THE NEWFOUNDLAND AND LABRADOR GAZETTE EXTRAORDINARY

Part II PUBLISHED BY AUTHORITY ST. JOHN'S, THURSDAY, JULY 2, 2009 NEWFOUNDLAND AND LABRADOR REGULATION 56/09

Extraordinary Gazette July 2, 2009 3 NEWFOUNDLAND AND LABRADOR REGULATION 56/09 Credit Union Regulations, 2009 under the Credit Union Act, 2009 (Filed July 2, 2009) Under the authority of

section 193 of the Credit Union Act, 2009, I make the following regulations. Dated at St. John’s, July 2, 2009 David Norman Deputy Minister of Government Services REGULATIONS Analysis 1.

Short title 2.

Definitions 3. Business commencement requirements 4. Arrangement for services 5. Restriction re adjacent prem- ises 6. Authorized insurance plans 7. Subsidiaries and associate companies 8. Branch offices 9. Share capital 10. Change of name 11. Change of address 12. Unclaimed balances 13. Payment of prescribed amount on death of a mem- ber 14. Loan policies 15. Loan requirements and restrictions 16. Commercial lending 17. Mortgage loans 18. Loan approvals 19. Liquidity 20. Other investments 21. Allowance for doubtful loans

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 4 22. Equity 23. Borrowing 24. Matching 25. Insurance 26. Training 27. Associate members 28. Audit committee 29. Financial reporting 30. Audits, examinations, etc. 31. Records removed 32. No inspection 33. By-laws 34. Deposit insurance 35. Investments by guarantee corporation 36. Borrowing by guarantee corporation 37. Payments by guarantee corporation 38. Loans by guarantee corpora- tion 39. Levies by guarantee corpora- tion 40. Board of guarantee corpora- tion 41. NLR 55/99 Rep. 1.

These regulations may be cited as the Credit Union Regulations, 2009. 2. In these regulations (a) "Act" means the Credit Union Act, 2009; (b) "commercial loan" means a loan by a credit union to a busi- ness whether it be to an individual, a partnership, co- operative, or corporation or another organized body that is engaged in the development or production for sale of goods and services where (

i) the loan is secured by the assets of the business and as- signed to the benefit of the credit union, or (ii) the repayment of the loan is primarily dependent on the business; (c) "document" means a document required to be filed with the superintendent or guarantee corporation under the Act; (d) "family member" means a parent, child, grandchild, spouse, brother or sister or in-law not necessarily living in the same residence; (e) "financial central" means a central incorporated under the laws of a province or of Canada which is permitted to pro- vide financial services to its members and affiliates and is a member of the Credit Union Central of Canada;

Short title

Definitions

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 5 (f) "officer" in respect of a credit union means (

i) the president, vice-presiden t, secretary or treasurer, (ii) a person who performs functions for the credit union normally performed by a person mentioned in subpara- graph (i), or (iii) another person designated as an officer by the by-laws or by a resolution of the directors; and (g) "residential property" means real property, condominiums, and mobile homes, the primary use of which is residential, consisting of a building that is used, or is to be used, as no more than 4 private dwellings. 3. For the purpose of subsection 10(2) of the Act the guarantee corporation shall not approve th e commencement of business of a credit union unless that credit union provides (

a) a business case that indicates that regulatory requirements with respect to liquidity and capital will be met and includes information on (

i) membership base, (ii) economic environment, (iii) 5 year financial plan, and (iv) marketing plan; (

b) paid up membership of 500 members; (

c) minimum initial deposit of $1 million; (

d) board and staff training as required by the guarantee corpo- ration; (

e) operating policies and procedures; (

f) premises satisfactory to the guarantee corporation; Business com- mencement re- quirements

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 6 (

g) security equipment as re quired by the CUMIS Group Lim- ited; and (

h) a computer system. 4. For the purpose of subsection 16(3) of the Act an arrangement entered into by a credit union with a financial institution or other corpo- ration for the provision of a service offered by the financial institution or other corporation, other than an arrangement in the normal course of business, shall be approved in writing by the guarantee corporation prior to the credit union entering into the arrangement. 5.

A credit union shall not carry on business in the province adja- cent to an insurance company or a pr operty and casualty insurance bro- ker or agent that is a subsidiary of the credit union unless the credit union clearly indicates to its members that the credit union and its premises are separate and distinct from the office of the insurance com- pany or a property and casualty insurance broker or agent that is a sub- sidiary of the credit union and there is a separate entrance and separate signage for the insurance company or a property and casualty insurance broker or agent that is a subsidiary of the credit union. 6.

A credit union may enter into the following group plans of in- surance for the security of the credit union or the benefit of members: (

a) credit or charge related insurance; (

b) creditors' disability insurance; (

c) creditors' life insurance; (

d) creditors' loss of employment insurance; (

e) creditors' vehicle inventory insurance; (

f) export credit insurance; (

g) group accident and sickness insurance; (

h) group life insurance; (

i) personal accident insurance; Arrangement for services Restriction re adjacent premises Authorized insur- ance plans

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 7 (

j) travel insurance; or (

k) other group insurance plans which may be authorized by the guarantee corporation. 7.

(1) In this

section (a) "associate company" means a corporation where more than 10% and less than 51% of the voting shares are owned by a credit union; and (b) "subsidiary" means a corpor ation where 51% or more of the voting shares are owned by a credit union.

(2) A credit union may, subject to any legislation or regulation relating to such services, establish or acquire as a subsidiary or associ- ate company a corporation that is (

a) a data processing or information management company; (

b) a factoring company; (

c) a financial leasing company; (

d) a foreign financial institution; (

e) an investment counselling company; (

f) a mutual fund distribution company; (

g) a portfolio management company; (

h) a real estate or real estate brokerage company; (

i) a management service company; (

j) an insurance company or insurance broker or agent; (

k) a securities dealer company; (

l) a trust company; (

m) a loan company; or Subsidiaries and associate companies

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 8 (

n) another enterprise that th e guarantee corporation may ap- prove.

(3) A credit union shall not make an investment in or guarantee an obligation of a subsidiary of the credit union if, after making the investment or the giving of a guarantee, the total book value of all in- vestments and guarantees will exceed 5% of the total assets of the credit union. (4) Subsection (3) does not apply where the subsidiary is a trust company or a loan company. 8. A credit union may establish or relocate a branch office of the credit union if it has obtained, prior to establishing or relocating the branch (

a) the approval of the directors; and (

b) in the case of a credit union which has not achieved the eq- uity requirements set out in

section 22, the approval of the guarantee corporation. 9.

(1) A member of a credit union shall hold not less than 20 mem- ber equity shares purchased at par.

(2) With the approval of the di rectors of the credit union mem- ber equity shares may be redeemable at par.

(3) Where in the opinion of the guarantee corporation a credit union is in financial difficulty, the guarantee corporation may prevent the withdrawal of share capital. 10.

(1) Every application by a cred it union for approval of a change of name shall be in the form required by the superintendent and shall be sent to the superintendent for approval.

(2) Where a change in name of a credit union is approved or where the name of the credit union has been changed by the superin- tendent, the substituted name shall be entered in the register in place of the name which was changed and an altered certificate of registration shall be issued to conform with the change in name. Branch offices Share capital Change of name

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 9 11.

(1) Every application by a cred it union for approval of a change of address shall be in the form required by the superintendent and shall be sent to the superintendent.

(2) Where a change in address of a credit union is approved, the substituted address shall be entered in the register in place of the ad- dress that was changed. 12.

(1) Where a member has a balan ce in deposits with a credit un- ion and has not transacted any business with the credit union for a pe- riod of 2 years or more, the directors, after giving notice to the member by mail sent to the last known addr ess of the member, may, if the no- tice is not acknowledged, transfer the balance to a special trust fund established for the purpose of retaining unclaimed money in the records of the credit union.

(2) Interest on the special trust fund may be paid at rates and for periods that the directors may determine.

(3) Unclaimed balances may be subject to the fees for admini- stration, notification and maintenance as set out in the policies of the credit union.

(4) All money held to the credit of a member, less an applicable fee under subsection (3), shall upon application, be paid to that mem- ber.

(5) The directors of the credit union shall establish a written policy respecting the management and monitoring of transactions in the special trust fund referred to in subsection (1).

(6) Where no claims are made on an account within 10 years of the date the balance is transferred to the trust account established under subsection (1), the credit union may transfer the balance into revenue.

(7) Where, subsequently, a claim is made on an account taken into revenue by the credit union under subsection (6), the credit union shall, if the claim is legitimate, pay to the person out of general revenue the balance in the accoun t less an administrative fee that may be pro- vided for in the policies of the credit union.

(8) In the event that a credit union makes an extraordinary sale, lease, or exchange under

section 120 of the Act or is liquidated or dis- Change of address Unclaimed balances

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 10 solved, the special trust fund and all records pertaining to it shall be transferred to the guarantee corporation. 13. For the purpose of

section 37 of the Act, the maximum amount that may be paid on the death of a member is $10,000. 14.

(1) The loan policies established by a credit union under

section 38 of the Act shall provide for (

a) the maximum amount of the loans that may be made to a member of the credit union and that may be outstanding; (

b) the manner in which loans to directors, officers and employ- ees of the credit union and their family members are to be administered; (

c) the manner in which loans made by the credit union are to be considered and approved; (

d) the extent to which, and the manner in which, loans made by the credit union are to be secured; (

e) the circumstances in which unsecured loans may be made to a member of the credit union and the maximum amount of the unsecured loans that may be made to a member and that may be outstanding; (

f) participating in a loan to a member of another credit union incorporated in the province, a financial central, a subsidiary of a financial central or such other credit union or organiza- tion outside of the province where it has entered into a writ- ten agreement for the purpose of participating in a loan; (

g) the acquisition from another cr edit union incorporated in the province, a financial central, a subsidiary of a financial cen- tral or such other credit union or organization outside of the province its interest in a loan made to a member of another credit union; and (

h) the terms, conditions, restrictions or limitations established by the guarantee corporation in relation to the lending activi- ties of the credit union and other matters that may be re- quired by the guarantee corporation. Payment of pre- scribed amount on death of a member Loan policies

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 11

(2) The loan policies established by a credit union under subsec- tion (1) may provide for matters in addition to those required under subsection (1) in relation to the loans that may be made by, and the lending activities of, the credit union, if the loan policies so established are not inconsistent with the Act, these regulations, generally accepted lending practices and terms, conditions, restrictions or limitations es- tablished by the guarantee corporation.

(3) The loan policies established by a credit union shall, subject to the terms, conditions, restrictions or limitations established by the guarantee corporation, be in accordan ce with prudent lending policies, standards and procedures that a reasonable and prudent person would apply in respect to making loans to avoid undue risk of loss and to ob- tain a reasonable rate of return.

(4) The loan policies established by a credit union shall be re- viewed annually by a co mmittee of the board or, if there is no commit- tee, the board of the credit union. 15.

(1) Loans made by a credit union to its members shall be classi- fied and shown in the records of the credit union as: (

a) personal loans, including personal line of credit loans; (

b) loans secured by mortgages on residential and commercial property that are insured under the National Housing Act (Canada) or that are insured by an insurer that is licensed to carry on business in the province under the Insurance Com- panies Act ; (

c) loans secured by mortgages on residential property that do not exceed 80% of the fair ma rket value of the property mortgaged; (

d) loans secured by mortgages on residential property that are not included in paragraphs (

b) and (c); (

e) loans to the gov ernment of the province or a Crown corpora- tion or agency of the province, or to a municipality, school board, hospital corporation or a university in the province, and loans the repayment of which are insured by CMHC or another financially approved institution or are guaranteed by Loan requirements and restrictions

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 12 the government of Canada or a province or territory of Can- ada; (

f) commercial loans in acc ordance with

section 16; (

g) loans secured by mortgages on property other than residen- tial property; and (

h) loans to non-profit organizations including charitable, reli- gious, fraternal and labour organizations provided these are not engaged in any commercial enterprise wherein income would accrue to any partner, proprietor, member or share- holder. 16.

(1) A credit union shall require the prior approval of the guaran- tee corporation to commence maki ng commercial loans in excess of $25,000 in aggregate to a member un less the loan is fully secured by cash and assigned to the benefit of the credit union.

(2) The guarantee corporation' s approval to a credit union to commence commercial lending referred to in subsection (1) shall be granted subject to the following criteria being met: (

a) the liquidity requirements referred to in

section 19 are met; (

b) the allowance for doubtful loans is calculated as required under

section 21; (

c) the equity requirements referred to in

section 22 are met; (

d) expertise in commercial lending has been identified to the satisfaction of the guarantee corporation; (

e) a comprehensive commercial lending policy has been estab- lished and the policy has met with the approval of the guar- antee corporation; (

f) competence has been demons trated with re spect to sound consumer lending practices; and (

g) other criteria the guarantee corporation may establish. Commercial lending

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 13

(3) The superintendent shall establish a limit on the amount of commercial loans that a credit union , approved under subsection (2), may grant to its members and have outstanding but the value of com- mercial loans granted and outstanding shall not exceed 25% of the total of the credit union loans portfolio. 17.

(1) A credit union shall not make a real estate mortgage loan on the security of property referred to in paragraphs 15(1)(b), (

c) and (

d) for the purpose of purchasing, renovating or improving the property or to refinance a real estate mortgage loan on the property unless, (

a) the amount of the indebtedness, together with the amount of the indebtedness under other mortgage loans on the security of the property mortgaged that rank equally with or in prior- ity to the real estate mortgage loan (

i) in the case of the purchas e of the property, does not exceed 80% of the purchase price or the fair market value of the property, whichever is less, at the time the real estate mortgage loan is granted, (ii) in the case of the renovation or the improvement of the property or the refinancing of a real estate mortgage loan, does not excee d 80% of the fair market value of the property after the renovations or improvements have been made, or (iii) exceeds 80% of the amount determined under subpara- graph (

i) or (ii) and the excess is secured by an assign- ment of money on deposit with a financial institution or is guaranteed or insured by the government of Canada or of a province or territory of Canada, or agency of ei- ther, or is otherwise guaranteed or insured in a manner and to an extent approved by the guarantee corporation; and (

b) the income from all sources that is available to the borrower is sufficient to repay the principal and interest of the real es- tate mortgage loan and fees and taxes related to it.

(2) Despite subparagraph (1)(a )(iii) a credit union may take a collateral lien on property on an amount greater than 80% Mortgage loans

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 14 (

a) against unsecured personal loans or lines of credit however no value for risk assessment purposes will be assigned to the amount in excess of 80%; or (

b) where a loan is impaired and the nature of the impairment is documented.

(3) Shares and deposits of a member pledged as security for a loan shall not be withdrawn to an amount which would reduce the secu- rity below the outstanding balance remaining on the loan. 18.

(1) The directors of a credit union may, in accordance with its by-laws and lending policies, establish a committee of not less than 3 persons to approve all loans to a director, committee member, man- agement or staff and other loans as specified in the credit unions loans policies and the approval of a loan by the committee shall be unani- mous.

(2) The directors of a credit union shall be responsible for loan approval where a committee has not been established under subsection (1).

(3) Where a member of the commi ttee or a family member of a committee member or where a director or a family member of a direc- tor has applied for a loan, the comm ittee member or director must ex- cuse himself or herself from the por tion of the meeting where that loan is being considered. 19.

(1) For the purpose of

section 40 of the Act, a credit union shall maintain statutory liquidity of not less than 6% of the total amount of deposits in, and borrowings of, the credit union.

(2) Qualifying investments for the purpose of this

section are (

a) demand or unencumbered deposits with a financial central, or its subsidiary, that are redeemable without penalty as to the amount of principal invested; and (

b) deposits in a financial central or its subsidiary with a matur- ity date of 5 years or less which are redeemable on demand and pose no risk to the original principal. Loan approvals Liquidity

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 15

(3) A credit union shall not borrow for the purpose of establish- ing and maintaining statutory liquidity other than from its members.

(4) A credit union shall report at the end of each month to the guarantee corporation the position of its liquidity.

(5) For the purpose of this section, every credit union shall be a member or an affiliate of a financial central.

(6) A credit union shall participate in the National Liquidity Pool established by the Credit Union Central of Canada and a credit union shall do those things required by the Credit Union Central of Canada to assure its participation.

(7) A credit union shall not be permitted to draw on deposits maintained for the purpose of this

section without the approval of the guarantee corporation of its intent to draw on these deposits. 20.

(1) For the purpose of

section 41 of the Act, a credit union shall establish a policy for investments which will permit investments in accordance with prudent investment standards and may only make in- vestments in accordance with this policy.

(2) For the purpose of subsection (1), prudent investment stan- dards are those that a reasonable and prudent person would apply in respect of a portfolio of investments so as to avoid undue risk of loss and to obtain a reasonable return on investments made. 21.

(1) For the purpose of

section 42 of the Act, the allowance for doubtful loans shall be an amount equal to the total balance owing less the net realizable value of security on each doubtful loan held by the credit union, of (

a) a loan to a member who has filed for bankruptcy and who has not been discharged; (

b) a loan that has been rewritte n due to the borrower's inability to make regular payments until the member has demon- strated an ability to meet the payments, outlined in the re- written payment schedule, for a period of 6 months; (

c) a loan overdue for 90 days or more; Other investments Allowance for doubtful loans

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 16 (

d) a loan to a commercial enterp rise that has ceased operations or has gone into receivership or liquidation; (

e) an amount which in the opinion of the guarantee corporation requires an allowance; or (

f) an amount which in the opinion of the external auditor of the credit union would be necessary to comply with Canadian generally accepted accounting principles.

(2) Within 30 days after the en d of each quarter, every credit union shall prepare and submit to the guarantee corporation a copy of a

schedule for doubtful loans for the quarter, in the form set out by the guarantee corporation. 22.

(1) For the purpose of

section 43 of the Act, a credit union shall maintain a level of equity that is not less than 5% of its assets with not less that 3% of its assets in the form of retained earnings or another risk weighted calculation as approved by the guarantee corporation.

(2) A credit union that does not meet capital adequacy in a par- ticular year shall file for that year an updated equity plan with the guar- antee corporation, not later than 60 days after the end of the credit un- ion's fiscal year, in the form set out by the guarantee corporation.

(3) Despite the requirements under subsection (1), the superin- tendent may, under those terms and c onditions that the superintendent may require, permit a credit union to include in its calculation of eq- uity, shares issued in accordance with

section 28 of the Act. 23. The amount that may be borrowed by a credit union under sec- tion 44 of the Act shall not exceed 20 % of the total amount of deposits of its members unless authorized by the guarantee corporation to bor- row a greater amount. 24.

(1) The directors of a credit union shall in accordance with guidelines established by the guarantee corporation, (

a) establish policies and procedures for matching the terms and return of investments and loans made by the credit union and the terms and return of deposits in, and other interest sensi- tive liabilities of, the credit union; and Equity Borrowing Matching

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 17 (

b) file a report with the guarantee corporation (

i) quarterly if the credit union assets are greater that $10,000,000, (ii) semi annually if the cr edit union assets are less than $10,000,000, or (iii) more frequently if required by the guarantee corpora- tion. 25.

(1) For the purpose of

section 46 of the Act, the guarantee cor- poration may establish and set guidelines for insurance programs for credit unions that prov ide indemnification for liability under law and for loss or destruction of property including, but not limited to (

a) property and casualty; (

b) bonding; (

c) director's liability; (

d) corporate errors and omissions; (

e) privacy; (

f) employment practice liability; and (

d) deposit insurance.

(2) Participation by all credit unions in an insurance program established under subsection (1) is compulsory.

(3) All directors and employees of a credit union shall be bonded in the form required by the guarantee corporation.

(4) The bond required under subsection (3) shall, in the case of employees, be a condition of employment and in the case of directors, a condition of holding office.

(5) The guarantee corporation ma y assess premiums to cover the cost of insurance programs including the cost of administering the pro- gram. Insurance

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 18 26. The guarantee corporation may set out the minimum level of training that a director of a credit union must acquire in order to hold office. 27.

(1) A credit union may not make a loan to an associate member.

(2) An associate member of a credit union may be subject to those other restrictions that the superintendent may direct. 28.

(1) An audit committee established under

section 103 of the Act shall be composed of not less than 3 members of the credit union who are not employees or officers of the credit union and who may be either elected by the members or appointed by the board as provided for in the by-laws of the credit union, for a term not to exceed 3 years.

(2) The duties of the audit committee are to (

a) review the reasonableness and significance of the financial position and reported results in the audited financial state- ments of the credit union for the purpose of recommending to the directors that the audited financial statements be ap- proved under

section 92 of the Act; (

b) review the accounting princi ples and practices followed by the credit union during the fiscal year of the financial state- ments reviewed under paragraph (a), and all significant changes from the principles and practices followed during the preceding fiscal year; (

c) review the audited financial statements of the credit union's subsidiaries, if there are subsidiaries; (

d) discuss with the auditor the audit findings, restrictions on the scope of the auditor's work and problems that the auditor may have experienced in performing the audit; (

e) review the nature and extent of the auditor's evaluation of the internal control systems of the credit union; (

f) review the recommendations made by the auditor to the management of the credit union and the response made by management to the recommendations; Training Associate members Audit committee

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 19 (

g) review the organization and independence of the internal auditors of the credit union, including the internal auditors' goals and work plans and problems that they may have ex- perienced in performing the internal audit; (

h) review recommendations made by the internal auditors re- specting the improvement of accounting and internal control practices and the response made by management to the rec- ommendations; (

i) inquire into a change in ci rcumstance of the credit union that might reasonably be expected to materially and adversely af- fect the financial position of the credit union; (

j) report and make recommendations to the directors of the credit union arising from its duties under paragraphs (

b) to (

i) that the committee consider s appropriate in the circum- stances; (

k) report in writing to the members at the annual general meet- ing of the credit union on activities of the committee during the year; (

l) report to the directors of the credit union a conflict between the auditor and the management of the credit union that the committee has been unable to resolve within a reasonable period of time; and (

m) review recommendations that are made to the directors of a credit union by the guarantee corporation and review the re- sponses made by the directors to those recommendations to ensure the necessary changes are implemented.

(3) The audit committ ee shall ensure that a full and correct re- cord of all proceedings of the aud it committee is made and kept avail- able for examination by the guarantee corporation or a person author- ized under the Act to examine the records of a credit union. 29.

(1) Each credit union shall provi de to the guaran tee corporation a copy of its financial statements together with the report of the auditor, and a copy of the auditor's management letter, if there is one. Financial reporting

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 20

(2) Each credit union shall prov ide to the guarantee corporation periodic reports, that the guarantee corporation may require, within the time frames established by the guarantee corporation. 30.

(1) For the purpose of ensuring that a credit union is complying with the Act or following sound business and financial practices, the superintendent or person that the superintendent may authorize, may do the following: (

a) enter and inspect commercial premises used by the credit union; (

b) enter premises containing reco rds or property required to be kept under the Act or related to the affairs of the credit union and inspect those records or property and make those copies he or she considers necessary; (

c) require the credit union, incl uding a representative, agent, director, officer or employee of the credit union to provide the superintendent, or person authorized by the superinten- dent, with all reasonable assistance; (

d) make inquiries of the credit union mentioned in paragraph (c); (

e) require the representatives of the credit union to attend a meeting at a place and time set by the superintendent; (

f) after giving receipt, remove records or property and retain the records or property for the period the superintendent, or person authorized by the superintendent considers appropri- ate; and (

g) access credit union records el ectronically for the purposes of examination and monitoring of credit unions to ensure com- pliance with the Act, the regulations, and sound business and financial practices.

(2) The superintendent may serve a written demand on a person, including a trustee, or a director, officer or employee of a credit union, requiring that person to produce records or property required to be kept under the Act or these regulations or related to the affairs of the credit union. Audits, examina- tions, etc.

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 21 31.

(1) Where records are removed under

section 30, the superin- tendent, or person authorized by the superintendent, may make copies of those records.

(2) The superintendent, or a person authorized by the superin- tendent, shall (

a) make those copies within a reasonable period of time; and (

b) promptly return originals of the records to (

i) the place from which they were removed, or (ii) another place that may be agreed to by the superinten- dent, or the person authorized by the superintendent, and the person who furnished them or from whom they were seized.

(3) A record certified by the superintendent to be a copy made under this

section (

a) is admissible in evidence w ithout proof of the office or the signature of the person making the certificate; and (

b) has the same probative fo rce as the original record. 32.

(1) The records and information submitted or provided to the superintendent or obtained under

section 30 are not open to inspection except by (

a) those members of the public service whose responsibilities require them to inspect the records and information; or (

b) those persons who are authorized in writing by the superin- tendent to inspect the records and information.

(2) Unless authorized by the Act or another law or with the con- sent of the person to whom a record or piece of information relates, no person employed by the guarantee corporation and no person engaged, appointed or retained by the superintendent shall Records removed No inspection

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 22 (

a) communicate or allow to be communicated a record or in- formation obtained under the Act to a person who is not le- gally entitled to the record or information; or (

b) allow a person who is not legally entitled to the record or information obtained under the Act to inspect or have access to it.

(3) Despite subsections (1) and (2), the superintendent may au- thorize the release of, or allow the inspection of or access to, records or information mentioned in those subsections to or by a person employed by the government or regulatory authority of a jurisdiction inside or outside Canada where, (

a) the record or information will be used solely for the purpose of administering or enforcing a law of that jurisdiction that is similar to the Act; and (

b) the superintendent believes that it is in the public interest to allow the release, inspection or access.

(4) Despite subsections (1) and (2), the superintendent may au- thorize the release of, inspection of or access to, records or information mentioned in those subsections to or by a law enforcement agency or jurisdiction inside or outside Canada. 33.

(1) The by-laws of a credit union shall provide for a matter re- quired by the Act and these regulations to be included in those by-laws and shall provide for (

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

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

c) the election, term of office, removal of and filling of vacan- cies among directors, committee members and officers, their powers, duties and remuneration, and the procedure and quorum at meetings of the directors; By-laws

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 23 (

d) the number of shares a memb er shall hold if greater than the number of shares prescribed by these regulations; (

e) associate membership in the credit union; (

f) retention of membership in the credit union and all the rights and privileges of a member if the member of the credit union leaves the area in which the bond of the credit union author- izes the credit union to operate; (

g) joint memberships in a credit union that allows 2 or more persons to jointly hold a membership in a credit union but only entitles the joint membership to one vote; and (

h) other matters which by this Act are required to be dealt with in the by-laws. 34.

(1) The maximum amount that may be paid by the guarantee corporation in respect of deposits of a member or associate member shall be $250,000 for each insured deposit of that member.

(2) For the purpose of this section, an insured deposit is a de- posit covered under the insurance protection provided by the Canada Deposit Insurance Corporation (CDIC). 35.

(1) The guarantee corporation may make investments only in accordance with the investment policy established by its directors.

(2) The guarantee corporation may not make an investment in a credit union incorporated under the Act except for the purpose of pro- viding assistance for stabilization of credit unions in financial diffi- culty. 36. The guarantee corporation may (

a) borrow sums of money for its purposes that it considers nec- essary and may pledge security for the sums borrowed; and (

b) draw, make, accept, endorse, execute, and issue promissory notes, bills of exchange, warrants, and other negotiable or transferable instruments. Deposit insurance Investments by guarantee corpora- tion Borrowing by guarantee corpora- tion

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 24 37. The guarantee corporation may pay or direct the payment from the fund of all expenses necessarily incurred in performing its func- tions. 38. The guarantee corporation may (

a) make loans, advances, grants and guarantees it considers necessary in performing its functions; and (

b) charge interest on loans and advances. 39.

(1) The guarantee corporation shall annually assess and levy upon every credit union an amount not less than (a) 1/6 of 1% of total insured deposits if the credit union has met the equity requirements under subsection 22(1); and (b) 1/5 of 1% of total insured deposits where the credit union has not met the equity requirements under subsection 22(1).

(2) The amount assessed upon each credit union shall be deter- mined on the basis of the financial statements prepared under

section 91 of the Act.

(3) Each credit union shall pay to the guarantee corporation the full amount of the assessment within 30 days from the date of the in- voice or within an extended time that may be permitted and the guaran- tee corporation may levy interest on an overdue assessment at rates that may be determined by the board of the guarantee corporation.

(4) An assessment required to be paid by a credit union under this

section shall be charged and reported as an expense of the credit union. 40.

(1) For the purpose of

section 137 of the Act, the board of direc- tors of the guarantee corporation appointed by the minister shall consist of the following: (

a) the assistant deputy minister; (

b) the superintendent; (

c) one other member appointed by the minister; Payments by guar- antee corporation Loans by guarantee corporation Levies by guarantee corporation Board of guarantee corporation

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 25 (d) 3 members appointed by the minister from a list of nominees of the credit union system, to serve for a term of 3 years, unless removed by the minister; and (

e) one other member, at the mi nister's discretion, where the minister believes the appointment would be in the public in- terest.

(2) The assistant deputy minister shall serve as chairperson of the board and in the case of an equality of votes has a deciding vote.

(3) The vice-chairperson shall be appointed by the board from the members who were nominated by the credit union system.

(4) The superintendent shall serve as secretary treasurer to the board and shall be the Chief Execu tive Officer for the guarantee corpo- ration, as set out in subsection (6).

(5) The deputy superintendent shall be the Manager of Opera- tions of the guarantee corporation.

(6) There shall be established an office of Chief Executive Offi- cer for the guarantee corporation who shall direct the affairs of the guarantee corporation on behalf of the board.

(7) The board shall (

a) appoint committees it considers necessary for the purpose of the board; (

b) do all things necessary for the attainment of the purpose of the board; (

c) pay to members of the board remuneration that may be ap- proved by the minister; and (

d) pay to members of the board all reasonable travelling, living and out of pocket expenses, including salary and obligatory loss of annual leave in curred in the course of their duties as members.

Credit Union Regulations, 2009 56/09 Extraordinary Gazette July 2, 2009 26

(8) Employees required for the exercise of the powers and the performance of the duties of the guarantee corporation shall be ap- pointed by the board and the board may determine their duties.

(9) Every person, who was an employee of the guarantee corpo- ration immediately before April 1, 1994, retains his or her salary and benefits unless otherwise directed by the minister and is considered to have been employed in the manner provided by law. 41. The Credit Union Regulations, Newfoundland and Labrador Regulation 55/99, are repealed. ©Earl G. Tucker, Queen's Printer NLR 55/99 Rep.

27 ST. JOHN'S, THURSDAY, JULY 2, 2009 Index Title of Act and Subordinate Legislation CNLR or NL Gazette Extra made thereunder NL Reg. Amendment Date & Page No. Credit Union Act, 2009 Credit Union NLR 56/09 R&S July 2/09 p. 3 Regulations, 2009 NLR 55/99