.

A credit union may, by its rules, adopt all or any of the prescribed model rules.

Registration documents

On the registrar receiving

the constitution,

the common bond of membership, if any,

the rules, and

a notice of the credit union's

registered office,

records office, and

iii

offices in which the credit union proposes to carry on business,

the registrar, subject to

section 11, must file the constitution, common bond of membership, if any, and rules and enter the name of the credit union in the register of financial institutions.

Effect of incorporation

8.1

The subscribers, together with other persons who become members of the credit union, are, on and from the date of incorporation mentioned in the certificate of incorporation, a credit union with the name contained in the constitution, capable immediately of exercising the functions of an incorporated credit union with the powers and with the liability on the part of the members provided in this Act.

Evidence of incorporation

On filing the constitution, common bond of membership, if any, and rules under

section 8, the registrar must

issue a certificate of incorporation showing that the credit union is incorporated under this Act, and

publish notice of the incorporation in the Gazette or in any other prescribed manner.

Effect of constitution and rules

9.1

A credit union and its members and auxiliary members are bound by the credit union's constitution and rules and by any alterations made to those records under this Act, to the same extent as if those records

had been signed and sealed by the credit union and by each member and auxiliary member, and

contained covenants on the part of each member and auxiliary member and the successors and personal or other legal representatives of each member and auxiliary member to observe the constitution and rules.

Conclusiveness of certificate

A certificate of incorporation is conclusive evidence that the credit union has been incorporated under this Act, under the Credit Union Act , R.S.B.C. 1979, c. 79, or under a former Credit Unions Act .

Authority's consent to incorporation

In this section, applicants means the subscribers applying to incorporate a credit union.

The registrar must not file the constitution and rules of a credit union or enter its name in the register of financial institutions without first receiving the consent of the Authority to the incorporation.

The Authority must not consent to the incorporation of a credit union unless

the applicants have

submitted to the Authority the proposed constitution, common bond of membership, if any, and rules of the proposed credit union, and

paid the prescribed fee,

the applicants have submitted to the Authority a plan

specifying the names and prescribed addresses of the individuals proposed by the applicants as the first directors and senior officers of the proposed credit union,

specifying whether the business proposed to be carried on by the proposed credit union is deposit business or both deposit business and trust business,

iii

specifying the services that the proposed credit union intends to offer to its members,

describing, in detail satisfactory to the Authority, the period within which the proposed credit union will meet the requirements for being issued a business authorization and specifying the preliminary activities, not being trust business or deposit business, that the proposed credit union proposes to carry on during that period, and

containing prescribed additional information,

the proposed constitution and rules comply with this Act and the regulations,

the Authority is satisfied that the preliminary activities set out in the plan under paragraph (

b) are appropriate and in compliance with this Act,

each of the proposed first directors and senior officers of the credit union has completed and submitted to the superintendent a personal information return in the form established by the superintendent that discloses the information required by the superintendent,

the applicants have satisfied the Authority that the proposed credit union intends to obtain, and will be able to obtain, a business authorization to enable it to offer to the public, within a reasonable time after the incorporation, the services set out in the plan under paragraph (b),

the applicants and proposed directors of the credit union are residents of British Columbia,

the proposed common bond of membership, if any, complies with this Act,

the applicants have satisfied the Authority that the proposed credit union will have both the financial and managerial capacity to properly carry on the business proposed to be carried on by it in compliance with this Act,

the Authority is satisfied that

the formation of the proposed credit union will be for the convenience and advantage of the members, and

the proposed credit union will be operated in a manner in which the investments and deposits of members will be safeguarded without likelihood of a claim on the fund, and

the Authority believes on reasonable grounds that it is not contrary to the public interest to consent to the incorporation.

[Repealed 2004-48-4.]

The superintendent may conduct an investigation and an applicant must provide to the superintendent information, verifications, forecasts of business operations or documents that the superintendent considers necessary in relation to the proposed incorporation.

Capacity and powers of credit unions

A credit union has the capacity and the rights, powers and privileges of an individual of full capacity.

Restricted businesses and powers

12.1

A credit union must not

carry on any business or exercise any power that the credit union is restricted by the credit union's constitution from carrying on or exercising, or

exercise any of its powers in a manner inconsistent with those restrictions in the credit union's constitution.

No act of a credit union, including a transfer of property, rights or interests to or by the credit union, is invalid merely because the act contravenes subsection (1).

Application to restrain

12.2

If a credit union contravenes or is about to contravene

section 12.1 (1), the Supreme Court may, on application by a member, an auxiliary member, a receiver, a receiver manager, a liquidator or a trustee in bankruptcy of the credit union,

restrain the credit union from doing

an act or transferring or receiving property,

make an order requiring compensation to be paid to the credit union or to any other party to a contract, and

if it appears that a contract has not been substantially performed by a party to the contract, make the order the court considers necessary.

Preliminary activities

A credit union that is incorporated but that does not have a business authorization must not undertake any activity other than an activity specified under

section 11 (3) (b) (iv) as a preliminary activity in the plan described in

section 11 (3) (b).

Until a credit union receives a business authorization, the credit union, in every written communication, advertisement and document in which the name of the credit union appears, must add the following immediately after the name: "(Not authorized)".

Credit union with no members

13.1

A credit union must not carry on business without a member but, if at any time the credit union carries on business without a member for more than 6 months, every director and officer of the credit union during the time that the credit union so carries on business is jointly and severally liable for the payment of the whole of the debts of the credit union contracted during that time.

Corporate name

A credit union that proposes or is authorized to carry on business must have and use a corporate name that includes the words "credit union", "caisse populaire" or "caisse d'économie".

The corporate name of a credit union must be reserved under

section 14.1 and is subject to the approval of the superintendent.

A person must not assume or use in British Columbia, or carry on any business in British Columbia under, a name that includes the words "credit union", "caisse populaire" or "caisse d'économie" or use any words in connection with the business of the person in a way likely

to deceive or mislead the public, or

to give a false impression that the person is a credit union.

Reservation of corporate name

14.1

A person wishing to reserve a corporate name for the purposes of this Act must apply to the registrar.

After receiving an application to reserve a corporate name under subsection (1), the registrar may reserve the corporate name for a period of 56 days from the date of reservation or any longer period that the registrar considers appropriate.

After receiving a request for the extension of a reservation of a corporate name, the registrar may, if that request is received before the expiry of that reservation, extend that reservation for the period that the registrar considers appropriate.

The registrar must not reserve a corporate name for the purposes of this Act unless the corporate name complies with the prescribed requirements and with the other requirements set out in this Act.

A corporate name of which the registrar for good and valid reasons disapproves contravenes the requirements set out in this Act.

Corporate name to be displayed

14.2

A credit union must display its corporate name in legible characters

at every office or place at which the credit union carries on business, in a conspicuous position,

in all notices and other official publications,

on all the credit union's contracts, business letters and orders for goods, and on all the credit union's invoices, statements of accounts, receipts and letters of credit, and

on all bills of exchange, promissory notes, endorsements, cheques and orders for money signed by the credit union or on the credit union's behalf.

If a credit union has a common seal, the credit union must have its corporate name engraved in legible characters on the common seal.

If an officer or director of a credit union, or a person on the credit union's behalf, knowingly permits the credit union not to display or use the credit union's corporate name as required by subsection (1) (a), (

b) or (

c) or by subsection (2), the officer, director or person, as the case may be, is personally liable to indemnify a purchaser or supplier of goods or services or a holder of any security of the credit union who suffers loss or damage as a result of being misled by that failure to display or use the corporate name.

If an officer or director of a credit union, or a person on the credit union's behalf, issues or authorizes the issue of any instrument referred to in subsection (1) (

d) that does not display the corporate name of the credit union, the officer, director or person, as the case may be, is personally liable to the holder of the instrument for the amount of the instrument, unless the instrument is duly paid by the credit union.

Other name

14.3

Subject to

section 14.2 and the regulations, a credit union may carry on business under or identify itself by a name other than its corporate name.

Repealed

[Repealed 2011-29-32.]

Significant Changes

Transfer of incorporation to British Columbia

15.1

Subject to this section, an extraprovincial credit union, if it appears to the registrar to be authorized to do so by the laws of the jurisdiction in which it is incorporated, may deliver to the registrar an instrument of continuation in duplicate continuing the extraprovincial credit union as if it had been incorporated under this Act.

The instrument of continuation must

set out prescribed matters,

be executed under seal and signed by an officer or director of the extraprovincial credit union and verified by a signed statement of the person signing the instrument of continuation, and

be accompanied by other material required by the registrar.

The instrument of continuation must make the amendments to the charter of the extraprovincial credit union that are necessary to make the instrument conform to the laws of British Columbia and may make other amendments permitted under this Act as if the extraprovincial credit union were incorporated under this Act as a credit union.

If the registrar receives from an extraprovincial credit union under subsection

(1) an instrument of continuation that complies with subsections (2) and (3),

the prescribed fees, and

the consent of the Authority and the deposit insurance corporation,

the registrar must file one duplicate of the instrument of continuation and issue to the extraprovincial credit union a certificate of continuation to which the registrar must affix the other duplicate.

The Authority must not consent under subsection (4) (

c) unless

the directors of the extraprovincial credit union have submitted to the Authority

the name and address of the extraprovincial credit union,

the financial statements of the extraprovincial credit union,

the constitution and rules proposed for the continued credit union, and

a plan for the continued credit union

specifying whether the business proposed to be carried on is deposit business or trust business or both deposit business and trust business,

specifying the services that the continued credit union intends to offer to the public,

III

describing in detail satisfactory to the Authority the period within which the credit union will meet the requirements for being issued a business authorization under the Financial Institutions Act and specifying the preliminary activities, not being deposit business or trust business, that the credit union proposes to carry on during that period, and

containing other information required by the Authority,

the Authority approves the constitution and rules submitted under paragraph (a), and

iii

each proposed director and senior officer of the continued credit union has completed and submitted to the superintendent a personal information return in the form established by the superintendent that discloses the information required by the superintendent, and

unless the Authority believes on reasonable grounds that it is in the public interest to consent to the continuation.

In addition to the requirements under subsection (5), the Authority must not give a consent referred to in subsection (4) (

c) unless satisfied that the extraprovincial credit union, in its primary jurisdiction as defined in

section 157 of the Financial Institutions Act , is licensed, registered or authorized to carry on deposit business or trust business.

On and after the date in a certificate of continuation issued to an extraprovincial credit union under subsection (4), this Act applies to the continued credit union to the same extent as if it had been incorporated under this Act as a credit union.

A business authorization that an extraprovincial credit union has immediately before the date that a certificate of continuation is issued to the extraprovincial credit union under this

section continues in force on and after that date, subject to a subsequent surrender of the business authorization, and to any amendment or the suspension, revocation or cancellation of the business authorization, under this Act.

Transfer of incorporation from British Columbia

15.2

A credit union, if authorized by

a special resolution,

the consent given by the Authority and the deposit insurance corporation for the purpose of this section, and

the laws of another jurisdiction,

may apply to the proper officer of that other jurisdiction for an instrument of continuation continuing the credit union as if it had been incorporated under the laws of that other jurisdiction.

A credit union ceases to be a credit union under this Act on and after the date on which it is continued under the laws of the other jurisdiction and the credit union must promptly file with the registrar and the superintendent a copy of the instrument of continuation certified by the proper officer of the other jurisdiction.

Effect of continuation

15.3

All rights of creditors against the property, rights and assets of an extraprovincial credit union continued under

section 15.1 as a credit union and all liens on its property, rights and assets are unimpaired by the continuation, and all debts, contracts, liabilities and duties of the credit union from then on attach to the continued credit union and may be enforced against it.

Business acquisition by asset transfer

A credit union (the "transferring credit union") may dispose of all or substantially all of its assets to another credit union (the "acquiring credit union"), but must not do so except in accordance with this section.

A transferring credit union that intends, or under

section 277 (2) (

d) of the Financial Institutions Act is ordered, to dispose of all or substantially all of its assets to an acquiring credit union, together with the acquiring credit union, must propose and submit to the Authority an asset transfer agreement that specifies the following:

the services that the acquiring credit union offers to its members and proposes to extend to members of the transferring credit union;

the common bond of membership, if any, proposed for the acquiring credit union on and after the disposition becomes effective;

the manner in which the issued and unissued shares of the transferring credit union will be exchanged for those of the acquiring credit union;

the fair market value of the equity shares of any class or series in the transferring credit union, or a method of determining the fair market value of those equity shares of any class or series, for the purpose of

section 24;

a description of any of the transferring credit union's assets that are not being disposed of to the acquiring credit union, together with a statement showing how those assets are to be disposed of;

a description of any of the transferring credit union's liabilities that are not being assumed by the acquiring credit union, together with a statement showing how those liabilities are to be dealt with;

that the date of disposition to the acquiring credit union is to be the date stipulated under subsection (7) by the Authority as the effective date of the asset transfer agreement.

On receiving a proposed asset transfer agreement submitted to the Authority, including one where the transferring credit union is acting under

section 17 through an administrator,

the Authority may consent to the proposed asset transfer agreement, or

if the Authority considers that the proposed asset transfer agreement is contrary to the interests of the transferring credit union, the acquiring credit union or the members of either, the Authority may refuse to consent to it.

If the Authority consents under subsection (3) to a proposed asset transfer agreement under which the transferring credit union is one that is not acting under

section 17 through an administrator, then this subsection applies to the transferring credit union, and it must

submit the proposed asset transfer agreement to its members for approval by special resolution, if it is a credit union that has issued no equity shares or has issued no equity shares other than the membership shares, or

submit the proposed asset transfer agreement

to its members for approval by special resolution, and

to the holders of each class or series of equity shares other than the membership shares for approval by a separate resolution of the holders of that class or series, requiring a majority of 2/3 of the votes cast,

if it is a credit union that has issued 2 or more classes or series of equity shares.

If a transferring credit union to which subsection (4) applies has provided in its rules as set out in

section 58 (2) respecting rights or special rights attached to its issued equity shares, then, on a separate resolution required under subsection (4) (b) (ii), each holder of equity shares in the class or series of equity shares in relation to which the vote is being held has one vote in respect of each equity share of that class or series of equity shares held by that holder.

If the members or the members and other equity shareholders, as the case may be, of a transferring credit union to which subsection (4) applies have approved the proposed asset transfer agreement in compliance with subsections (4) and (5), the transferring credit union may enter into the proposed asset transfer agreement, which, when executed by the transferring credit union and the acquiring credit union, must be delivered to the Authority together with a certified copy of each of any resolutions required in respect of a transferring credit union to which subsection (4) applies.

On being satisfied

as to the disposition of any assets not being disposed of under an asset transfer agreement, including one where the transferring credit union is acting under

section 17 through an administrator, and

that any liabilities that are not being assumed under the asset transfer agreement by the acquiring credit union have been adequately dealt with,

the Authority must stipulate, as the effective date of the asset transfer agreement, a date not earlier than the date the Authority receives the executed asset transfer agreement, and the Authority must deliver

the executed asset transfer agreement, and

a certified copy of each of any resolutions required under subsection

(4) to the registrar together with written notice of the stipulated effective date.

On receiving the executed asset transfer agreement, or the executed asset transfer agreement and a certified copy of each of any resolutions, delivered by the Authority under subsection (7), the registrar must

file the agreement or the agreement and a certified copy of each resolution, as the case may be,

issue a certificate of business acquisition showing that, on the effective date (to be put in the certificate) stipulated by the Authority under subsection (7), the acquiring credit union will have acquired the assets and assumed the liabilities of the transferring credit union and will carry on the business of both credit unions, and

publish in the Gazette or in any other prescribed manner notice of the business acquisition showing the name and registered office of the acquiring credit union, the name of the transferring credit union and the date of the business acquisition.

Business acquisition directed by Authority

an administrator of a credit union that is subject to the supervision of the superintendent has been appointed under

section 277 (2) (

a) of the Financial Institutions Act , and

the Authority, under

section 277 (2) (

d) of the Financial Institutions Act , orders the credit union (the "transferring credit union") to dispose of all of its assets, or part of its assets that constitutes substantially all of its assets, to another credit union ("the acquiring credit union"),

then, for the purpose of carrying out the order by means of an asset transfer agreement under

section 16, the administrator has the powers and duties of the transferring credit union, and

the administrator, together with the acquiring credit union, may propose and submit to the Authority the asset transfer agreement as required under

section 16 (2), and

subject to receiving the consent of the Authority under

section 16 (3), the transferring credit union, through its administrator, may enter into the proposed asset transfer agreement, which, when executed by the transferring credit union and the acquiring credit union, must be delivered to the Authority for the appropriate action under

section 16 (7).

For the purposes of a disposition of all or part of a credit union's assets and liabilities ordered by the Authority under

section 277 (2) (

d) of the Financial Institutions Act , the approval of the credit union's members and auxiliary members to the disposition is not required, despite anything in the credit union's constitution and rules.

Vesting in acquiring credit union

On and after the effective date put in a certificate of business acquisition issued under

section 16 (8) (b),

the rights, property and assets of the transferring credit union are transferred to and vested in the acquiring credit union,

the obligations and liabilities of the transferring credit union, including any obligations to members and auxiliary members under

section 24,

are transferred to and assumed by the acquiring credit union,

become the obligations and liabilities of the acquiring credit union, and

iii

become enforceable against the acquiring credit union as if it had incurred them,

each member and auxiliary member of the transferring credit union and of the acquiring credit union is bound by the asset transfer agreement, and

each member of the transferring credit union becomes a member of the acquiring credit union and remains one until the member's membership ceases in accordance with

section 45, 47, 48 or 49, or the rules of the acquiring credit union.

Dissolution of transferring credit union

On the effective date put in a certificate of business acquisition issued under

section 16 (8) (b), the registrar must strike the transferring credit union off the register and, on the registrar doing that, the transferring credit union is dissolved.

Amalgamation

Two or more credit unions (the "amalgamating credit unions") may amalgamate and continue as one credit union (the "amalgamated credit union"), but must not do so except in accordance with this section.

Amalgamating credit unions, including any ordered under

section 277 (2) (

d) of the Financial Institutions Act to amalgamate, together must propose and submit to the Authority an amalgamation agreement that

specifies

the name of the proposed amalgamated credit union,

iii

the manner of carrying the amalgamation into effect,

the names and prescribed addresses of the individuals proposed as the directors and senior officers of the proposed amalgamated credit union,

whether the business proposed to be carried on by the proposed amalgamated credit union is deposit business or both deposit business and trust business,

the services that the proposed amalgamated credit union intends to offer to its members,

vii

the common bond of membership, if any, of the proposed amalgamated credit union,

viii

the manner in which the issued and unissued shares of each amalgamating credit union will be exchanged for those of the amalgamated credit union, and

the fair market value of the equity shares of any class or series, or a method of determining the fair market value of the equity shares of any class or series, for the purpose of

section 24, and

contains

the constitution prepared in accordance with

section 6, and

the rules prepared in accordance with

section 7,

that are proposed as the constitution and rules of the amalgamated credit union.

On receiving a proposed amalgamation agreement submitted to the Authority, including one where one or more of the amalgamating credit unions is acting under

section 21 through an administrator,

the Authority may consent to the proposed amalgamation agreement, or

if the Authority considers that the proposed amalgamation agreement is contrary to the interests of one or more of the amalgamating credit unions or its or their members, the Authority may refuse to consent to it.

If the Authority consents under subsection (3) to a proposed amalgamation agreement under which any of the proposed amalgamating credit unions is one that is not acting under

section 21 through an administrator, then this subsection applies to that amalgamating credit union, and it must

submit the proposed amalgamation agreement to its members for approval by special resolution, if it is a credit union that has issued no equity shares or has issued no equity shares other than the membership shares, or

submit the proposed amalgamation agreement

to its members for approval by special resolution, and

to the holders of each class or series of equity shares other than the membership shares for approval by a separate resolution of the holders of that class or series, requiring a majority of 2/3 of the votes cast,

if it is a credit union that has issued 2 or more classes or series of equity shares.

If an amalgamating credit union to which subsection (4) applies has provided in its rules as set out in

section 58 (2) respecting rights or special rights attached to its issued equity shares, then, on a separate resolution required under subsection (4) (b) (ii), each holder of equity shares in the class or series of equity shares in relation to which the vote is being held has one vote in respect of each equity share of that class or series of equity shares held by that holder.

If the members or the members and other equity shareholders, as the case may be, of an amalgamating credit union to which subsection (4) applies have approved the proposed amalgamation agreement in compliance with subsections (4) and (5), that amalgamating credit union may enter into the proposed amalgamation agreement, which, when executed by each of the amalgamating credit unions, including any of them acting under

section 21 through an administrator, must be delivered to the registrar together with a certified copy of each of any resolutions required in respect of an amalgamating credit union to which subsection (4) applies.

On receiving the executed amalgamation agreement, or the executed amalgamation agreement and a certified copy of each of any resolutions, delivered under subsection (6), the registrar must

file the agreement or the agreement and a certified copy of each resolution, as the case may be,

issue a certificate of amalgamation showing that the amalgamating credit unions are amalgamated and the date of the amalgamation, which must not be earlier than the date the documents are received by the registrar, and

publish in the Gazette or in any other prescribed manner notice of the amalgamation showing the names of the amalgamating credit unions, the name of the amalgamated credit union, the address of its registered office and the date of the amalgamation.

Amalgamation directed by Authority

If,

an administrator of a credit union that is subject to the supervision of the superintendent has been appointed under

section 277 (2) (

a) of the Financial Institutions Act , and

the Authority, under

section 277 (2) (

d) of the Financial Institutions Act , orders the credit union (the "credit union ordered to amalgamate") to amalgamate with one or more other credit unions,

then, for the purpose of carrying out the order by means of an amalgamation agreement under

section 20, the administrator has the powers and duties of the credit union ordered to amalgamate, and

the administrator, together with the other amalgamating credit unions, may propose and submit to the Authority the amalgamation agreement required under

section 20 (2), and

subject to receiving the consent of the Authority under

section 20 (3), the credit union ordered to amalgamate may enter into the proposed amalgamation agreement through its administrator, and, when executed by each of the amalgamating credit unions, the agreement must be delivered to the registrar in accordance with

section 20 (6).

For the purposes of an amalgamation ordered by the Authority under

section 277 (2) (

d) of the Financial Institutions Act , the approval of the members or auxiliary members of the credit union ordered to amalgamate to the amalgamation is not required, despite anything in the constitution and rules of the credit union ordered to amalgamate.

No interruption in business on amalgamation

On an amalgamation under

section 20, the amalgamated credit union

may carry on business under the business authorization issued with respect to one of the amalgamating credit unions, as the Authority may direct, until the amalgamated credit union has been granted a new business authorization under

section 61 of the Financial Institutions Act , and

has 30 days in which to apply under

section 61 (4) of the Financial Institutions Act for a new business authorization.

Vesting on amalgamation

On and after the date of the amalgamation shown in a certificate of amalgamation issued under

section 20 (7) (b),

the amalgamating credit unions are amalgamated and are continued as one credit union under the name and with the constitution and rules provided in the amalgamation agreement,

the amalgamated credit union is seized of and holds and possesses all the property, rights and interests and is subject to all the debts, liabilities and obligations of each amalgamating credit union, including any obligations to members or auxiliary members under

section 24, and

every member and auxiliary member of each amalgamating credit union is bound by the amalgamation agreement.

Right to redeem equity shares on business acquisition or amalgamation

a transferring credit union, including one acting under

section 17 through an administrator, enters into an asset transfer agreement under

section 16, or

an amalgamating credit union, including one acting under

section 21 through an administrator, enters into an amalgamation agreement under

section 20,

the transferring credit union or amalgamating credit union, as the case may be, must deliver immediately to

each member holding equity shares in the transferring credit union or amalgamating credit union, other than membership shares, and

each auxiliary member, if any, of the transferring credit union or amalgamating credit union

a notice advising the member or auxiliary member of the rights under this

section of the member or auxiliary member.

1.1

A notice under subsection (1) may be delivered

by prepaid post to the latest address shown for the recipient on the register of members and auxiliary members, or

in any other manner agreed to by the intended recipient.

On receiving the notice under subsection (1), the member or auxiliary member is entitled to require that the acquiring credit union or amalgamating credit union, as the case may be, purchase all of the member's or auxiliary member's equity shares.

In order to exercise the right conferred by subsection (2), the member or auxiliary member must deliver to the registered office of the acquiring credit union or the amalgamating credit union, as the case may be, within 14 days after the date of the notice under subsection (1), a notice requiring the acquiring credit union or amalgamating credit union to purchase all of the member's or auxiliary member's equity shares.

If a member or auxiliary member exercises the right conferred by subsection (2) in accordance with subsection (3), the member or auxiliary member is obliged to sell all of the member's or auxiliary member's equity shares to the acquiring credit union or the amalgamating credit union, and the credit union is obliged to purchase them, at the fair market value determined under the asset transfer agreement entered into under

section 16 or the amalgamation agreement entered into under

section 20, as the case may be.

A member or auxiliary member who exercises the member's or auxiliary member's right under subsection

(2) must not withdraw the requirement to purchase the equity shares, unless the credit union consents to the withdrawal, and

until paid in full, may exercise and assert all the rights of a creditor of the credit union.

If a member or auxiliary member exercises the member's or auxiliary member's right under subsection (2) but the credit union is prohibited under

section 64 (8) from purchasing equity shares issued by the credit union, the credit union remains obligated under this

section to purchase the member's or auxiliary member's equity shares and must purchase them as soon as no longer prohibited from doing so under

section 64 (8).

A credit union may apply the purchase price for equity shares it must purchase under this section, and any declared but unpaid dividends on those equity shares, in satisfaction of indebtedness owed to the credit union by the person to whom the purchase price and dividends are due, and then the credit union must pay any balance to the person.

A credit union must not exercise its right under subsection (7) in respect of jointly held equity shares or dividends on them

except with the consent of each of the joint holders, or

unless each of the joint holders is indebted to the credit union.

Repealed

25-39

[Repealed 2011-29-36.]

2.1

Winding Up

Voluntary Winding Up

Voluntary winding up requires special resolution

25.1

Subject to sections 25.2 and 25.3, a credit union may be wound up voluntarily if the credit union so resolves by special resolution.

Solvency of credit union for voluntary winding up

25.2

If it is proposed to wind up a credit union voluntarily, the majority of the directors, before calling the general meeting at which the special resolution for the winding up of the credit union is to be proposed, must make an affidavit declaring that

they have made a full inquiry into the affairs of the credit union, and

they are of the opinion that the credit union will be able to pay its debts in full within the period, not exceeding 12 months from the commencement of the winding up, specified in the affidavit.

An affidavit referred to in subsection (1) must

be made within 5 weeks before the date on which the members pass the special resolution for the voluntary winding up of the credit union, and

contain a statement of the assets and liabilities of the credit union as at the latest practicable date.

A copy of the affidavit must be

filed with the registrar before the meeting, and

presented to the meeting at which the special resolution for the voluntary winding up of the credit union is to be proposed.

If a credit union is wound up in accordance with a special resolution passed within 5 weeks after the making of the affidavit, but the credit union's debts are not paid or provided for in full within the period stated in the affidavit, it is presumed, until the contrary is shown, that the person swearing the affidavit did not have reasonable grounds for the person's opinion.

Notice must be given to superintendent

25.3

A special resolution under

section 25.1 has no effect unless 30 days' notice in writing of the credit union's intention to pass the resolution has been given to the superintendent.

Commencement of voluntary winding up

26.1

A voluntary winding up commences when the special resolution to wind up is passed.

Appointment of liquidator

26.2

If a credit union passes a special resolution to wind up voluntarily under

section 25.1, the credit union must promptly deliver written notice of the special resolution to the superintendent.

On receipt by the superintendent of notice under subsection (1), the superintendent must appoint one or more liquidators, who may be an employee or employees of the Authority, for the purpose of winding up the affairs and distributing the assets of the credit union.

Remuneration of liquidator

26.3

The remuneration of a liquidator in a voluntary winding up of a credit union must be set by the superintendent.

Winding Up by Court Order

Winding up by court order

27.1

A credit union may be wound up by an order of the Supreme Court on the application of

the credit union,

a member or an auxiliary member,

a beneficial owner of an equity share in the credit union,

a director, creditor, trustee for debentureholders or receiver manager of the credit union,

the superintendent, or

any other person who, in the discretion of the Supreme Court, is a proper person to make an application.

Before hearing an application by a creditor to wind up a credit union by court order, the Supreme Court may require the creditor to give security for the costs of the application.

The Supreme Court may order that the credit union be wound up

if the court thinks it just and equitable to do so, or

when an event occurs on the occurrence of which the constitution or rules provide that the credit union is to be dissolved.

The superintendent is party to any proceedings in which an application is made to the Supreme Court under this section.

Commencement of winding up by court order

27.2

A winding up by court order commences on the date of the order.

Court must appoint liquidator

27.3

If the Supreme Court makes an order that a credit union be wound up, the court, by the same or a subsequent order, must appoint one or more liquidators for the purpose of winding up the affairs and distributing the assets of the credit union.

Remuneration of liquidator

28.1

The remuneration of a liquidator in a winding up by court order must be set by the Supreme Court.

Winding Up by Authority

Winding up directed by Authority

28.2

If, under

section 277 (2) (

d) of the Financial Institutions Act , the Authority orders that a credit union that is subject to the superintendent's supervision be wound up, then

sections 25.1, 25.2, 26.1 and 31.3 of this Act do not apply,

the winding up commences at the time of the order that the credit union be wound up,

the Authority must promptly appoint one or more liquidators, who may be the Authority's own employee or employees, for the purpose of winding up the affairs and distributing the assets of the credit union,

the Authority must promptly file with the registrar a copy of the order and notify the registrar of the appointment under paragraph (

c) of one or more liquidators, and

the Authority must promptly publish in the Gazette or in any other prescribed manner notice of its order that the credit union be wound up.

Remuneration of liquidator

28.3

The remuneration of a liquidator in a winding up of a credit union ordered under

section 277 (2) (

d) of the Financial Institutions Act must be set by the Authority.

Winding up on direction of Authority

29.1

If the Authority believes on reasonable grounds that it is contrary to the public interest that a credit union that has not been issued a business authorization continue in business, the Authority may order that the credit union be wound up.

Without limiting subsection (1), if a credit union

has fewer than 25 members,

has contravened

section 13,

has not applied for a business authorization within one year or the further period ordered by the superintendent under

section 61 (2) of the Financial Institutions Act after the date of its incorporation, or

is refused a business authorization,

the Authority may order that the credit union be wound up.

If the Authority makes an order under this section, the references in sections 27.2, 27.3, 28.1, 31.1 (2), 31.3 (1) (

b) and (3), 32.3 (1), 33.2 (3), 34.2 and 38.1 (3) to the Supreme Court or a court order must be read for the purposes of the winding up ordered by the Authority as references to the Authority or to an order of the Authority.

On the winding up of a credit union under this section, the registrar must publish in the Gazette or in any other prescribed manner notice that the credit union is being wound up and the date of the winding up order.

The cost of the publication under subsection (4) must be paid by the credit union to the government and is recoverable by the government from the credit union as a simple contract debt.

Effect of Winding Up

Effect of resolution or order for winding up

29.2

If a credit union is being wound up,

the credit union, from the commencement of the winding up, must cease to carry on the credit union's business, except so far as is required, in the opinion of the liquidator, for the credit union's beneficial winding up, but the corporate status and corporate powers and capacity of the credit union continue until the credit union is dissolved,

on the appointment of the liquidator, the powers of the directors cease, except so far as the liquidator approves their continuance, and

any transfer of shares made after the commencement of the winding up, except a transfer made to or with the approval of the liquidator, is void.

Examination of credit union winding up

29.3

The superintendent may at any time examine the records of a credit union that is being wound up.

Powers of Supreme Court

30.1

If a credit union is being wound up, the Supreme Court may,

on application by a member, an auxiliary member or director of the credit union, order a general meeting, class meeting, series meeting or meeting of the creditors of the credit union to be held and conducted in the manner the court considers appropriate,

on application by any of the persons mentioned in

section 27.1 (1), make an order for the audit or the inspection of the accounts, books and papers of, or in possession of, the liquidator that the court considers appropriate,

on application by the liquidator, set a time within which creditors are to prove their debts or claims or be excluded from the benefit of any distribution to be made by the liquidator,

in a voluntary winding up, appoint a liquidator on application by a member or an auxiliary member if

there is no liquidator acting, and

it is impractical or impossible to hold a general meeting of the credit union for the purpose of filling the vacancy,

on cause shown by any of the persons mentioned in

section 27.1 (1), remove a liquidator and fill any vacancy in the office of the liquidator,

resigned,

been removed from office, or

iii

in the liquidator's opinion, fully wound up the affairs of the credit union,

on application by any of the persons mentioned in

section 27.1 (1), confirm, reverse or modify any act or decision of a liquidator and make any order the court considers appropriate,

if a liquidator does not faithfully perform the liquidator's duties, inquire into the matter and take the action the court considers appropriate,

on application by any of the persons mentioned in

section 27.1 (1),

examine into the conduct of any person who has taken

part in the formation or promotion of the credit union or any person who is a past or present director, officer, receiver, receiver manager, liquidator, member or auxiliary member of the credit union if it appears that that person

has misapplied, retained or become liable or accountable for any money or property in relation to the credit union, or

has become liable or accountable for any breach of trust in relation to the credit union, and

compel the person referred to in subparagraph (

i) to repay or to restore the money or property, or any part of the money or property, with interest at the rate the court considers appropriate, or to contribute the sum to the assets of the credit union by way of compensation in respect of the misapplication, retainer or breach of trust as the court considers appropriate,

and this provision applies even if the conduct complained of is conduct for which the person may be liable to prosecution,

on application by the liquidator, give directions in relation to any matter arising under the winding up.

Additional powers of Supreme Court

30.2

The Supreme Court's powers under

section 30.1 in respect of the winding up of credit unions include the power to extend any time limited by this Act for the filing or publishing of notices, accounts, reports or documents or for the holding of any meeting.

Duty to assist liquidator

30.3

A person who is a present or former director, receiver manager, officer, employee, banker, auditor, member, auxiliary member or agent of, or is a present or former receiver of property of, a credit union that is being wound up or of any affiliate of it must,

on inquiry by the liquidator, fully and truly inform the liquidator, to the best of the person's knowledge and belief, of all the property of the credit union, and how, to whom, for what consideration and when the credit union disposed of any part of the property, except any part disposed of in the ordinary course of business of the credit union,

on request of the liquidator, deliver to the liquidator, or as the liquidator directs, all the property of the credit union in the custody or under the control of the person, and

on request of the liquidator, deliver to the liquidator, or as the liquidator directs, every record, including every document, instrument and accounting record, in the custody or under the control of the person and belonging to the credit union.

Liquidators

Qualification of liquidator

31.1

A person not qualified to become or act as a receiver or receiver manager under

section 64 of the Personal Property Security Act is not qualified to become or act as a liquidator, except that, with the consent in writing of all the members and auxiliary members of a credit union, a person referred to in

section 64 (2) (

e) of the Personal Property Security Act is qualified to become or act as a liquidator of the credit union.

A person who has been appointed as a liquidator in a winding up by court order and who is not, or who ceases to be, qualified to act as a liquidator must promptly bring the disqualification to the attention of the Supreme Court and the person on whose application the liquidator was appointed.

Validity of acts of liquidator

31.2

An act of a liquidator is valid, despite any defect in the liquidator's appointment or qualifications.

Filing and publication of notice of appointment

31.3

A liquidator must, within 10 days after the liquidator's appointment as liquidator, file with the registrar

a notice of the appointment in the form established by the registrar, and

if not already filed,

if the winding up is a voluntary winding up, a certified copy of the special resolution to so wind up, or

if the winding up is by court order, a certified copy of the order.

A liquidator must, within 7 days after changing the liquidator's address, file with the registrar notice of the new address.

At the commencement of the winding up, the liquidator must publish in the Gazette notice that the credit union has resolved to wind up voluntarily or that the Supreme Court has made an order that the credit union be wound up by court order, as the case may be.

Meeting of creditors

32.1

A liquidator must, within 14 days after the liquidator's appointment as liquidator,

mail to every person who appears to the liquidator to be a creditor of the credit union a notice that a meeting of the creditors of the credit union will be held on a date, being not less than 21 days and not more than 28 days after the appointment, at an hour and, if applicable, at a place in British Columbia specified in the notice, and

advertise notice of the meeting

in the Gazette, and

in a local newspaper circulating in the district where the registered office is located or where the principal place of business of the credit union in British Columbia was located.

1.1

If the meeting of creditors is an electronic meeting, the notices referred to in subsection (1) (

a) and (

b) must also contain instructions for attending and participating in the meeting by telephone or other communications medium.

The liquidator must present to the meeting of creditors referred to in subsection (1) a full statement of the position of the affairs of the credit union, including a list of the creditors of the credit union and the estimated amount of their claims, and the creditors are at liberty to discuss any matter arising out of the statement.

Creditor must commence action on claim

32.2

If the liquidator of a credit union gives notice in writing by registered letter to a creditor of the credit union that the debt or claim of the creditor is disputed or rejected, the creditor may commence an action in respect of the debt or claim within 3 months after the notice is given, and, in default of the commencement of the action within that time, the debt or claim of the creditor is forever barred.

Custody of property

32.3

The liquidator of a credit union, subject to any restrictions or directions imposed or given by the Supreme Court, must

take into the liquidator's custody or under the liquidator's control all the property and things in action to which the credit union is or appears to be entitled, and all the credit union's records, documents and instruments,

use, subject to this Act, the liquidator's own discretion in realizing the assets of the credit union and distributing them among the creditors, members and auxiliary members,

keep proper accounting records,

keep proper minutes of proceedings at meetings and of other matters relating to the winding up,

cause to be stated on every invoice, order for goods and business letter

issued by the liquidator or on the liquidator's behalf, and

on or in which the name of the credit union appears

that the credit union is in liquidation, and

describe themselves as the liquidator of the credit union.

If a winding up continues for more than one year, the liquidator must

call a general meeting of the credit union at the end of the first year and at the end of each succeeding year after the commencement of the winding up, or as soon as may be convenient,

present to the general meeting an account of the liquidator's acts and dealings and of the conduct of the winding up during the preceding year, and

file with the registrar, within 7 days after the date on which the meeting is held, a verified

summary of the liquidator's receipts and payments during that year.

A liquidator must comply with

Part 2.2 in respect of the records, documents and instruments of the credit union.

Liquidator to notify superintendent of offence

33.1

If it appears to the liquidator of a credit union that any past or present director, officer, employee, receiver, receiver manager, auditor, liquidator, member or auxiliary member of the credit union has been guilty of any offence in relation to the credit union, the liquidator must notify the superintendent.

Powers of liquidator

33.2

Subject to this section, a liquidator, so far as may be necessary for the beneficial winding up of the affairs and distribution of the assets of a credit union, has the powers of the directors and officers, and may exercise the powers of the credit union that are not required by this Act to be exercised by the credit union in general meeting.

In a voluntary winding up, the credit union, by ordinary resolution, may direct that the liquidator not do certain specified things without

the approval of a general meeting of the credit union,

the written consent of certain specified members or specified auxiliary members, or

the written consent of a certain specified number of members or auxiliary members.

In any winding up, the Supreme Court may impose, either generally or with respect to certain matters, restrictions on the exercise of the powers of a liquidator.

Until required for distribution, cash balances held by the liquidator of a credit union may be invested as follows:

in an interest bearing account with any savings institution;

as permitted under the provisions of the Trustee Act respecting the investment of trust property by a trustee,

and any dividends or interest received from the investments form part of the assets of the credit union.

If several liquidators are appointed, every power given to a liquidator may be exercised

by the one or more of them that may be determined at the time of their appointment or subsequently, or

in the absence of any determination, by any 2 or more liquidators.

Resignation and removal of liquidator

33.3

A liquidator appointed in a voluntary winding up of a credit union or a winding up of a credit union ordered under

section 277 (2) (

d) of the Financial Institutions Act may resign from that office.

If, in the opinion of the Authority,

a voluntary winding up of a credit union, or

a winding up of a credit union ordered under

section 277 (2) (

d) of the Financial Institutions Act

is being carried on in an unsafe or unauthorized manner or is being unduly delayed, the Authority, by notice addressed to the liquidator, may remove the liquidator from office.

If a vacancy occurs by death, resignation or otherwise in the office of liquidator in

a voluntary winding up of a credit union, or

a winding up of a credit union ordered under

section 277 (2) (

d) of the Financial Institutions Act ,

the Authority must appoint a liquidator to fill the vacancy.

Liquidator ceasing to act must file notice

34.1

A liquidator who resigns, is removed from office or for any other reason ceases to act, must, within 7 days after the resignation, removal or cessation, file with the registrar a notice in the form established by the registrar.

Filling vacancy in office of liquidator

34.2

If a vacancy in the office of the liquidator occurs by death, resignation or otherwise in a winding up by court order, the Supreme Court may fill the vacancy on application of any person mentioned in

section 27.1 (1).

Disposing of Assets of Credit Union

Liquidator's powers of disposition

34.3

In consideration of financial assistance by the deposit insurance corporation to the credit union, a liquidator of a credit union may transfer and assign all or any assets of the credit union to the deposit insurance corporation.

Sale of credit union for shares or debentures

35.1

If a credit union is being wound up and it is proposed to transfer or sell the whole or part of the credit union's business or property to a corporation, the liquidator of the credit union being wound up may, with the approval of a special resolution of that credit union that confers on the liquidator either a general authority or an authority in respect of any particular arrangement, in compensation or

part compensation for the transfer or sale,

receive shares, debentures or other similar interests in the corporation for distribution among the members or auxiliary members of the credit union being wound up, or

enter into any other arrangement by which the members or auxiliary members of the credit union being wound up may, instead of or in addition to receiving cash, shares, debentures or other similar interests, participate in the profits of or receive any other benefit from the corporation.

No special resolution referred to in subsection (1) is invalid for the purposes of this

section merely because the resolution is passed before or concurrently with a resolution for winding up the credit union or for appointing the credit union's liquidator.

Despite subsections (1) and (2), a liquidator of a credit union must not sell all or substantially all of the assets of the credit union to another credit union except in compliance with

section 16.

Satisfaction of liabilities on winding up

35.2

If a credit union is being wound up, any property of the credit union remaining after satisfaction of all liabilities of the credit union, including the costs of winding up and dissolution, is surplus property and must be dealt with in accordance with sections 35.3 and 36.1.

Distribution of surplus if credit union has not issued equity shares

35.3

If the credit union being wound up has not issued any equity shares, the liquidator must apply the surplus property as follows:

by declaring and paying a dividend, at a reasonable rate determined by the liquidator, on the non-equity shares in respect of the period from the beginning of the credit union's current fiscal year to the date of commencement of the winding up;

after payment of the dividend under paragraph (a), by paying or delivering the balance to the deposit insurance corporation.

Distribution of surplus if credit union has issued equity shares

36.1

If the credit union being wound up has issued equity shares, the liquidator must convert into money any surplus property that is not money, and then must apply the money as follows:

by declaring and paying a dividend, at a reasonable rate determined by the liquidator, on the non-equity shares in respect of the period from the beginning of the credit union's current fiscal year to the date of commencement of the winding up;

after payment of the dividend under paragraph (a), by distributing the balance to the equity shareholders according to their rights and interests in the credit union.

Members' or auxiliary members' indebtedness to credit union

36.2

The liquidator of a credit union may apply the amount of a dividend under

section 35.3 (

a) or of a dividend or distribution under

section 36.1 in satisfaction of indebtedness owed to the credit union by the member or auxiliary member to whom the amount is due, and then the credit union must pay any balance to the member or auxiliary member.

Unclaimed or undistributed assets

36.3

In this section, administrator has the same meaning as in the Unclaimed Property Act .

1.1

If a liquidator has or controls any unclaimed or undistributed assets or money of a credit union that is being wound up and the assets or money have remained unclaimed or undistributed for more than 6 months after the date on which any dividend, or other distribution of assets or money, declared by the liquidator became payable or distributable, the liquidator must publish in one or more newspapers selected by the liquidator a statement of

the assets or money unclaimed or undistributed,

the procedure required to claim the assets or money, and

the date, not sooner than 60 days after or later than 120 days after the publication, on which date the liquidator will deliver or pay

to the deposit insurance corporation any part of the assets or money apparently due to, but unclaimed by, members of the credit union, or

to the administrator any part of the assets or money apparently due to, but unclaimed by, auxiliary members or creditors of the credit union or other non-members of the credit union.

On the date published under subsection (1.1) (c), the liquidator must deliver or pay

to the deposit insurance corporation any part of the assets or money apparently due to, but unclaimed by, members of the credit union, or

to the administrator any part of the assets or money apparently due to, but unclaimed by, auxiliary members or creditors of the credit union or other non-members of the credit union,

together with a statement showing, to the extent known to the liquidator, the full names and last known addresses of the persons appearing to be entitled to the assets or money and the amount to which each appears to be entitled.

The receipt of the deposit insurance corporation for the assets or money referred to in subsection (2) (

a) or of the administrator for the assets or money referred to in subsection (2) (

b) is an effective discharge to the liquidator for them.

The administrator, in respect of assets paid or delivered to the administrator under this section, may realize any assets, and any money received or realized under this

section is deemed to be unclaimed money deposits under the Unclaimed Property Act .

the deposit insurance corporation, under subsection (2) (a), has received assets or money unclaimed by members of a credit union,

application is made to the deposit insurance corporation by or on behalf of a former member of the credit union, and

the deposit insurance corporation is satisfied that the former member was entitled to but did not receive

a dividend declared under

section 35.3 (

a) or 36.1 (

a) on non-equity shares in the credit union, or

a share of a distribution made under

section 36.1 (b),

the deposit insurance corporation must pay to that former member the amount of the dividend or share of the distribution, together with accrued interest at a reasonable rate determined by the deposit insurance corporation.

Completion of Winding Up

Final meeting and dissolution

37.1

As soon as the affairs of a credit union are fully wound up, the liquidator must

prepare an account of the winding up showing how the winding up was conducted and how the property of the credit union was disposed of, and

call a final general meeting of the credit union for the purpose of presenting the account and giving any explanation of the account.

The final general meeting referred to in subsection (1) must be called by publishing notice of the meeting in the Gazette not less than 14 days before the meeting, specifying the object, date and time and, if applicable, the place, and no other notice is necessary.

2.1

If the final general meeting is an electronic meeting, the notice must also contain instructions for attending and participating in the meeting by telephone or other communications medium.

The liquidator, not more than 7 days after the final general meeting, must file with the registrar a copy of the account and a return in the form established by the registrar.

Dissolution on completion of winding up

38.1

The registrar, on receiving the copy of the account and the return referred to in

section 37.1, must file them.

Three months after the filing referred to in subsection (1), the credit union is dissolved.

On application by the liquidator or by any person mentioned in

section 27.1 (1), the Supreme Court may make an order deferring the date on which the dissolution of the credit union is to take effect for the time the court considers appropriate.

No order made under this

section is effective unless a certified copy of the order is filed with the registrar before the credit union is dissolved under subsection (2).

Notice on dissolution

39.1

In addition to fulfilling the requirements of

section 37.1, the liquidator of a credit union,

not more than 14 days after the date of the final general meeting required under

section 37.1 (1), must publish in one or more newspapers selected by the liquidator a notice that the affairs of the credit union have been wound up, and

must file with the superintendent a copy of the account showing how the winding up has been conducted and how the property of the credit union has been disposed of, together with a copy of the newspaper notice.

Disposal of books and papers of credit union

39.2

If a credit union has been dissolved, the liquidator is responsible for the care and custody of the credit union's records, including documents, instruments and accounting records, for 2 years after the date of dissolution, but not longer.

Discharge by court order

39.3

An order of the Supreme Court releasing a liquidator discharges the liquidator from all liability in respect of any act done or default made by the liquidator in the administration of the affairs of the credit union or otherwise in relation to the liquidator's conduct in that capacity, but that order may be revoked on proof that it was obtained by fraud or by suppression or concealment of any material fact.

2.2

Offices and Records

Credit Union Offices

Registered and records offices

39.4

A credit union must, at all times, maintain a registered office and, for the purposes of

section 39.42, a records office, both in British Columbia and both at the locations set out in

the notice referred to in

section 8 (d), or

if a notice of change of address has been filed with the registrar, the latest filed notice of change of address.

The registered office and the records office may be located at the same place.

Change of registered or records office

39.41

The directors of a credit union may change the location of the credit union's registered office or records office in British Columbia by

passing a resolution authorizing the change, and

filing with the registrar 2 copies of a notice of change of address in the form established by the registrar.

No change in the location of the registered office or records office is effective until subsection (1) has been complied with.

When subsection (1) has been complied with, the registrar must forward to the previous registered office or records office one copy of the notice of change of address bearing evidence that the notice of change of address has been filed with the registrar.

If the registered office or records office is located at the place of business of a credit union's agent or solicitor and that agent or solicitor moves the agent's or solicitor's place of business to another location, the agent or solicitor must file with the registrar a notice of change of address, in the form established by the registrar, for each credit union having a registered office or records office at the agent's or solicitor's place of business, and subsections (1) to (3) do not apply.

A change in the location of the registered office or records office under subsection (4) is not effective until that subsection has been complied with.

Records

Records office documents

39.42

A credit union must keep at its records office the following records:

the credit union's certificate of incorporation;

a copy of the credit union's constitution including every amendment of it;

a copy of the credit union's rules including every amendment of them;

the credit union's register of directors;

the minutes of every general meeting, class meeting and series meeting of the credit union;

the minutes of every meeting of the credit union's directors;

a copy of every document filed by the credit union with the registrar;

a copy of every certificate issued to the credit union by the registrar;

a copy of every order of the superintendent or the Authority relating to the credit union unless the superintendent or the Authority, in that order or in another order, orders that that order need not be kept at the records office;

a copy of every order of the registrar relating to the credit union;

a copy of every other document and instrument approved in the preceding 10 years by the directors;

a copy of every mortgage created or assumed by the credit union, whether or not required to be registered;

a copy of all audited financial statements of the credit union and its subsidiaries, whether or not consolidated with the financial statements of the credit union, including the auditor's reports;

if the credit union is an amalgamated credit union,

every record, document or instrument described in paragraphs (

a) to (

d) and (

g) to (j),

every record, document or instrument described in paragraphs (f), (

k) and (l), and

iii

every record, document or instrument described in paragraphs (

e) and (

m) of each of the amalgamating credit unions;

if a receiver or receiver manager is appointed under an instrument filed in the office of the registrar, the name and address of the receiver or receiver manager, the date of the appointment of the receiver or receiver manager and the date the receiver or receiver manager ceases to act or completes the duties of that office.

Examination of records

39.43

A director of a credit union may examine and take extracts, without charge, from the credit union's records, documents and instruments referred to in

section 39.42, and a former director may examine and take extracts, without charge, from the credit union's records, documents and instruments referred to in

section 39.42 that relate to the time when the former director was a director.

A member, auxiliary member or debentureholder of a credit union may examine and take extracts, without charge, from the credit union's records, documents and instruments referred to in

section 39.42, except those referred to in paragraphs (f), (k), (

l) and (n) (ii).

A person may examine and take extracts from the credit union's records, documents and instruments referred to in

section 39.42, except those referred to in paragraphs (f), (k), (

l) and (n) (ii), on payment of $0.50 or a lesser sum the credit union prescribes, for each record, document or instrument examined.

The records, documents or instruments may be examined during normal business hours, but, in the case of examination by any person other than a director, the credit union may, by ordinary resolution, impose reasonable restrictions, provided that not less than 2 consecutive normal business hours in each day, Saturday and holidays excepted, are allowed for examination.

Copies

39.44

A person entitled to examine a record, document or instrument of the credit union under

section 39.43 is entitled to require the credit union to furnish the person with a copy on payment of a reasonable charge not exceeding the sum of $0.50 for every page copied.

Copy of constitution and rules for member

39.45

A member or auxiliary member of a credit union is entitled on request and without charge to a copy of the constitution and rules.

Form of records

39.46

Records and registers that are required by this Act or the Financial Institutions Act to be prepared and maintained by or on behalf of a credit union may be in a bound or looseleaf form, or entered or recorded by any system of mechanical or electronic data processing, or by any other information storage device from which the credit union is capable of reproducing, in a reasonable time, any required information in intelligible form.

Minutes that are required by this Act or the Financial Institutions Act to be kept by a credit union may be kept in any manner set out in subsection (1) for preparing and maintaining records and registers.

A credit union and its agents must take adequate precautions with respect to the records and registers required by this Act or the Financial Institutions Act to be prepared and maintained so as to

avoid loss, mutilation or destruction,

avoid falsification of entries, and

provide simple, reliable and prompt access.

Accounting Records

Accounting records required

39.47

A credit union must keep proper accounting records in respect of all financial and other transactions of the credit union, and, without limiting the generality of the foregoing, must keep records of

every sum of money received and disbursed by the credit union and the matters in respect of which the receipt and disbursement take place,

every sale and purchase by the credit union,

every asset and liability of the credit union, and

every other transaction affecting the financial position of the credit union.

Without limiting

section 133 of the Financial Institutions Act , the accounting records of a credit union must be kept at a place determined by the directors, but the registrar may order that the accounting records be kept in British Columbia.

The accounting records of a credit union must be open to the inspection of any director during the normal business hours of the credit union.

Subject to the rules or an ordinary resolution, the directors may determine to what extent, at which times and places and under what conditions the accounting records of the credit union must be open to the inspection of members or auxiliary members.

Financial Statements

Financial statements for members

39.48

A credit union, not less than 10 days before the date of its annual general meeting, must send a copy of the financial statements referred to in

section 74.1 and the auditor's report on the financial statements to the auditor and each member and auxiliary member

by prepaid post to the latest address shown for the recipient on the register of members and auxiliary members, or

in any other manner agreed to by the intended recipient.

A credit union, on demand by a debentureholder of the credit union, must furnish the debentureholder with a copy of the credit union's latest financial statements and a copy of the auditor's report on the financial statements.

Approval for publication

39.49

Financial statements, or interim financial statements, issued, published or circulated by a credit union must be first approved by the directors, and the approval evidenced by the signatures of 2 directors.

Financial statements issued, published or circulated by a credit union

that are to be presented to an annual general meeting must have attached the auditor's report required under

Part 2.3,

must have attached every auditor's report made in respect of the financial statements, and

must not, unless the financial statements have been audited and an auditor's report has been made, purport to be audited financial statements.

2.3

Audits

Appointment of Auditor

Auditor

39.5

The directors of a credit union may appoint the first auditor of the credit union to hold office until the close of the first annual general meeting.

The credit union, at each annual general meeting, must appoint an auditor to hold office until the close of the next annual general meeting, and if, at that meeting, an appointment is not made, the auditor in office continues as auditor until a successor is appointed.

The directors may fill any casual vacancy in the office of auditor.

If for any reason no auditor is appointed, on the application of a member, auxiliary member, debentureholder or creditor of the credit union, the Supreme Court may appoint an auditor to hold office until the close of the next annual general meeting and set the remuneration to be paid by the credit union for the auditor's services.

The credit union must promptly give notice in writing to an auditor of the auditor's appointment.

Qualifications

39.51

The auditor of a credit union must be a person who is

a member of, or is a partnership whose partners are members of, a provincial institute of chartered accountants within Canada,

a member of a provincial organization of chartered professional accountants within Canada, authorized by that organization to perform an audit,

a professional accounting corporation as defined in the Chartered Professional Accountants Act , authorized by the CPABC as defined in that Act to perform an audit, or

a registered firm as defined in the Chartered Professional Accountants Act , authorized by the CPABC as defined in that Act to perform an audit.

Persons not qualified as auditors

39.52

A person must not be the auditor of a credit union if the person is not independent of the credit union, its affiliates and its directors and officers.

For the purposes of this section, independence is a question of fact, but

a person is not independent who is a director, officer or employee of the credit union or of an affiliate of the credit union, or who is a partner, employer or employee of that director, officer or employee, or who is a member of the immediate family of that director or officer,

a person is not independent if the person, a member of the person's immediate family, the person's partner, or a member of the immediate family of the person's partner, beneficially owns or controls, directly or indirectly, any interest in an equity share or a debt obligation of the credit union or of any of the credit union's affiliates, and

a person is not independent who is appointed a trustee of the estate of the credit union under the Bankruptcy and Insolvency Act (Canada) or who is a partner, employer or employee of, or a member of the immediate family of, that trustee.

For the purposes of subsection (2),

the immediate family of the person referred to includes

the person's spouse, parent and child, and

any relative of the person, or any relative of the person's spouse, who resides with the person, and

a partner of the person referred to means any person with whom the person carries on in partnership the profession of public accounting.

An auditor, within 90 days after becoming aware that the auditor's appointment as auditor contravenes this section, must either

eliminate the circumstances that cause the auditor to be in contravention, or

resign as auditor.

Remuneration

39.53

The remuneration of the auditor of a credit union must be set by ordinary resolution or, if the credit union so resolves, by the directors, but the remuneration of an auditor appointed before the first annual general meeting or to fill any casual vacancy may be set by the directors.

Removal of auditor

39.54

A credit union may, by ordinary resolution passed at a general meeting duly called for the purpose, remove an auditor before the expiration of the auditor's term of office, and must by ordinary resolution at that meeting appoint another auditor in the auditor's stead for the remainder of the auditor's term.

A credit union, before calling a general meeting for the purpose specified in subsection (1), but not less than 14 days before the sending of the notice of the meeting, must give to the auditor

written notice of the intention to call the meeting, specifying the date on which the notice of the meeting is proposed to be sent, and

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

An auditor has the right to make to the credit union, not less than 3 days before the sending of the notice of the meeting, representations in writing respecting the auditor's proposed removal as auditor, and the credit union, at the credit union's expense, must forward with the notice of the meeting a copy of those representations to each member.

Notice of proposed change

39.55

The directors of a credit union must not propose, at an annual general meeting, the appointment of an auditor other than the incumbent auditor unless notice of that proposed appointment is contained in the notice of the meeting.

If the notice of the meeting contains the notice referred to in subsection (1),

the credit union must, not less than 14 days before the sending of the notice of the meeting, give to the incumbent auditor written notice of the intention of the directors not to recommend the auditor's reappointment at the annual general meeting, specifying in the written notice the date on which the notice of the meeting is proposed to be sent, and

the incumbent auditor has the right to make to the credit union, not less than 3 days before the sending of the notice of the meeting, representations in writing respecting the proposal not to reappoint the incumbent as auditor, and the credit union, at the credit union's expense, must forward with the notice of the meeting a copy of those representations to each member.

Audit Committee

Appointment and procedures

39.56

The directors of a credit union must elect at their first meeting following each annual general meeting a committee, to be known as the audit committee, composed of not fewer than 3 directors, of which a majority of the members must not be officers or employees of the credit union or of an affiliate of the credit union, to hold office until the next annual general meeting.

The members of the audit committee must elect a chair from among themselves and, subject to

section 103 of the Financial Institutions Act , may determine the committee's procedure.

In addition to the requirements of subsection (5), the audit committee of a credit union must review

returns of the credit union that are to be filed with the superintendent under

section 127 (1) of the Financial Institutions Act ,

reports that have been made by the auditor under

section 123 of the Financial Institutions Act , and

prescribed reports, transactions or matters.

If, under this Act or the Financial Institutions Act , financial statements or a return requires the approval of the directors, that approval must not be given until

the audit committee has reviewed and reported on those financial statements or that return, and

the directors have received the report.

Before financial statements that are to be submitted to an annual general meeting are considered by the directors, the financial statements must be submitted to the audit committee for review with the auditor, and, after that, the report of the audit committee on the financial statements must be submitted to the directors.

The auditor must be given notice of, and has the right to attend and be heard at, every meeting of the audit committee, and must attend a meeting of the audit committee when requested to do so by the committee.

On the written request of the auditor, of a member of the audit committee or of any director, the chair of the audit committee must convene a meeting of the audit committee to consider any matters the auditor, member or director, as the case may be, believes should be brought to the attention of the directors or members.

Duties and Rights of Auditors

Annual audit

39.57

The auditor must make an examination that will enable the auditor to report to the members as required under subsection (2).

The auditor must make a report to the members on the financial statements, other than the part that relates to the period referred to in

section 74.1 (a) (ii), that are to be placed before the credit union at any annual general meeting during the auditor's term of office, and must state in the report whether, in the auditor's opinion,

the financial statements present fairly the financial position of the credit union and the results of its operations for the period under review, and

the financial statements are in accordance with generally accepted accounting principles applied on a basis consistent with that of the preceding period.

If the financial statements contain a statement of changes in net assets or a statement of source and application of funds, the auditor must state in the auditor's report whether, in the auditor's opinion, the statement of changes in net assets or the statement of source and application of funds presents fairly that information.

Negative audit report

39.58

If the report of the auditor under

section 39.57 does not contain the unqualified opinion required by it, the auditor must state the reasons in the report.

Audited statements of subsidiaries

39.59

Whether or not the assets and liabilities and income and expense of any one or more subsidiaries of a holding credit union are included in the financial statements of the holding credit union, the report of the auditor of the holding credit union required by this Part may refer to the reports of the auditors of one or more of the subsidiaries, but the reference does not derogate from the duty of the auditor of the holding credit union to comply with

section 39.57 (1).

Auditor's attendance

39.6

A member of a credit union may, whether or not entitled to vote at a meeting of the credit union, by notice in writing to the credit union given not less than 5 days before a meeting at which the financial statements of the credit union are to be considered or the auditor is to be appointed or removed, require the attendance of the auditor at the meeting at the expense of the credit union and, in that event, the auditor must attend the meeting.

Procedure

39.61

If the auditor attends a general meeting, the auditor must answer inquiries directed to the auditor concerning the financial statements of the credit union and the opinion on the financial statements stated in the auditor's report.

At the request of any member attending the annual general meeting, the report of the auditor must be read to the meeting.

Amendment of financial statements and report

39.62

If facts come to the attention of the officers or directors of a credit union

that could reasonably have been determined before the date of the last annual general meeting, and

that, if known before the date of the last annual general meeting, would have required a material adjustment to the financial statements presented to the meeting,

the officers or directors must communicate the facts to the auditor who reported to the members under this Part and the directors must promptly amend the financial statements and deliver the financial statements to the auditor and to the superintendent.

Whether through communication described in subsection (1) or by any other means, if facts described in subsection (1) (

a) and (

b) come to the attention of the auditor and the auditor considers it necessary to amend the report in respect of the financial statements presented to the last annual general meeting, the auditor must

inform the superintendent in writing, and

amend the report so that it complies with this Part.

If the auditor amends the report under subsection (2), the directors must send to the members a copy of the amended report and a statement explaining the effect of the amendment on the financial position and results of the operations of the credit union

by prepaid post to the latest address shown for the recipient on the register of members and auxiliary members, or

in any other manner agreed to by the intended recipient.

Access to information

39.63

On the demand of an auditor of a credit union, a person who is or has been a director, officer, employee or agent of a credit union or a credit union's subsidiary must, to the best of the person's ability to do so,

furnish all information and explanations to the auditor, and

allow the auditor access to, and furnish to the auditor copies of, records, documents, books, accounts and vouchers of the credit union and of the credit union's subsidiaries, if any,

as the auditor considers necessary for the purpose of any examination or report that the auditor is permitted or required to make under this Act or the Financial Institutions Act .

A person who in good faith makes any communication under this

section is not liable in a civil action only because of making the communication.

Information as to foreign subsidiaries

39.64

If a subsidiary referred to in

section 39.63 is a corporation to which this Act does not apply, the holding credit union must make available to the auditor of the holding credit union the records, documents, instruments, accounts and vouchers of that subsidiary and must require the directors, officers and employees of that subsidiary to make available to the auditor of the holding credit union the information and explanations referred to in

section 39.63.

Right to attend general meetings

39.65

The auditor of a credit union is entitled to attend any general meeting of the credit union and to receive every notice and other communication relating to the meeting that a member or auxiliary member is entitled to receive, and is entitled to be heard at any general meeting that the auditor attends on any part of the business of the meeting that concerns the auditor in that capacity, or that concerns the financial statements of the credit union.

Qualified privilege

39.66

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

2.4

Alteration of Constitution and Rules

Definition

39.7

In this Part, alter includes create, add to, vary and delete.

Superintendent's consent

39.71

The registrar must not accept for filing

a resolution, referred to in

section 39.72 (2), to alter the constitution of a credit union, or

a resolution, referred to in

section 39.74 (1), to alter the rules of a credit union

without first receiving the consent of the superintendent.

Powers to alter constitution

39.72

Subject to

section 39.77, a credit union may alter its constitution by special resolution.

A credit union that wishes to alter its constitution as permitted by subsection (1) must file a certified copy of the special resolution altering the constitution, together with a copy of the constitution as amended by the alteration.

A special resolution to alter the constitution of a credit union takes effect

if every other requirement of this Act relating to the proposed alteration is complied with, on the date that a certified copy has been accepted for filing by the registrar, or

on the date specified in the special resolution,

whichever is later.

Copies to include alterations

39.73

If the constitution of a credit union is altered, every copy of the constitution issued on or after the date the alteration takes effect must contain the alteration.

Powers to alter rules

39.74

Subject to this Act and a credit union's constitution, the credit union may, if the rules as altered would, at the time of the filing, comply with this Act, alter the credit union's rules by filing with the registrar a certified copy of a special resolution altering the rules.

A resolution to alter the rules of a credit union takes effect

if every other requirement of this Act relating to the proposed alteration is complied with, on the date that a certified copy has been accepted for filing by the registrar, or

on the date specified in the resolution,

whichever is later.

An alteration made in compliance with subsections (1) and (2) is as valid as if originally contained in the rules.

Copies to include alterations

39.75

If the rules of a credit union are altered, every copy of the rules issued on or after the date the alteration takes effect must contain the alteration.

Repealed

39.76

[Repealed 2019-39-103.]

Procedure and effect

39.77

A credit union, by special resolution, may alter its constitution by changing the credit union's corporate name to a corporate name approved by the superintendent.

On the registrar accepting for filing a certified copy of the resolution referred to in subsection (1), the registrar must issue a certificate showing the change of corporate name and the date the change of corporate name is effective and must publish in the Gazette or in any other prescribed manner notice of change of corporate name.

No change of the corporate name of a credit union affects any of the credit union's rights or obligations, or renders defective any legal proceedings by or against it, and any legal proceedings that may have been continued or commenced against the credit union under its former corporate name may be continued or commenced against the credit union under its new corporate name.

Membership, Shares and Voting

Membership

Common bond

A credit union may have a common bond of membership based on only one of the following: religious interest; ethnic interest; social interest; occupation; employment; community; geographic area.

Subject to first receiving written approval of the superintendent and subject also to continued compliance with subsection (1), a credit union may amend its common bond of membership by special resolution.

For the purpose of accommodating an amalgamation under

section 20 or 21, or a sale and purchase of assets under

section 16 or 17, despite subsection (1) but subject to first receiving the written approval of the Authority, a credit union may

have for its common bond of membership more than one basis set out in subsection (1), and

by special resolution amend its common bond of membership for that purpose.

A credit union must file with the registrar every special resolution amending its common bond of membership.

Membership qualifications

A credit union may admit as a member only

persons who are eligible under any of subsections (2) to (6), and

unincorporated associations that are eligible under subsection (7).

A person who meets all of the following requirements is eligible to be a member of a credit union:

the person is one of a group that the credit union under its common bond of membership, if any, is intended to serve;

the person applies for membership and the application is approved by the directors, a committee of the directors or a nominee of the directors;

the person subscribes and pays for at least the minimum number of membership shares required under the rules of the credit union.

If a person is one of a group that a credit union under its common bond of membership is intended to serve

that person's spouse, parent or child, or

that person's

relative, or

spouse's relative

who occupies the same home as that person

is eligible to be a member of the credit union, subject to meeting the requirements set out in subsection (2) (

b) and (c).

If the directors of a credit union consider that a person may be conveniently served by it, the person is eligible to be a member of the credit union, subject to meeting the requirements set out in subsection (2) (

b) and (c).

An employee of a credit union is eligible to be a member of the credit union, subject to any restrictions on employee membership under the rules and subject to meeting the requirements set out in subsection (2) (

b) and (c).

Each of the following is eligible to be a member of a credit union, if it meets the requirements set out in subsection (2) (

b) and (c):

the government;

a public body;

a subsidiary of the credit union.

An unincorporated association that meets both of the following requirements is eligible to be a member of a credit union:

the unincorporated association applies for membership and the application is approved by the directors, a committee of the directors or a nominee of the directors;

the unincorporated association subscribes and pays for at least the minimum number of membership shares required under the rules of the credit union.

Junior members

Despite

section 41, an individual under 19 years of age who meets the requirements of

section 41 (2), (3), (4) or (5) may be admitted only as a junior member of the credit union.

Despite the Infants Act , the Age of Majority Act or the common law, but subject to subsection (3), in respect of membership in the credit union and of any indebtedness or obligation to the credit union, a junior member of a credit union

has the same obligations, rights and legal capacity as a member of the credit union who has reached 19 years of age, and

may be sued.

A junior member is not entitled to vote, be a director or be a member of a committee of the credit union.

A junior member becomes a member with full membership rights and obligations on reaching 19 years of age.

Ceasing membership

A member of a credit union does not cease to be a member except as provided in sections 45, 47, 48 and 49.

Membership shares

The rules of a credit union must provide, as a condition of admission as a member of the credit union, that each member subscribe and pay for a specified minimum number, not less than 5, of shares of a distinct class of equity shares having a par value of $1 for each share.

If the rules of a credit union provide as set out in subsection (1), the shares of the distinct class of equity shares referred to in that subsection are the membership shares in the credit union.

If the rules of a credit union do not provide as set out in subsection (1), the rules of the credit union are deemed to be amended to contain the following:

"A distinct class of equity shares of the credit union is established consisting of an unlimited number of equity shares having a par value of $1 each. As a condition of admission as a member or as a junior member a person is required to subscribe and pay for at least 5 membership shares."

and the shares of that distinct class of equity shares are the membership shares in that credit union.

The membership shares in a credit union are redeemable as set out in

section 64 (6) to (8).

A membership share in a credit union

must not be beneficially owned by, and

is not assignable to

a person who is not a member of the credit union.

A credit union must not

issue its membership shares, or

enter in its register of members and auxiliary members a transfer of membership shares

to any person who

is not a member of the credit union, or

will not become a member on the issue or transfer of the shares.

A member of a credit union may not subscribe and pay for more than the maximum number of membership shares in the credit union specified in the rules of the credit union, which maximum number must be not greater than 1 000, and if in the rules of a credit union no such maximum number is specified, a member may not subscribe and pay for more than 1 000 membership shares in that credit union.

A credit union must not attach rights or restrictions to its membership shares under its rules unless the rights or restrictions

are consistent with the requirements of this section, and

have first received the consent of the superintendent.

If there is a conflict between this

section and the constitution or rules of a credit union respecting membership shares, this

section prevails.

To the extent that rights or restrictions attached to membership shares in a credit union under the rules of the credit union are inconsistent with this section, the rules are ineffective and the rights or restrictions are unenforceable.

Membership ceases for failure to hold membership shares

It is a condition of membership in every credit union that each member hold at least the minimum number of membership shares specified under the rules of the credit union.

A member of a credit union who ceases to hold at least the minimum number of membership shares specified under the rules of the credit union immediately ceases to be a member of the credit union.

Auxiliary membership

A person who holds equity shares in a credit union but is not a member of it is an auxiliary member of the credit union.

A person who holds shares of any class of equity shares of a credit union, other than membership shares, becomes an auxiliary member of the credit union immediately on ceasing to be a member of the credit union

under

section 45 (2),

on withdrawal from membership under

section 47, or

on termination of membership under

section 48 or 49.

Withdrawal from membership

A member may withdraw from membership in a credit union by giving written notice of withdrawal to the credit union.

Termination of membership

In this section, stabilization authority means the central credit union designated as the stabilization authority under

section 282 of the Financial Institutions Act .

The only way by which the directors of a credit union, other than the stabilization authority, may terminate a person's membership in the credit union is by resolution of the directors,

requiring a majority of 3/4 of all the directors, and

passed at a meeting of the directors.

The only way by which the directors of the stabilization authority may terminate a person's membership in the stabilization authority is by resolution of the directors,

requiring approval by all the directors, and

passed at a meeting of the directors.

A person whose membership is proposed to be terminated by a resolution of the directors is entitled to at least 7 days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds for termination, and the person may attend the meeting, either personally or by or with an agent or counsel, to make submissions.

Within 7 days after the date on which the resolution referred to in subsection (2) or (3) is passed by the required majority, the credit union must give written notice of the resolution to the person whose membership is terminated.

A person whose membership is terminated under subsection (2) or (3) may appeal the decision of the directors at the next general meeting of the credit union by delivering a written notice of appeal to the credit union within 7 days after receiving notice under subsection (5).

A person who, within the time limited by subsection (6), appeals the termination of the person's membership, despite the resolution of the directors terminating the membership, continues to be a member of the credit union unless the members at the general meeting to which the appeal is brought confirm the termination of the person's membership by a resolution requiring a simple majority or, if provided by the rules, a greater majority.

Termination of membership by special resolution

The only way by which the members of a credit union may terminate a person's membership in the credit union is by special resolution, passed at a general meeting at which the person is given an opportunity to be heard.

Readmission requires special resolution

A person whose membership has been terminated in accordance with

section 48 or 49 must not again be admitted to membership in the credit union unless the readmission is approved by special resolution.

Restrictions respecting auxiliary membership

Subject to sections 16 (4) (b) (ii), 20 (4) (b) (ii) and 58, an auxiliary member of a credit union is not entitled to vote, be a director or be a member of a committee of the credit union.

Entitlement to refund

If a person ceases to be a member of a credit union

under

section 45 (2),

on withdrawal from membership under

section 47,