This is an official version.

Copyright 2024: Queen’s Printer,

St. John's, Newfoundland and Labrador, Canada

Important Information

(Includes details about the availability of printed and electronic versions of the Statutes.)

Table of Public Statutes

Main Site

How current is this statute?

Responsible Department

SNL2009

CHAPTER C-37.2

CREDIT UNION ACT, 2009

Amended:

2014 cC-10.1 s59; 2020 c24; 2022 c24; 2024 c16

CHAPTER C-37.2

AN ACT RESPECTING CREDIT UNIONS

(Assented to May 28, 2009

Analysis

Short title

Definitions

Part prevails

Prohibition

PART I

INCORPORATION OF CREDIT UNIONS

Incorporation

Articles

By-laws

Application for incorporation

Certificate of incorporation

Business commencement requirements

Name

Prohibited names

Pre-incorporation contract

PART II

CAPACITY AND POWERS

Capacity

Jurisdiction outside province

Business of credit unions

Coercive tied selling

Subsidiaries and trade

Restrictions

No contravention notice

Reliance

PART III

REGISTERED OFFICE AND RECORDS

Registered office

Branch office

Records

24.1

Authorization of members

Examination of records

Form of records

PART IV

CAPITALIZATION AND OPERATING STANDARDS

Member shares

Shares other than members' equity shares

Dividend or patronage refund

Purchase of surplus shares

Exception

Liability limited

Remedy

Unclaimed balances

Member right to withdraw deposits

Trust funds

Deceased members and estate policy

Loans

Lien

Liquid assets

Investments

Doubtful loans

Equity

Borrowing

Interest rate risk

Insurance required

Sound business and financial practices

47.1

Policy relating to services provided by external parties

PART V

MEMBERSHIP

Membership

Bond of association

Membership termination

Remedy preserved

By-laws

Members bound

Meetings

Calling meetings

Record date

Notice of meetings

Waiver of notice

Member notice

Quorum

Voting

Corporate representation

Voting by proxy

Joint membership

Executors and administrators

Rep. by 2020 c24 s27

Requisition by members to call meeting

Meeting called by guarantee corporation

PART VI

DIRECTORS AND OFFICERS

Directors

Qualifications

Terms of office

Ceasing to hold office

Removal of directors

Reasons

Vacancy

Notice of change of directors

Meetings

Appointing committees

Establishing committees

Validity of acts

Resolution

Liability

Duty to report

83.1

Disclosure of interest in material contract

Designation of officers

Remuneration and expenses

Duty of care

Dissent

Indemnification

PART VII

RETURNS AND FINANCIAL DISCLOSURE

Fiscal year

Annual returns

Annual financial statements

Conditions re: financial statements

Request for documents

Auditors

Auditor removal

Vacancy

Auditor appointed by guarantee corporation

Duty to attend meetings

Examinations by auditor

Guarantee corporation

may enlarge scope

Right to demand information

Auditor's report

Audit committee

Duty of auditor

Additional requirements

Access to papers

Qualified privilege

No liability

PART VIII

FUNDAMENTAL CHANGES

Amendment of articles

Approval of articles

Certificate of amendment

Effect of certificate

Restated articles

Amalgamation

Amalgamation agreement

Approval of agreement

Articles of amalgamation

Compulsory amalgamation

Certificate and effect of amalgamation

Extraordinary sale, lease or exchange

Approval of guarantee corporation

Dissent

Reorganization under a court order

PART IX

DISSOLUTION AND LIQUIDATION

Mandatory dissolution

Voluntary dissolution by members

Voluntary liquidation and dissolution

Articles of dissolution and certificate

Custody of records

Effect of dissolution

Unclaimed property

Effect of Bankruptcy and Insolvency Act (Canada)

PART IX.1

FEDERAL CONTINUANCE

131.1

Statement of intent to apply for federal continuance

131.2

Authorization of application

131.3

Certificate of discontinuance

131.4

No reimbursement of levies paid

PART X

CREDIT UNION DEPOSIT GUARANTEE CORPORATION

Application

Continuation

Duties

Capacity

Powers

Board

Officers

138.1

Disclosure of interest in material contract

Vacancy

Office ceases

Management

Quorum

By-laws

Guaranteed deposit insurance

Prohibition

Deposit guarantee fund

Determination of levy

Manner of collection

Loans to guarantee corporation

Records

Fiscal year

151.1

Annual budget

Audit

Application

Payment of levy

Report to minister

PART XI

REMEDIES, OFFENCES AND PENALTIES

Definitions

Derivative action

Powers of court

Application to court

Application

Rectification of register

Compliance application

Application for direction

Appeal

Review and examination

Examination powers

Voluntary compliance

Compliance order

Offence

General offence

Compliance order following offence

Maintenance of action

PART XII

COMPLIANCE AND SUPERVISION

Supervision of credit union

Supervisor

Length of supervision

Powers of supervisor

Report

Accounting

PART XIII

GENERAL

Notice

Service of notice

Waiver of notice or delivery

Certificates

Signatures

Copies

Verification

Statement of intent

Alter notice or document

Corrected certificate

Examination of documents

Records

Superintendent

Register of credit unions

192.1

Protection from liability

Regulations

Fees and forms

PART XIV

TRANSITIONAL, REPEAL AND CONSEQUENTIAL AMENDMENTS

Transitional

Amending instruments

SNL1995 cC-37.1

CNLR 800/96 and

NLR 54/99 Rep.

Commencement

Be it enacted by the Lieutenant-Governor and House of Assembly in Legislative Session convened, as follows:

Short title

This Act may be cited as the Credit Union Act, 2009

2009 cC-37.2 s1

Back to Top

Definitions

In this Act

(a)

"articles" means

( i

the original or restated articles of incorporation, amendment, amalgamation, continuance, reorganization and dissolution of a credit union, and

(ii)

a statute or other constating instrument evidencing the corporate existence of a credit union continued as a credit union under this Act;

(b)

"associate member" means a person other than a member who has rights as set out in the by-laws and the regulations but that person shall not have a vote at a meeting of a credit union or become a director of a credit union;

(c)

"bond of association" means a characteristic common to all members of a credit union;

(d)

"court" means the Supreme Court of Newfoundland and Labrador;

(e)

"credit union" means a corporation incorporated or continued as a credit union under this Act and includes a caisse

populaire

(e.1)

"credit union trade association" means an association whose members are credit unions and which provides services to credit unions;

(f)

"deposit" means money placed in an account in a credit union by a member;

(g)

"director" in relation to a credit union means a person occupying in the credit union, the position of director by whatever name that person is called and "directors" and "board of directors" includes a single director;

(h)

"equity" means in relation to a credit union,

( i

the value of the consideration paid for membership shares and other shares issued by the credit union that are not redeemable within one year or another period as approved by the guarantee corporation,

(ii)

the book value of surplus shares issued by the credit union,

(iii)

the retained earnings of the credit union, and

(iv)

other capital items approved by the guarantee corporation,

unless the

credit union has an accumulated deficit, in which case it means the amounts determined under subparagraphs ( i

), (ii) and (iv) minus the accumulated deficit;

(h.1)

"federal continuance" means continuance as a federal credit union under the Bank Act

(Canada);

(h.2)

"federal credit union" means a federal credit union as defined in the Bank Act

(Canada);

(h.3)

"financial central" means a body corporate organized on cooperative principles by or under

an Act of a province or of Canada, one of whose principal purposes is to receive deposits from and provide liquidity support to credit unions, and whose

( i

membership consists solely or primarily of credit unions, and

(ii)

directors are wholly or primarily persons elected or appointed by credit unions;

( i

"guarantee corporation" means the Credit Union Deposit Guarantee Corporation continued under

section 133

(i.1)

"individual" means a natural person;

(i.2)

"material contract" includes a contract under which a credit union

( i

employs a person as a full-time employee,

(ii)

retains the services of a person otherwise than as an employee, or

(iii)

disposes of or acquires property whether by sale, purchase, lease or otherwise, for consideration that exceeds $5,000 in value;

(j)

"member" means a person who is a shareholder of a credit union and who, in accordance with the credit unions by-laws, qualifies for membership in that credit union;

(k)

"minister" means the minister appointed under the Executive Council Act

to administer this Act;

(k.1)

"officer" in respect of a credit union means

( i

the president, vice-president, secretary or treasurer,

(ii)

a person who performs functions for the credit union normally performed by a person mentioned in subparagraph ( i

), or

(iii)

another person designated as an officer by the by-laws or by a resolution of the directors;

(l)

"ordinary resolution" means a resolution passed by a majority of the votes cast by the members who voted in respect of that resolution;

(m)

"patronage refund" means an amount that under this Act is allocated among and credited or paid by a credit union to its members, based on the business done by each of them with the credit union;

(n)

"security" means a share or a debt obligation or a certificate evidencing a share or a debt obligation;

(o)

"security interest" means an interest in or charge upon property of a credit union or the guarantee corporation taken by a creditor to secure payment of a debt or performance of an obligation of a credit union or the guarantee corporation and includes a certificate evidencing a share or debt obligation;

(p)

"sound business and financial practices" means a set of stated business principles as set out by the guarantee corporation against which the credit unions' boards of directors and the credit unions' management personnel can measure their performance;

(q)

"special resolution" means a resolution passed by a majority of not less than 2/3 of the votes cast by the persons who voted in respect of that resolution or signed by all the persons entitled to vote on that resolution;

(r)

"subsidiary" means a corporation in which a credit union has a majority of the voting shares;

(s)

"superintendent" means the Superintendent of Credit Unions appointed under

section 191

; and

(t)

"supervisor" means the guarantee corporation or a person appointed by the guarantee corporation under

section 174 to supervise a credit union.

2009 cC-37.2 s2 ; 2020 c24 s1

Back to Top

Part prevails

Where a provision of

Part X is inconsistent with another provision of this Act, the provision of that Part prevails.

2009 cC-37.2 s3

Back to Top

Prohibition

A person shall not carry on the business of a credit union in the province unless the credit union is

(

a) incorporated under this Act;

(

b) continued under this Act; or

(

c) a federal credit union.

2009 cC-37.2 s4 ; 2020 c24 s2

PART I

INCORPORATION OF CREDIT UNIONS

Back to Top

Incorporation

(1)Twenty or more persons who are of the age of majority or older and are bondable may incorporate as a credit union.

(2) The incorporators shall apply for incorporation as a credit union by sending to the superintendent

(

a) the proposed articles of incorporation in a form acceptable to the superintendent;

(

b) the proposed by-laws that are required by the Act and the Regulations; and

(

c) other information that the superintendent may require.

2009 cC-37.2 s5 ; 2020 c24 s3

Back to Top

Articles

(1)Articles of incorporation of a credit union shall set out,

(

a) the name of the credit union;

(

b) the place in the province where the registered office is to be situated;

(

c) the name and residence address of each director;

(

d) a statement of the proposed bond of association of the credit union;

(

e) the classes and maximum number of shares that the credit union is authorized to issue other than membership shares, and where there will be 2 or more classes of shares the rights, privileges, restrictions and conditions attaching to each class of shares;

(

f) where the right to transfer shares of the credit union is to be restricted, a statement that the right to transfer shares is restricted and the nature of the restrictions; and

(

g) restrictions on the business that the credit union may carry on,

and shall provide for other matters which under this Act are required to be dealt with in the articles.

(2) The articles may set out provisions permitted by this Act to be set out in the by-laws of the credit union.

2009 cC-37.2 s6 ; 2020 c24 s4

Back to Top

By-laws

(1)A credit union shall establish by-laws which provide for those matters required by the regulations and the by-laws shall be approved by ordinary resolution of the members in attendance at a duly convened meeting of the credit union.

(2) The by-laws of a credit union may provide for matters in addition to those matters required by the regulations if the by-laws are not inconsistent with this Act.

2009 cC-37.2 s7

Back to Top

Application for incorporation

(1)The guarantee corporation may approve an application for incorporation as a credit union

(

a) where the guarantee corporation is satisfied that

( i

the proposed articles of incorporation and by-laws are in compliance with this Act,

(ii)

the applicants are qualified to establish and the proposed directors are qualified to establish and operate the proposed credit union, and

(iii)

sections 6 and 7 have been complied with; and

(

b) unless the guarantee corporation considers the application is contrary to the public interest.

(2) The superintendent shall if the guarantee corporation approves the application under subsection (1), file the articles of incorporation and by-laws submitted under subsection 5

(2) and shall issue a certificate of incorporation in accordance with

section 182

(3) The superintendent shall give notice of the issuing of a certificate of incorporation in the Gazette

2009 cC-37.2 s8

Back to Top

Certificate of incorporation

(1)A credit union comes into existence on the date shown in the certificate of incorporation.

(2) A certificate of incorporation shall be considered to be proof

(

a) that the provisions of this Act in relation to incorporation of a credit union and all requirements precedent and incidental to incorporation have been complied with; and

(

b) that the credit union has been incorporated under this Act on the date shown in the certificate of incorporation.

2009 cC-37.2 s9

Back to Top

Business commencement requirements

(1)A credit union incorporated under this Part shall not commence business in the province until the guarantee corporation has given approval for that commencement.

(2) The guarantee corporation shall not approve the commencement of business of a credit union unless that credit union has complied with the requirements that are prescribed by regulation for the commencement of business.

(3) Subsection (1) shall not prohibit business activities that are necessary to enable the credit union to meet the requirements of subsection (2).

(4) All deposits and share subscriptions taken in support of an application for incorporation of a credit union or before a credit union is approved to commence business shall be held in trust in the manner required by the guarantee corporation.

2009 cC-37.2 s10

Back to Top

Name

(1)A credit union shall include the words "credit union" or the words " caisse

populaire

" in its name and the word "Limited" or " Limitee

" or the abbreviation "Ltd." or " Ltee

" as the last word of that credit union's name.

(2) A credit union shall clearly identify itself and set out its name in legible characters in all contracts, invoices, negotiable instruments, seals, orders, advertising and other representations to the public.

(3) A credit union may carry on business by a name other than its full name, provided that the words "credit union" or " caisse

populaire

" are included in that name.

(4) A person or association of persons shall not

(

a) use the words "credit union" or " caisse

populaire

" or a derivative or abbreviation of those words as part of its name; or

(

b) conduct business in the province in a manner that might lead to the belief that that person or association of persons is carrying on business as a credit union,

unless the person or association of persons is incorporated or continued under this Act or is a federal credit union.

(5) Subsection (4) does not apply to the guarantee corporation.

(6) [Rep. by 2020 c24 s5]

2009 cC-37.2 s11 ; 2020 c24 s5

Back to Top

Prohibited names

(1)A credit union shall not carry on business under a name

(

a) that is identical to the name of an existing or a dissolved credit union except as may be prescribed by regulation;

(b)

(

c) that includes the word "loan", "trust", "mutual", "insurance" or "securities"; or

(

d) which in the opinion of the superintendent is contrary to public interest.

(2) A credit union shall not carry on business under a name that is similar to the name of another business, association or corporation if the use of that name by the credit union would, in the opinion of the superintendent, be likely to confuse or mislead, unless the business, association or corporation consents in writing to its name being given in whole or in part to the credit union and, if required by the superintendent, the business, association or corporation undertakes to dissolve or to change its name within 6 months after the incorporation of the credit union.

(3) Where a credit union is granted a name subject to an undertaking given under subsection (2) and the undertaking is not carried out within the specified time, the superintendent may direct the credit union to which the name is granted to change its name to a name that complies with this Act.

(4) Where a credit union

(

a) comes into existence or is continued with a name; or

(

b) upon an application to change its name, is granted a name,

that violates this section, the superintendent may direct the credit union to change its name.

(5) Where a credit union is directed under subsections (3) or (4) to change its name and fails within 60 days after the service of that directive to change its name to a name that complies with this Act, the superintendent may revoke the name of the credit union and assign to it a name or number and, until changed in accordance with

section 109, the name or number of the credit union is the name or number assigned.

(6) Where a credit union has had its name revoked and a name or number assigned to it under subsection (5), the superintendent shall issue a certificate of amendment showing the new name of the credit union and shall give notice of the change of name in the Gazette

2009 cC-37.2 s12 ; 2020 c24 s6

Back to Top

Pre-incorporation contract

(1)Except as provided in this section, a person who enters into a contract in the name of or purportedly on behalf of a credit union before it comes into existence is personally bound by the contract and is entitled to the benefits of it.

(2) A credit union may, within a reasonable time after it comes into existence, by an action or conduct signifying its intention to be bound by it, adopt an oral or written contract made before it came into existence in its name or on its behalf, and on that adoption

(

a) the credit union is bound by the contract and is entitled to the benefits of it as if the credit union had been in existence at the date of the contract and had been a party to it; and

(

b) a person who purported to act in the name of or on behalf of the credit union ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

(3) Except as provided in subsection (4), whether or not an oral or written contract made before the coming into existence of a credit union is adopted by the credit union, a party to the contract may apply, within a reasonable time after the date of incorporation of the credit union, to the court for an order fixing obligations under the contract as joint or joint and individual or apportioning liability between or among the credit union and a person who purported to act in the name of or on behalf of the credit union and a judge of the court may make an order that the judge considers appropriate.

(4) Where expressly provided in the oral or written contract, a person who purported to act in the name of or on behalf of the credit union before it came into existence is not bound by the contract or entitled to the benefits of it.

2009 cC-37.2 s13 ; 2022 c24 s1

PART II

CAPACITY AND

POWERS

Back to Top

Capacity

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

2009 cC-37.2 s14

Back to Top

Jurisdiction outside province

(1)A credit union may, with the approval of the guarantee corporation, carry on its business, conduct its affairs and exercise its powers in a jurisdiction outside the province to the extent that the laws of that jurisdiction permit.

(2) A credit union may enter into joint services with other credit unions to provide services to its members who reside in the province and to its members that move and reside outside the province.

2009 cC-37.2 s15

Back to Top

Business of credit unions

(1)A credit union may carry on the business of a credit union as permitted by the Act and, unless otherwise restricted may,

(

a) receive deposits from and operate chequing services for its members;

(

b) make loans to its members;

(

c) sell life insurance products through its branches either through an affiliate, by contractual arrangement or in the capacity of a licensed agent or broker as defined in the Insurance Adjusters, Agents and Brokers Act

, including but not limited to

( i

life insurance,

(ii)

disability insurance,

(iii)

annuities,

(iv)

segregated funds,

(

v) critical illness insurance, and

(vi)

long term care insurance; and

(

d) provide other financial services including wealth management, mutual funds, financial planning and taxation services.

(2) A credit union shall not carry on a business other than that pertaining to the business of credit unions and a credit union shall not

(

a) engage in the trading of real estate;

(

b) except as authorized under another Act of the province, execute the office of executor, administrator, guardian of a minor's estate or of a mentally disabled person or provide services of a fiduciary nature commonly provided by a trust company;

(

c) issue securities on behalf of another person or otherwise carry on the business of a securities dealer;

(

d) carry on the business of an insurance company; or

(

e) carry on the business of a property and casualty agent, broker or adjustment company.

(3) Notwithstanding subsections (1) and (2), a credit union may, in the manner prescribed by regulation, enter into an arrangement for services.

2009 cC-37.2 s16 ; 2020 c24 s7

Back to Top

Coercive tied selling

(1)A credit union shall not engage in coercive tied selling that imposes undue pressure on, or coerces a person to obtain a product or service from a particular person, including the credit union and its affiliates, as a condition for obtaining another product or service from the credit union.

(2) Nothing in subsection (1) precludes a credit union

(

a) from requiring insurance to be placed by a member for the security of a credit union; or

(

b) from entering into those group plans of insurance as may be prescribed by regulation with an insurance agency or company for the security of a credit union or for the benefit of its members.

2009 cC-37.2 s17

Back to Top

Subsidiaries and trade

(1)A credit union may establish a subsidiary corporation as prescribed by regulation.

(2) Except as provided under this Act, a credit union shall not, directly or indirectly, through a subsidiary or otherwise, deal in goods, wares and merchandise or engage in a trade or other business.

2009 cC-37.2 s18

Back to Top

Restrictions

(1)A credit union shall not carry on a business or exercise a power if it is restricted by its articles, by-laws or this Act or the regulations from carrying on that business or exercising that power and shall not exercise its powers in a manner contrary to its articles, by-laws or this Act.

(2) An act of a credit union against good faith third party purchasers, including a transfer of property to or by a credit union, is not invalid by reason only that the act or transfer is contrary to its articles, by-laws or this Act.

2009 cC-37.2 s19

Back to Top

No contravention notice

A person is not affected by and shall not be considered to have notice or knowledge of the contents of a document concerning a credit union by reason only that the document has been filed with the superintendent or is available for inspection at an office of the credit union.

2009 cC-37.2 s20

Back to Top

Reliance

A credit union or a guarantor of an obligation of the credit union may not assert against a person dealing with the credit union or with a person who has acquired rights from the credit union that

(

a) this Act, the regulations, articles or by-laws of the credit union have not been complied with;

(

b) the persons named as directors in the most recent notice sent to the superintendent under this Act are not the directors of the credit union;

(

c) the place named in the most recent notice sent to the superintendent under this Act is not the registered office of the credit union;

(

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

(

e) a document issued by a director, officer or agent of the credit union with actual or usual authority to issue the document is not valid or genuine; and

(

f) financial assistance to members or directors or a sale, lease or exchange of all or substantially all of the property of the credit union was not authorized,

except where the person has or, by virtue of that person's position with or relationship to the credit union ought to have, knowledge of that fact.

2009 cC-37.2 s21

PART III

REGISTERED OFFICE AND

RECORDS

Back to Top

Registered office

(1)A credit union shall at all times have a registered office in the place within the province specified in its articles.

(2) A notice of registered office shall be sent to the superintendent together with the articles that designate the place of the registered office of the credit union.

(3) The directors of a credit union may change the address of the registered office within the place specified in the articles.

(4) A credit union shall file a notice of a change of registered office with the superintendent within 15 days after a change of address of its registered office.

2009 cC-37.2 s22

Back to Top

Branch office

A credit union may establish or relocate a branch office of the credit union as prescribed by regulation.

2009 cC-37.2 s23

Back to Top

Records

A credit union shall prepare and maintain, at its registered office or at another place in the province designated by the directors, records containing

(

a) copies of the articles and the by-laws and all amendments to them;

(

b) the executed minutes of membership meetings and resolutions of members;

(

c) a register of directors, officers and committee members setting out the names and residence addresses of all persons who are or have been directors, officers or committee members of the credit union with the dates on which each became or ceased to be a director, an officer or a committee member;

(

d) a members' register setting out the names and the latest known addresses of its members and the number and issue price of the membership shares held by each member; and

(

e) the accounting records and the minutes of the meetings of the board and committees and resolutions of the directors and a committee appointed by the directors.

2009 cC-37.2 s24 ; 2020 c24 s8

Authorization of members

24.1

(1)A credit union shall obtain the written authorization of a member before including the member's name and address in the members' register that is available for examination in accordance with

section 25.

(2) A credit union shall not disclose the name or address of a member who does not give the authorization referred to in subsection (1).

2020 c24 s9

Back to Top

Examination of records

(1)The members of a credit union, their agents and legal representatives may examine the records referred to in paragraphs 24

(a), (

b) and (

c) during the normal business hours of the credit union and may take extracts from them without charge.

(2) The members of the credit union, their agents and legal representatives may examine the members' register referred to in paragraph 24

(

d) during the normal business hours of the credit union and may, on payment of a reasonable fee, receive from the credit union a copy of the members' register.

(3) A request made under subsection (1) shall have attached an affidavit of the applicant that

(

a) states the name and address of the applicant;

(

b) is made by a director or officer of the corporation if the applicant is a corporation; and

(

c) states that the register shall not be used by a person except for the purpose relating to the affairs of the credit union.

(4) A person shall not use the register of members for purposes not related to the affairs of the credit union.

(5) Subject to subsection 24.1(2), a credit union shall make the members' register available at any meeting of members for examination by the members.

(6) The directors of a credit union or the authorized representative of the board of directors may examine the records of the credit union at all reasonable times without charge.

(7) The guarantee corporation or a person authorized by the guarantee corporation may examine the records of a credit union at all reasonable times without charge.

2009 cC-37.2 s25 ; 2020 c24 s10

Back to Top

Form of records

(1)All registers and records required by this Act to be prepared and maintained by a credit union shall be kept by the credit union in the form and manner prescribed in the regulations.

(2) A credit union and its agents shall take reasonable precautions to

(

a) prevent loss or destruction of;

(

b) prevent falsification of entries in; and

(

c) facilitate detection and correction of inaccuracies in,

the registers and other records required by this Act to be prepared and maintained.

2009 cC-37.2 s26 ; 2020 c24 s11

PART IV

CAPITALIZATION AND

OPERATING STANDARDS

Back to Top

Member shares

(1)Member equity shares of a credit union shall have an issue price fixed by the articles and that price shall not be less than $5 a share.

(2) A member of a credit union shall purchase and hold not fewer than the number of fully paid member equity shares that is prescribed by regulation.

(3) Notwithstanding subsection (2), the by-laws of a credit union may permit or require that members hold more than the number of member equity shares that are prescribed by regulation.

2009 cC-37.2 s27

Back to Top

Shares other than members' equity shares

In addition to member equity shares, the articles of a credit union may provide for the issuing of surplus shares and other shares in accordance with the regulations.

2009 cC-37.2 s28 ; 2020 c24 s12

Back to Top

Dividend or patronage refund

A credit union that has met the capital requirement prescribed in the regulations may, in accordance with its by-laws, issue a dividend or patronage refund provided that the dividend or patronage refund does not reduce capital below that prescribed in the regulations.

2009 cC-37.2 s29 ; 2020 c24 s13

Back to Top

Purchase of surplus shares

A credit union may in its by-laws provide that the whole of a patronage refund or dividend on shares to be paid or credited to a member, or a part of the patronage refund or dividends on shares that may be specified in the by-laws of the credit union, may be applied to purchase on behalf of the member, surplus shares of the credit union, up to the number that may be specified in the by-laws.

2009 cC-37.2 s30

Back to Top

Exception

(1)Nothing in

section 29

affects the payment of a dividend on shares other than member equity or surplus shares if the dividend is required to be paid in accordance with the terms of a share certificate.

(2) A payment authorized under subsection (1) shall be disclosed in the notes of the financial statements of the credit union.

2009 cC-37.2 s31

Back to Top

Liability limited

A member is not responsible for

an act, default or liability of the credit union or for an engagement, claim, payment, loss, injury, transaction, matter or thing relating to or connected with the credit union.

2009 cC-37.2 s32

Back to Top

Remedy

This Act shall not curtail, abridge or defeat a remedy for the recovery

(

a) from the borrower of money loaned by a credit union in violation of this Act; and

(

b) from the member of a credit union of an amount withdrawn in excess of the amount contained in a member's deposit account.

2009 cC-37.2 s33

Back to Top

Unclaimed balances

Where a deposit account contains less than an amount prescribed by regulation and business has not been transacted in connection with the account over a period prescribed by regulation, the credit union may deal with the account in accordance with the regulations.

2009 cC-37.2 s34

Back to Top

Member right to withdraw deposits

(1)A member may withdraw an amount contained in the members deposit account together with accrued interest

(

a) during the normal business hours of the credit union at the credit union; or

(

b) through electronic withdrawal that may be provided by the credit union.

(2) [Rep. by

2020 c24 s14]

(3) Subsection (1) does not apply to

(

a) deposits placed with a credit union for a stated term;

(

b) an amount contained in a deposit account on which a bill of exchange payable on demand may be drawn; or

(

c) deposits on which a lien is placed as collateral for an amount borrowed from the credit union.

2009 cC-37.2 s35 ; 2020 c24 s14 ; 2022 c24 s2

Back to Top

Trust funds

(1)Except where the credit union is the trustee, a credit union is not required to see to the execution of a trust, whether express, implied or constructive, to which a share or deposit is subject.

(1.1) Where an account is subject to a trust of which the credit union has notice, the cheque, bill of exchange, withdrawal slip, copy of electronic transaction or receipt of the person

(

a) in whose name the account is held; or

(

b) who is, according to the document creating the trust, entitled to deal with the trust,

is, notwithstanding the trust, sufficient authorization to and a valid and binding discharge of the credit union and the credit union is not required to see to the application of money paid in relation to that cheque, bill of exchange, withdrawal slip, electronic transaction or receipt.

2009 cC-37.2 s36 ; 2020 c24 s15

Back to Top

Deceased members and estate policy

A credit union shall establish a policy relating to deceased members and their estates in accordance with the regulations.

2009 cC-37.2 s37 ; 2020 c24 s16

Back to Top

Loans

A credit union shall establish loan policies in relation to the lending activities of the credit union in accordance with the regulations.

2009 cC-37.2 s38 ; 2020 c24 s16

Back to Top

Lien

(1)Notwithstanding another provision of this Act, a credit union has a lien on the deposits and shares of a member or other person to whose credit the deposits and shares stand in the records of the credit union, and interest on them, for indebtedness due or accruing due to it by the member or other person or for an obligation in relation to the indebtedness and the deposits and shares may not be withdrawn or redeemed unless the credit union consents.

(2) A credit union may apply the deposits and shares on which it has a lien, and interest on them, to an obligation in relation to the indebtedness which is in default without notice to any person.

(3) For the purposes of subsection (2), an indebtedness shall be considered to be in default where

(

a) an amount of the principal or interest is not paid on the date on which it becomes due and payable; or

(

b) there has been a failure to observe or perform an obligation with respect to the indebtedness.

2009 cC-37.2 s39

Back to Top

Liquid assets

(1)A credit union shall maintain liquidity in accordance with the regulations.

(2) A credit union may make investments for the purpose of meeting the requirements in relation to liquidity only in accordance with the regulations.

(3) Notwithstanding subsections (1) and (2), the guarantee corporation may, where it determines it necessary,

(

a) exempt a credit union from the liquidity and investment requirements prescribed in the regulations; and

(

b) set the liquidity and investment requirements for the credit union.

(4) The guarantee corporation may, where it considers it necessary, revoke an exemption provided under paragraph (3)(a).

(5) Where the guarantee corporation revokes an exemption in accordance with subsection (4), the credit union shall comply with the liquidity and investment requirements in the regulations.

2009 cC-37.2 s40 ; 2024 c16 s1

Back to Top

Investments

A credit union may make investments in addition to those referred to in subsection 40(2) only in accordance with the regulations.

2009 cC-37.2 s41

Back to Top

Doubtful loans

A credit union shall maintain an allowance for doubtful loans in accordance with the regulations.

2009 cC-37.2 s42

Back to Top

Equity

A credit union shall maintain equity in accordance with the regulations.

2009 cC-37.2 s43

Back to Top

Borrowing

A credit union shall not borrow money in excess of the amount prescribed by regulation.

2009 cC-37.2 s44

Back to Top

Interest rate risk

A credit union shall manage interest rate risk in accordance with the regulations.

2009 cC-37.2 s45 ; 2020 c24 s17

Back to Top

Insurance required

A credit union shall maintain those types and minimum levels of insurance that may be required by the guarantee corporation or as may be prescribed by regulation.

2009 cC-37.2 s46

Back to Top

Sound business and financial practices

A credit union shall comply with sound business and financial practices that are set out by the guarantee corporation.

2009 cC-37.2 s47

Back to Top

Policy relating to services provided by external parties

47.1

A credit union shall establish a policy relating to services provided by an external party in accordance with the regulations.

2020 c24 s18

PART V

MEMBERSHIP

Back to Top

Membership

(1)The membership of a credit union consists of those members defined in accordance with this Act and the articles and by-laws of the credit union.

(2) Subject to the by-laws of the credit union and laws of general application, a credit union may refuse to accept an application for membership if it is satisfied that it is not in the interest of the credit union to accept the application.

(3) A person under the age of majority may be accepted as a member of a credit union and shares may be held and money may be received by the credit union in that person's name or in the name of a trustee for that person if the trustee is a member or is eligible to be a member of the credit union.

(4) A credit union may, where provided in its articles and by-laws and in accordance with the regulations, provide associate membership in that credit union.

(5) A credit union shall not be a member or an associate member of another credit union.

2009 cC-37.2 s48 ; 2020 c24 s19

Back to Top

Bond of association

(1)The articles of a credit union may provide that membership in the credit union shall be limited to groups having a bond of association.

(2) Notwithstanding subsection (1), a member of the credit union who leaves a group having a bond of association may retain membership in the credit union and all the rights and privileges of a member where the by-laws of the credit union so provide.

2009 cC-37.2 s49

Back to Top

Membership termination

Membership in a credit union may be terminated, withdrawn or refused in accordance with the by-laws of the credit union.

2009 cC-37.2 s50

Back to Top

Remedy preserved

The termination of or withdrawal from membership in a credit union does not release a person from a liability to the credit union.

2009 cC-37.2 s51

Back to Top

By-laws

(1)Subject to the articles of a credit union, the members of a credit union may, in accordance with the regulations, enact, amend or repeal by-laws in relation to the matters authorized or required by this Act to be dealt with in the by-laws of the credit union.

(2) Notwithstanding subsection (1), the enactment, amendment or repeal of a by-law is not effective until it is approved by the guarantee corporation.

2009 cC-37.2 s52 ; 2020 c24 s20

Back to Top

Members bound

The articles and by-laws of a credit union bind the credit union and its members.

2009 cC-37.2 s53

Back to Top

Meetings

Meeting of the members shall be held in accordance with the by-laws of the credit union.

2009 cC-37.2 s54 ; 2020 c24 s21

Back to Top

Calling meetings

The directors of a credit union

(

a) shall call an annual meeting of members to be held within 4 months, or another time that is approved by the guarantee corporation, after the end of the fiscal year of the credit union

( i

to consider the annual report of the directors, the financial statements of the credit union and the auditor's report,

(ii)

to appoint the auditor,

(iii)

to elect directors, and

(iv)

to deal with other matters that may properly come before the meeting; and

(

b) may call a special meeting of members.

2009 cC-37.2 s55 ; 2020 c24 s22

Back to Top

Record date

The record date for determining the members entitled to receive notice of a meeting of members and entitled to vote at that meeting shall be at the close of business 30 days preceding the day on which the notice is given.

2009 cC-37.2 s56

Back to Top

Notice of meetings

(1)Notice of the time of a meeting of members and the manner in which the meeting is to be held shall be given to each member entitled to vote at the meeting not less than 14 days and not more than 30 days before the meeting.

(2) Where a meeting of members is adjourned by one or more adjournments for more than 7 days, notice of the adjourned meeting shall be given as for an original meeting.

(3) All business transacted

(

a) at a special meeting of members; or

(

b) at an annual meeting of members, except consideration of the annual report of the directors, the financial statements of the credit union, the auditor's report, election of directors, appointment of the auditor and other business authorized by the by-laws to be transacted at an annual meeting,

shall be considered to be special business.

(4) Notice of a special meeting of members shall state

(

a) the nature of that business in sufficient detail to permit the member receiving the notice to form a reasoned judgment on it; and

(

b) the text of a special resolution to be submitted to the meeting or, if the full text is too lengthy for convenient inclusion in the notice, a

summary of the text.

2009 cC-37.2 s57 ; 2020 c24 s23

Back to Top

Waiver of notice

(1)A member or another person entitled to attend a meeting of members may waive notice of the meeting, and attendance of the member or other person at the meeting is a waiver of notice of the meeting, except where that person attends for the express purpose of objecting to the transaction of business on the ground that the meeting was not lawfully called.

(2) An objection made under subsection (1) shall be made at the commencement of the meeting.

2009 cC-37.2 s58

Back to Top

Member notice

(1)A member entitled to vote at a meeting of members may

(

a) submit to the board of directors of the credit union notice of a matter that the member proposes to raise at the meeting, afterwards referred to as a "proposal"; and

(

b) discuss at the meeting a matter in respect of which the member would have been entitled to submit a proposal.

(2) A credit union shall set out a proposal in the notice of the meeting at which the proposal is to be presented.

(3) Where requested by a member submitting a proposal, the credit union shall include in the notice of meeting or attach to it a statement by the member of not more than 200 words in support of the proposal, and the name and address of the member.

(4) A proposal may include nominations for the election of directors if the election of those nominated as directors would conform with the provisions of this Act, the articles and the by-laws of the credit union.

(5) A credit union is not required to comply with subsections (2) and (3) where

(

a) the proposal is not submitted to the credit union at least 30 days before the anniversary date of the previous annual meeting of members;

(

b) the directors of the credit union reasonably believe that the proposal is submitted by the member primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the credit union or its directors, officers or members or for a purpose that is not related in a significant way to the business or affairs of the credit union;

(

c) the credit union, at the member's request, included a proposal in a notice of meeting of members held within 2 years preceding the receipt of that request and the member failed to present the proposal at that meeting;

(

d) substantially the same proposal was submitted to the members in a notice of a meeting of members held within 2 years preceding the receipt of the member's request, and the proposal was defeated; or

(

e) the directors of the credit union reasonably believe that the rights conferred by this

section are being abused to secure publicity.

(6) A credit union or person acting on its behalf shall not incur liability by reason only of circulating a proposal or statement in compliance with this section.

(7) Where a credit union refuses to include a proposal in a notice of meeting, the credit union shall, within 10 days after receiving the proposal, notify the member submitting the proposal of its intention to omit the proposal from the notice of meeting and send to the member a statement of the reasons for the refusal.

(8) On the application of a member claiming to be aggrieved by a refusal under subsection (7), the court may restrain the holding of the meeting to which the proposal is sought to be presented and make another or further order it thinks appropriate.

(9) The credit union or a person claiming to be aggrieved by a proposal may apply to the court for an order permitting the credit union to omit the proposal from the notice of meeting, and the court, where it is satisfied that subsection (5) applies, may make an order that it thinks appropriate.

(10) An applicant under subsection (8) or (9) shall give the guarantee corporation notice of the application and the guarantee corporation is entitled to appear, be represented and be heard in person or by counsel.

2009 cC-37.2 s59 ; 2020 c24 s24

Back to Top

Quorum

(1)A quorum at a meeting of members shall be as set out in the by-laws of the credit union.

(2) Where a quorum is not present at the opening of, or during, a meeting of members, the members present shall adjourn the meeting to a fixed time and place.

2009 cC-37.2 s60

Back to Top

Voting

(1)A member of a credit union who is the age of majority or older may vote at a meeting of members.

(2) A member of a credit union has only one vote on a question that may be voted on at a meeting of members.

(3) The by-laws of a credit union may provide for the manner of voting, including the right to vote by ballot, mail, telephone or electronic means.

2009 cC-37.2 s61 ; 2020 c24 s25

Back to Top

Corporate representation

(1)Where a corporation or association of persons is a member of a credit union, the credit union shall recognize an individual authorized by a resolution of the directors or governing body of the corporation or association of persons to represent it at meetings of members of the credit union.

(2) Notwithstanding

section 63

, an individual authorized under subsection (1) may exercise, on behalf of the corporation or association that person represents, all the powers the corporation or association could exercise if it were an individual.

2009 cC-37.2 s62 ; 2020 c24 s26

Back to Top

Voting by proxy

A member shall not vote by proxy at a meeting of members of a credit union.

2009 cC-37.2 s63

Back to Top

Joint membership

A credit union may in its by-laws provide that 2 or more persons may jointly hold a membership in a credit union but that membership is entitled to only one vote.

2009 cC-37.2 s64

Back to Top

Executors and administrators

An executor or administrator holding a membership in a credit union in the capacity of executor or administrator shall represent that membership at meetings of the credit union and may vote as a member.

2009 cC-37.2 s65

Back to Top

Rep. by 2020 c24 s27

[Rep. by 2020 c24 s27]

2020 c24 s27

Back to Top

Requisition by members to call meeting

(1)The directors shall call a special meeting of the members on receipt of a written request specifying the purpose of the meeting from the lesser of 10% of the members or 500 members of the total credit union membership having a right to vote at the meeting.

(2) The request referred to in subsection (1), may consist of several documents in the same form, each signed by one or more members and shall state the business to be transacted at the meeting and shall be sent to the registered office of the credit union.

(3) On receiving the request referred to in subsection (1), the directors shall call a meeting of members to transact the business stated in the request, unless the business of the meeting as stated in the request includes a matter described in paragraphs 59(5)(

b) to (e).

(4) Where the directors do not, within 30 days after receiving the request referred to in subsection (1), call a meeting, a member who signed the request may call the meeting.

(5) A meeting called, held and conducted in accordance with this

section is for all purposes a properly called, held and conducted meeting of members of the credit union.

(6) Unless the members otherwise resolve at a meeting called under subsection (4), the credit union shall reimburse the members for the expenses reasonably incurred by them in requesting, calling and holding the meeting.

(7) A member calling a meeting under subsection (4) shall give the guarantee corporation at least 30 days notice of the application and the guarantee corporation is entitled to appear, to be represented and be heard in person or by counsel.

2009 cC-37.2 67 ; 2020 c24 s28

Back to Top

Meeting called by guarantee corporation

(1)Where it is impractical to call a meeting of members of a credit union in the manner in which meetings of members may be called or to conduct the meeting in the manner required by this Act and the by-laws, or for another reason the guarantee corporation considers appropriate, the guarantee corporation may order a meeting to be called, held and conducted in a manner that it directs.

(2) The guarantee corporation may order that the quorum required by this Act or the by-laws be varied or dispensed with at a meeting called, held and conducted in accordance with this section.

(3) A meeting called, held and conducted in accordance with this

section is for all purposes a properly called, held and conducted meeting of members of the credit union.

2009 cC-37.2 s68 ; 2020 c24 s29

PART VI

DIRECTORS AND

OFFICERS

Back to Top

Directors

(1)A credit union shall in its by-laws establish a fixed number of directors, which number shall not be fewer than 5.

(2) The directors of a credit union shall

(

a) exercise the powers of the credit union directly or indirectly through the employees and agents of the credit union; and

(

b) direct the management of the business and affairs of the credit union.

2009 cC-37.2 s69

Back to Top

Qualifications

(1)An individual who

(

a) is a citizen or permanent resident of Canada;

(

b) is of the age of majority or older;

(

c) is a member of the credit union; and

(

d) satisfies the requirements set out in the by-laws of the credit union,

may be a director of a credit union.

(2) Notwithstanding subsection (1), the following persons are disqualified from being a director of a credit union:

(

a) an undischarged bankrupt person;

(

b) an employee of a credit union or the guarantee corporation;

(

c) an individual who is not bondable;

(

d) an auditor of the credit union or a member of the auditor's firm;

(

e) a parent, child, grandchild, spouse, brother or sister or an in-law of an employee of the credit union, not necessarily living in the same residence of that employee;

(

f) the solicitor of the credit union;

(

g) a director or employee of a bargaining agent for the employees of the credit union; or

(

h) a public employee whose official duties are concerned with the affairs of credit unions.

2009 cC-37.2 s70 ; 2020 c24 s30

Back to Top

Terms of office

(1)A director named in the articles holds office from the issue of the certificate of incorporation until the first meeting of members.

(2) The members of a credit union shall, by ordinary resolution at the first meeting of the members and at each succeeding annual meeting of the members at which an election of directors is required, elect directors to hold office for a term established in the by-laws and that term shall not exceed 3 years.

(3) [Rep. by 2020 c24 s31]

(4) It is not necessary that all directors elected at a meeting of members hold office for the same term.

(5) Notwithstanding anything contained in this section, if directors are not elected at a meeting of the members, the incumbent directors continue in office until their successors are elected.

2009 cC-37.2 s71 ; 2020 c24 s31

Back to Top

Ceasing to hold office

(1)A director of a credit union ceases to hold office when the director

(

a) dies or resigns;

(

b) is removed from office in accordance with

section 73

; or

(

c) is disqualified under

section 70

(2) A resignation of a director becomes effective at the time a written resignation is received by the credit union, or at the time specified in the resignation, whichever is later.

2009 cC-37.2 s72 ; 2022 c24 s3

Back to Top

Removal of directors

(1)The members of a credit union may by ordinary resolution at a special meeting called under

section 67

remove a director from office.

(2) A vacancy created by the removal of a director from office may be filled at the meeting of the members at which the director is removed or, if not so filled, may be filled under

section 75

(3) Where a vacancy is not filled under subsection (2), the guarantee corporation may appoint a director to fill that vacancy.

2009 cC-37.2 s73 ; 2020 c24 s32

Back to Top

Reasons

(1)A director who

(

a) resigns;

(

b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing the director from office; or

(

c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed or elected to fill the office of director instead of that person whether because of that person's resignation or removal or because that person's term of office has expired or is about to expire,

is entitled to submit to the credit union a written statement giving the reasons for the resignation or for opposing an action or resolution proposed for the purposes described in paragraphs (

b) and (c).

(2) Where a director resigns under paragraph (1)(a), the director may request that the credit union send to members of the credit union and the guarantee corporation, a copy of the statement referred to in subsection (1) and where a request is made, the credit union shall immediately comply with that request.

(3) Where a director receives a notice under paragraphs (1)(

b) or (c), the credit union shall immediately send a copy of the statement referred to in subsection (1) to members of that credit union and to the guarantee corporation.

(4) A credit union or person acting on its behalf shall not incur liability by reason only of circulating a statement in compliance with subsections (2) or (3).

2009 cC-37.2 s74 ; 2020 c24 s33 ; 2022 c24 s4

Back to Top

Vacancy

(1)A quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in the number of directors or from the members' failure to elect the required number of directors.

(2) Where the members fail to elect the required number of directors at a meeting, the directors elected at that meeting may exercise all the powers of the directors where the number of directors so elected constitutes a quorum.

(3) Where there is a failure to elect the required number of directors at a meeting of members, the directors then in office shall immediately call a meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors then in office, the meeting may be called by a member.

(4) Notwithstanding subsection (1), the articles or by-laws may provide that a vacancy among the directors shall be filled only by a vote of the members.

(5) Where a vacancy among the directors is filled in accordance with subsection (1), the director shall hold office until an election is held, which election shall be held no later than the next annual general meeting.

2009 cC-37.2 s75 ; 2020 c24 s34

Back to Top

Notice of change of directors

(1)Where there is a change in the directors of a credit union, the credit union shall send to the superintendent and the guarantee corporation a notice setting out the change and the superintendent shall file the notice.

(2) A credit union shall send the notice referred to in subsection (1) to the superintendent and the guarantee corporation

(

a) within 30 days after the change of directors; or

(

b) on or before the time specified by the guarantee corporation where the guarantee corporation has approved an extension of the 30 day period referred to in paragraph (a).

(3) A person, the superintendent or the guarantee corporation may apply to the court for an order requiring a credit union to comply with subsection (1), and on the application the court may make the order and any further orders it thinks appropriate.

(4) A director named in the articles or in a notice sent by the credit union to the superintendent and the guarantee corporation under subsection (1) is presumed for the purposes of this Act to be a director of the credit union.

2009 cC-37.2 s76 ; 2020 c24 s35

Back to Top

Meetings

(1)Unless the articles or by-laws otherwise provide, the directors of a credit union may meet in a manner and on the notice that the directors may determine.

(2) Unless the articles or by-laws otherwise provide, a majority of the required number of directors constitutes a quorum at a meeting of directors and, notwithstanding a vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

(3) Unless the by-laws otherwise provide, a notice of a meeting of directors need not specify a matter that is to be dealt with at the meeting except where that matter

(

a) is a question or matter requiring the approval of the members;

(

b) is respecting the filling of a vacancy among the directors;

(

c) is respecting the issuing or redemption of shares of the credit union other than membership shares; or

(

d) requires the approval of financial statements referred to in subsection 91

(1).

(4) A director may waive a notice of a meeting of directors and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of business on the grounds that the meeting was not lawfully called, provided that the objection is made at the start of the meeting.

(5) Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.

(6) Subject to the by-laws, a director may participate in a meeting of directors or a committee appointed by the directors under subsection 78(1) and

section 79 by means of telephone or other communication facilities that permit all persons participating in the meeting to hear each other, and a director participating in the meeting by those means shall be considered for the purposes of this Act to be present at that meeting.

2009 cC-37.2 s77 ; 2020 c24 s36

Back to Top

Appointing committees

(1)The directors of a credit union may appoint committees and may delegate to those committees the powers of the directors.

(2) The members of a committee appointed by the directors shall be members of the credit union and the chairperson of the committee shall be a director of the credit union.

(3) A committee appointed by the directors shall keep minutes of its proceedings and shall submit to the directors at each meeting of directors the minutes of the committee's proceedings during the period since the last meeting of the directors.

(4) Notwithstanding subsection (1), a committee appointed by the directors shall not

(

a) submit to the members a question or matter requiring approval of the members;

(

b) fill a vacancy among the directors;

(

c) issue or redeem shares, except in the manner and on the terms authorized by the directors;

(

d) approve a financial statement referred to in subsection 91

(1); or

(

e) approve or amend policies that are set by the board.

2009 cC-37.2 s78

Back to Top

Establishing committees

The directors of a credit union shall establish those committees which the minister may prescribe by regulation and those committees shall perform the duties and have the powers provided for in the regulations.

2009 cC-37.2 s79

Back to Top

Validity of acts

An act of a director or an officer is valid notwithstanding an irregularity in the election or appointment of, or a defect in the qualifications of, the director or officer.

2009 cC-37.2 s80

Back to Top

Resolution

(1)A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors or of a committee appointed by the directors

(

a) satisfies all requirements of this Act relating to meetings of directors or committees appointed by the directors;

(

b) is valid as if it had been passed at a meeting of directors or a committee appointed by the directors; and

(

c) is effective from the date specified in the resolution, which shall not be before the date on which the first director signed the resolution.

(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or of a committee appointed by the directors.

2009 cC-37.2 s81

Back to Top

Liability

(1)Directors of a credit union who vote for or consent to a resolution authorizing a payment that is contrary to

section 29 or the payment of an indemnity that is contrary to

section 88

are jointly and individually

liable to restore to the credit union an amount so paid and not otherwise recovered by the credit union.

(2) Where a loan is made by a credit union to a member in violation of this Act, the person receiving the loan and all directors, officers and members of committees of the credit union who, with knowledge of the violation, made or approved the loan are jointly and individually liable to the credit union for the unpaid balance of the loan, with interest.

(3) A director, an officer or a member of a committee who satisfies a judgment made as a result of an application to the court and under this

section is entitled to contribution from all other persons who by virtue of this Act are also liable.

(4) A director, an officer or a member of a committee who is liable under subsection (1) or (2) may apply to the court for an order compelling a member or other recipient to pay money or deliver property to the director, officer or member of a committee that was improperly paid or distributed to the member or other recipient.

(5) An action to enforce a liability imposed by subsection (1) or (2) shall be commenced within 2 years from the date of having received written notification of the complaint.

2009 cC-37.2 s82

Back to Top

Duty to report

Where a director becomes aware that the credit union is unable to make a payment that it is required to make, the director shall immediately give written notice of the matter to the guarantee corporation.

2009 cC-37.2 s83 ; 2020 c24 s37

Back to Top

Disclosure of interest in material contract

83.1

A director or an officer of a credit union shall disclose to the credit union the nature and extent of the directors or officers interest in a material contract or proposed material contract in accordance with the regulations.

2020 c24 s38 ; 2022 c24 s5

Back to Top

Designation of officers

(1)The directors may elect or appoint officers of the credit union, specify their duties and delegate to them powers to manage the business and affairs of the credit union, except powers to

(

a) submit to the members a question or matter requiring the approval of the members;

(

b) fill a vacancy among the directors;

(

c) issue or redeem shares, except in the manner and on the terms authorized by the directors;

(

d) approve financial statements referred to in subsection 91

(1); or

(

e) approve or amend policies that are set by the board.

(2) A director may become an officer of the credit union and a member of a committee but an officer cannot be a member of the audit committee.

(3) Two or more offices of the credit union may be held by the same person.

(4) Subsections (1) to (3) are subject to the articles and by-laws of the credit union.

2009 cC-37.2 s84

Back to Top

Remuneration and expenses

The directors of a credit union may be paid remuneration and reimbursed for those reasonable expenses incurred in the performance of their duties, as set out in the by-laws of the credit union.

2009 cC-37.2 s85

Back to Top

Duty of care

(1)A director and officer of a credit union, in exercising the powers and discharging the duties of a director or an officer, shall

(

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

(

b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(2) A director and an officer of a credit union shall comply with this Act, the regulations and the articles and by-laws of the credit union.

(2.1) A provision in a contract, the articles, the by-laws or a resolution shall not relieve a director or an officer from

(

a) the duty to act in accordance with this Act or the regulations; or

(

b) from liability for a contravention of this Act or the regulations.

(3) This

section is in addition to and not a derogation from another enactment or rule of law relating to the duty or liability of directors or officers of a credit union.

2009 cC-37.2 s86 ; 2020 c24 s39

Back to Top

Dissent

(1)A director who is present at a meeting of directors shall be considered to have consented to a resolution passed or action taken at the meeting, unless the director

(

a) requests that the directors dissent be recorded in the minutes of the meeting;

(

b) sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

(

c) sends a dissent by certified mail to the registered office of the credit union within one business day after the meeting is adjourned.

(2) A director who votes for or consents to a resolution is not entitled to dissent under subsection (1).

(3) A director who was not present at a meeting at which a resolution was passed or an action was taken shall be considered to have consented to a resolution passed or action taken, unless within 7 days after becoming aware of the resolution the director

(

a) causes the directors dissent to be placed with the minutes of the meeting; or

(

b) sends a dissent by certified mail to the registered office of the credit union.

(4) A director who relies in good faith on

(

a) financial statements of the credit union represented by an officer or the auditor of the credit union to reflect fairly the financial position of the credit union; or

(

b) the report of a lawyer, accountant, engineer, appraiser or another person whose profession lends credibility to a statement made by the person

is not liable under

section 82

2009 cC-37.2 s87 ; 2022 c24 s6

Back to Top

Indemnification

(1)Except in relation to an action

(

a) by or on behalf of the credit union or corporation to procure a judgment in its favour; or

(

b) by or on behalf of the superintendent or the guarantee corporation, in which cases the approval of the court shall first be obtained,

a credit union may indemnify a director or an officer of the credit union or a person who acts or acted at the credit union's request as a director or an officer of a corporation of which the credit union is or was a member, shareholder or creditor, and

the director's, officer's, acting director's or acting officer's

heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by

the director, officer, acting director or acting officer

in relation to a civil, criminal or administrative action or proceeding to which

the director, officer, acting director or acting officer

is made a party by reason of being or having been a director or an officer of the credit union or corporation, if the director or officer

(

c) acted honestly and in good faith with a view to the best interest of the credit union; and

(

d) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing the conduct was lawful.

(2) A person referred to in subsection (1) is entitled to indemnity from the credit union in relation to all costs, charges and expenses reasonably incurred in connection with the defence of civil, criminal or administrative action or proceeding to which that person is made a party by reason of being or having been a director or an officer of a credit union or corporation if the person seeking indemnity

(

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

(

b) fulfils the conditions set out in paragraphs (1)(

c) and (d).

(3) A credit union may purchase and maintain insurance for the benefit of a person referred to in subsection (1) against liability incurred by that person

(

a) as a director or an officer of the credit union, except where the liability relates to the failure of that person to act honestly and in good faith with a view to the best interests of the credit union; and

(

b) as a director or an officer of another corporation where the person acts or acted in that capacity at the credit union's request except where the liability relates to the failure to act honestly and in good faith with a view to the best interests of the corporation.

(4) A credit union or a person referred to in subsection (1) may apply to the court for an order approving an indemnity under this

section and the court may so order and make a further order it thinks appropriate.

(5) An applicant under subsection (4) shall give the guarantee corporation notice of the application at least 15 days before the date set for the hearing of the application and the guarantee corporation is entitled to appear, to be represented and be heard in person or by counsel.

(6) On an application under subsection (4), the court may order notice to be given to a person and that person is entitled to appear to be represented and be heard in person or by counsel.

2009 cC-37.2 s88 ; 2020 c24 s40 ; 2022 c24 s7

PART VII

RETURNS AND

FINANCIAL DISCLOSURE

Back to Top

Fiscal year

The fiscal year of a credit union ends on December 31 of each year.

2009 cC-37.2 s89

Back to Top

Annual returns

(1)A credit union shall, within the time period prescribed in the regulations, complete and file a return with the guarantee corporation showing, as of the end of the preceding fiscal year,

(

a) the name of the credit union;

(

b) the address of the registered office of the credit union;

(

c) the date when the latest annual meeting of the members of the credit union was held;

(

d) the names and residence addresses of the directors of the credit union;

(

e) the names and residence addresses of officers of the credit union and the most senior employee of the credit union; and

(

f) other information in relation to the credit union that may be required by this Act or the guarantee corporation.

(2) The return shall be on a form provided by the guarantee corporation and shall be signed and the contents of it shall be certified to be true by a director or an officer of the credit union.

(3) In addition to the return required under subsection (1), the guarantee corporation may require a credit union to file, within a time that it specifies, an additional return containing other information that the guarantee corporation may require.

(4) The minister may set a filing fee payable by a credit union to the guarantee corporation upon the filing of a return under this section, and the minister may set additional fees for late filing.

(5) A credit union shall provide to the guarantee corporation, periodic financial reports on or before the dates that are prescribed by regulations.

2009 cC-37.2 s90 ; 2020 c24 s41

Back to Top

Annual financial statements

(1)The directors of a credit union shall place before the members at every annual meeting

(

a) financial statements in relation to the preceding fiscal year;

(

b) the report of the auditor; and

(

c) other information in relation to the financial position of the credit union and the results of its operations that may be required by this Act or the regulations, the articles or by-laws of the credit union.

(2) The financial statements required under subsection (1) shall, except as otherwise required by this Act or the guarantee corporation, be prepared in accordance with International Financial Reporting Standards.

(3) At each annual meeting of members of a credit union the directors shall disclose

(

a) the aggregate amount of remuneration paid to all directors;

(

b) the aggregate amount paid to all directors as reimbursement for expenses incurred on credit union business;

(

c) the details of loans made to directors or officers and to persons with whom directors or officers have a material interest, which do not conform to the credit union's ordinary lending practices for members who are not directors or officers; and

(

d) other information that may be required to be disclosed by the regulations.

(4) A credit union shall, before each annual meeting of members, send a copy of the documents referred to in subsection (1) to the guarantee corporation.

(5) A credit union shall, upon request, provide to the guarantee corporation information which the guarantee corporation may reasonably require to enable it to discharge its responsibilities under this Act.

2009 cC-37.2 s91 ; 2020 c24 s42

Back to Top

Conditions re: financial statements

A credit union shall not issue, publish or circulate copies of financial statements referred to in subsection 91

(1) unless the financial statements are

(

a) approved by the directors and the approval is evidenced by the signatures of 2 or more of the directors on the statements; and

(

b) accompanied by the report of the auditor of the credit union.

2009 cC-37.2 s92

Back to Top

Request for documents

A credit union shall, on request of a member, provide to the member a copy of the approved financial statements and other documents referred to in subsection 91

(1).

2009 cC-37.2 s93

Back to Top

Auditors

(1)At the annual meeting of a credit union the members of that credit union shall appoint an auditor who is licensed as a public accountant under the Chartered Professional Accountants and Public Accountants Act

(2) A person is not disqualified from being an auditor of a credit union by reason only of the person's membership in the credit union.

2009 cC-37.2 s94 ; 2014 cC-10.1 s59

Back to Top

Auditor removal

(1)The members of a credit union may at an annual meeting or a special meeting remove from office an auditor appointed by them.

(2) A vacancy created by the removal of an auditor may be filled at the meeting at which the auditor is removed.

(3) Where a meeting is called for the purpose of removing an auditor from office, notice of the meeting shall be given to the guarantee corporation at least 30 days before the meeting and the guarantee corporation is entitled to be represented and heard at the meeting.

2009 cC-37.2 s95 ; 2020 c24 s43

Back to Top

Vacancy

(1)The directors shall immediately fill a vacancy in the office of auditor.

(2) An auditor appointed by the directors to fill a vacancy under subsection (1) holds office until the next annual meeting.

2009 cC-37.2 s96

Back to Top

Auditor appointed by guarantee corporation

(1)If a credit union does not have an auditor, the guarantee corporation may appoint and fix the remuneration of an auditor and the auditor so appointed holds office until an auditor is appointed in accordance with

section 96

(2) The guarantee corporation may appoint an auditor to do a new audit on a credit union if the guarantee corporation determines that it is necessary and the guarantee corporation may use that report as the audited financial statement of that credit union.

(3) The remuneration of an auditor appointed under subsections (1) and (2) shall be paid by the credit union.

2009 cC-37.2 s97

Back to Top

Duty to attend meetings

(1)The auditor of a credit union shall attend those meetings as requested by the board or the audit committee referred to in

section 103, of the credit union.

(2) The auditor shall be given not less than 10 days notice of a meeting the auditor is required to attend under this section.

(3) The costs of an auditor attending meetings under this

section shall be paid by the credit union.

(4) [Rep. by 2020 c24 s44]

2009 cC-37.2 s98 ; 2020 c24 s44

Back to Top

Examinations by auditor

(1)The auditor of a credit union shall make those examinations that the auditor considers necessary to enable the auditor to report on the financial statements referred to in subsection 91

(1) and on other financial statements required by this Act, or the articles or by-laws of the credit union to be placed before the members of a credit union.

(2) The auditor's examination referred to in subsection (1) shall, except as otherwise required by this Act or the guarantee corporation, be conducted in accordance with Canadian Auditing Standards.

2009 cC-37.2 s99 ; 2020 c24 s45 ; 2022 c24 s8 ; 2024 c16 s2

Back to Top

Guarantee corporation

may enlarge scope

(1)The guarantee corporation may enlarge or extend the scope of the audit or direct that another or a particular examination be made or procedure be established in a particular case where it is believed that the public interest or the interest of the members requires.

(2) The credit union shall pay the costs and expenses incurred in connection with a report or audit required under subsection (1).

2009 cC-37.2 s100 ; 2020 c24 s46

Back to Top

Right to demand information

(1)On the demand of the auditor of a credit union, the present or former directors, officers, committee members, employees or agents of the credit union shall furnish

(

a) information and explanations; and

(

b) access to records, documents, books, accounts and vouchers of the credit union,

that are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under

section 99

and that the directors, officers, committee members, employees or agents are reasonably able to furnish.

(2) On the demand of the auditor of a credit union, the directors of a credit union shall obtain from the present or former directors, officers, employees and agents of a subsidiary of the credit union and furnish to the auditor information or explanations that the present or former directors, officers, employees and agents of the subsidiary are reasonably able to furnish and that, in the opinion of the auditor, are necessary to enable the auditor to make the examination and report required under subsection 99

(1).

(3) A person who, in good faith, makes an oral or written communication under this

section is not liable in a civil action arising from that communication.

2009 cC-37.2 s101

Back to Top

Auditor's report

(1) The

auditor of a credit union shall make a written report regarding the financial statements referred to in subsection

(1) to the members of the credit union not fewer than 10 days before the date of the annual meeting of the member.

(1.1) A report referred to in subsection (1) shall indicate whether

(

a) the financial statements have been prepared in accordance with International Financial Reporting Standards; and

(

b) the examination of the financial statements has been made in accordance with the with Canadian Auditing Standards.

(2) In a report required under subsection(1), the auditor shall state whether, in the auditor's opinion, the financial statements referred to in the report present fairly the financial position of the credit union at the end of the fiscal year or other period to which it relates and the results of the operation of the credit union and changes in its financial position for that fiscal year or other period and whether

(

a) the auditor has obtained the information and explanations required;

(

b) the examination has been made in accordance with Canadian generally accepted auditing standards; and

(

d) reliance has been placed on the reports of other auditors.

2009 cC-37.2 s102 ; 2020 c24 s47 ; 2024 c16 s3

Back to Top

Audit committee

(1)A credit union shall have an audit committee composed of not less than 3 members of the credit union, none of whom are officers of the credit union.

(2) An audit committee shall meet at least annually with the auditor to review the financial performance of the credit union and perform those other functions that may be prescribed by the regulations.

(3) The auditor of a credit union or a member of the audit committee may call a meeting of the committee.

(4) Where a director or an officer becomes aware of an error or misstatement in a financial statement that the auditor or former auditor reported on, the director or officer shall immediately notify the audit committee and the auditor.

(5) Where an auditor or former auditor of a credit union is notified or becomes aware of an error or misstatement in a financial statement that the auditor reported on, the auditor or former auditor shall immediately inform each director where, in the auditor's opinion, the error or misstatement is material.

(6) Where, under subsection (5), the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall

(

a) prepare and issue a revised financial statement;

(a.1)

prepare a letter outlining the error or misstatement and attach it to the revised financial statement referred to in paragraph (a); and

(

b) otherwise inform the members and the guarantee corporation.

(7) [Rep. by 2020 c24 s48]

2009 cC-37.2 s103 ; 2020 c24 s48

Back to Top

Duty of auditor

(1)It is the duty of the auditor of a credit union to report in writing to the directors of a credit union transactions or conditions that affect, or could affect, the well-being of the credit union and that, in the opinion of the auditor, are not satisfactory and require rectification and the auditor shall, as occasion requires, make a report to the directors where

(

a) a change occurs in the circumstances of the credit union that might materially and adversely affect the financial position of the credit union or its ability to carry on or transact business as a going concern;

(

b) there has been a violation of this Act;

(

c) there has been a violation of the Criminal Code

(

d) the credit union has entered into a transaction that, in the opinion of the auditor, is not within the powers of the credit union; or

(

e) the credit union has adopted or implemented a business or financial practice and procedure that, in the opinion of the auditor, may contribute to material losses by the credit union.

(2) An auditor who makes a report under subsection (1) shall send that report in writing to the manager, audit committee and directors of the credit union and the report shall be presented to the next meeting of directors after the receipt of the report, and it shall be incorporated into the minutes of that meeting and the auditor shall, at the time of sending the report, provide a copy of the report to the guarantee corporation.

(3) An auditor is not required to make a report under this

section unless the auditor becomes aware of the circumstances described in subsection (1) in the ordinary course of the auditor's duties.

(4) Where as a result of an audit an auditor prepares a management letter or other documents highlighting weaknesses and deficiencies in the financial affairs of the credit union and other matters which may affect the well being of the credit union, the auditor shall provide a copy to the guarantee corporation within 14 days of completion of the audited financial statements.

2009 cC-37.2 s104 ; 2020 c24 s49 ; 2022 c24 s9 ; 2024 c16 s4

Back to Top

Additional requirements

(1)The guarantee corporation may require that the auditor of a credit union report to the guarantee corporation on the extent of the auditor's procedures in the examination of the financial statements of the credit union and may require that the auditor enlarge or extend the scope of that examination or direct that another particular procedure be performed.

(2) The guarantee corporation may require that the auditor of a credit union make a particular examination relating to the adequacy of the procedures adopted by the credit union for the safety of its creditors and members, or another examination that, in the opinion of the guarantee corporation, the public interest may require.

(3) A requirement of the guarantee corporation under subsections (1) and (2) shall be provided in writing to the auditor.

(4) The auditor of a credit union shall comply with requirements of the guarantee corporation under subsection (1) or (2) and shall make a written report to the guarantee corporation in relation to the requirements immediately after complying with them.

(5) Costs or expenses incurred in relation to the requirements of the guarantee corporation under subsection (1) or (2) shall be borne by the credit union.

2009 cC-37.2 s105

Back to Top

Access to papers

On the request of the guarantee corporation, the auditor shall make available to the guarantee corporation the working papers of the auditor used in conducting an audit or preparing a report under this Act.

2009 cC-37.2 s106

Back to Top

Qualified privilege

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

2009 cC-37.2 s107

Back to Top

No liability

(1)An auditor or former auditor of a credit union who in good faith makes an oral or written statement or report under this Act shall not be liable in a civil action arising from the statement or report.

(2) Subsection (1) does not relieve an auditor or former auditor from liability in connection with a report referred to in paragraph 91

(1)(

b) or subsection 99

(1).

2009 cC-37.2 s108

PART VIII

FUNDAMENTAL CHANGES

Back to Top

Amendment of articles

(1)Subject to the approval of the guarantee corporation under

section 110, the articles of a credit union may be amended by special resolution of the members.

(2) Notwithstanding subsection (1), the articles of a credit union containing a clerical error may be amended by resolution of the directors or by ordinary resolution of the members to correct the error.

2009 cC-37.2 s109 ; 2020 c24 s50

Back to Top

Approval of articles

(1) Where a credit union amends its articles under

section 109, the articles of amendment shall, within 3 months of the date of the resolution of the members authorizing the amendment, be sent to the guarantee corporation for approval.

(2) he guarantee corporation shall refuse to accept articles of amendment that are not submitted to the guarantee corporation within the 3 month period referred to in subsection (1).

(3) Where the guarantee corporation is satisfied that the articles of amendment are advisable, the guarantee corporation may approve the articles of amendment and forward them to the superintendent for filing.

2009 cC-37.2 s110 ; 2020 c24 s51

Back to Top

Certificate of amendment

On receipt of the articles of amendment, the superintendent shall file the articles of amendment and issue a certificate of amendment in accordance with

section 182.

2009 cC-37.2 s111 ; 2020 c24 s51

Back to Top

Effect of certificate

(1)An amendment becomes effective on the date shown in the certificate of amendment and the articles are amended accordingly.

(2) An amendment to the articles of a credit union shall not affect an existing cause of action, claim or liability to prosecution in favour of or against the credit union or its directors, committee members, officers or employees, or a civil, criminal or administrative action or proceeding to which the credit union or its directors, committee members, officers or employees is a party.

2009 cC-37.2 s112

Back to Top

Restated articles

(1)A credit union may, and shall when directed by the guarantee corporation, restate the articles of incorporation as amended.

(2) Restated articles of incorporation in the required form shall be sent to the guarantee corporation for approval.

(3) Where the guarantee corporation approves the restated articles of incorporation, the guarantee corporation shall forward the restated articles of incorporation to the superintendent for filing.

(4) On receipt of the restated articles of incorporation, the superintendent shall file the restated articles of incorporation and issue a restated certificate of incorporation in accordance with

section 182.

(5) Restated articles of incorporation are effective on the date shown in the restated certificate of incorporation and supersede the original articles of incorporation and all amendments to them.

2009 cC-37.2 s113 ; 2020 c24 s52

Back to Top

Amalgamation

(1)Two or more credit unions may amalgamate and continue as one credit union.

(2) A credit union that is under supervision under

Part XII shall not amalgamate without the written consent of the guarantee corporation.

2009 cC-37.2 s114

Back to Top

Amalgamation agreement

Credit unions proposing to amalgamate shall enter into an agreement with each other setting out the terms and means of effecting the amalgamation and, in particular, setting out

(

a) the provisions required to be included in articles of incorporation under

section 6

(

b) the address of the registered office of the amalgamated credit union;

(

c) the name and residence address of each proposed director of the amalgamated credit union;

(d)

[Rep. by 2020 c24 s53]

(

e) the manner in which the shares of each amalgamating credit union are to be converted into shares of the amalgamated credit union;

(

f) if shares of an amalgamating credit union are not to be converted into shares of the amalgamated credit union, the amount of money that the holders of those shares are to receive in addition to or instead of shares of the amalgamated credit union;

(

g) the proposed by-laws of the amalgamated credit union; and

(

h) details of arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated credit union.

2009 cC-37.2 s115 ; 2020 c24 s53

Back to Top

Approval of agreement

(1)The directors of each amalgamating credit union shall submit the amalgamation agreement for approval at a meeting of the members of the amalgamating credit unions.

(2) A notice of a meeting of members shall be sent in accordance with

section 57

to each member of each amalgamating credit union and shall include or be accompanied by a copy or

summary of the amalgamation agreement and shall state that a member is entitled to dissent in accordance with

section 122

(3) An amalgamation agreement is adopted when the members of each amalgamating credit union have approved the amalgamation by a special resolution.

(4) An amalgamation agreement may provide that before the issue of a certificate of amalgamation the agreement may be terminated by the board of directors of any of the amalgamating credit unions.

2009 cC-37.2 s116

Back to Top

Articles of amalgamation

(1)Subject to subsection 116(4), after an amalgamation has been adopted under subsection 116(3), articles of amalgamation shall be sent to the guarantee corporation for approval.

(2) The articles of amalgamation shall have attached to them an affidavit made under oath or affirmation of a director or an officer of each amalgamating credit union that establishes to the satisfaction of the guarantee corporation that

(

a) there are reasonable grounds for believing that

( i

each amalgamating credit union is and the amalgamated credit union will be able to pay its liabilities as they become due, and

(ii)

the realizable value of the assets of the amalgamated credit union upon completion of the amalgamation will not be less than the aggregate of its liabilities and its equity other than retained earnings; and

(

b) there are reasonable grounds for believing that

( i

a creditor or member of the amalgamating credit unions will not be prejudiced by the amalgamation, or

(ii)

adequate notice has been given to all known creditors of the amalgamating credit unions with a claim against the credit union in an amount that exceeds $1,000.

(3) A credit union may be exempt from the requirements of paragraph (2)(

a) if the guarantee corporation consents to an exemption.

(4) For the purpose of subparagraph (2)(b)(ii), adequate notice is given if

(

a) a notice is given in the Gazette

and once in a newspaper published or distributed in a place where each amalgamating credit union has its registered office; and

(

b) each notice states that the credit union proposes to amalgamate with one or more specified other credit unions in accordance with this Act.

(5) Where the guarantee corporation is satisfied that the amalgamation is advisable, the guarantee corporation may approve the articles of amalgamation and forward them to the superintendent for filing.

2009 cC-37.2 s117 ; 2020 c24 s54

Back to Top

Compulsory amalgamation

Where a credit union that is under supervision under

Part XII is ordered by its supervisor to amalgamate in accordance with

section 176

(1)( i

), the provisions of

section 116

and subsection 117

(2) do not apply to the credit union which is ordered to amalgamate.

2009 cC-37.2 s118

Back to Top

Certificate and effect of amalgamation

(1)On receipt of articles of amalgamation, the superintendent shall file the articles of amalgamation and issue a certificate of amalgamation in accordance with

section 182.

(2) On the date shown in the certificate of amalgamation

(

a) the amalgamation of the amalgamating credit unions and their continuance as one credit union becomes effective;

(

b) the property of each amalgamating credit union continues to be the property of the amalgamated credit union;

(

c) the amalgamated credit union continues to be liable for the obligations of each amalgamating credit union;

(

d) an existing cause of action, claim or liability to prosecution remains unaffected;

(

e) a civil, criminal or administrative action or proceeding pending by or against either of the amalgamating credit unions may be continued by or against the amalgamated credit union;

(

f) a conviction against, or ruling, order or judgment in favour of or against an amalgamating credit union may be enforced by or against the amalgamated credit union;

(

g) the articles of amalgamation shall be considered to be the articles of incorporation of the amalgamated credit union and the certificate of amalgamation shall be considered to be the certificate of incorporation of the amalgamated credit union;

(

h) on the filing of a copy of the certificate of amalgamation, certified as a true copy by the superintendent, in a land titles registry or other recording office, all the lands, charges on land, estates, real, personal or mixed real and personal property, effects, rights, credits, judgments, assignments and rights enforceable by legal action of every description belonging to the amalgamating credit unions are transferred and vested in the amalgamated credit union without further act, conveyance or other deed; and

( i

the members of the amalgamating credit unions become members of the amalgamated credit union and the shares held in the amalgamating credit unions become shares in the amalgamated credit union subject to the terms of the amalgamation agreement.

2009 cC-37.2 s119 ; 2020 c24 s55

Back to Top

Extraordinary sale, lease or exchange

(1)A sale, lease or exchange of all or substantially all of the property of a credit union requires the approval of the members in accordance with this section.

(2) A notice of a meeting of members called under subsection (1) shall be sent in accordance with

section 57 to each member and shall

(

a) include or be accompanied by a copy or

summary of the agreement of sale, lease or exchange; and

(

b) state that a member is entitled to dissent in accordance with

section 122

(3) At the meeting held in accordance with a notice referred to in subsection (2), the members may by special resolution approve the sale, lease or exchange and may fix or authorize the directors to fix a term or condition of it.

(4) A sale, lease or exchange referred to in subsection (1) is adopted when the members have approved the sale, lease or exchange.

(5) The directors of a credit union may, if authorized by the members approving a proposed sale, lease or exchange, and subject to the rights of third parties, abandon the sale, lease or exchange without further approval of the members.

2009 cC-37.2 s120

Back to Top

Approval of guarantee corporation

(1)The credit union shall, before the completion of a sale, lease or exchange referred to in

section 120

, obtain the approval of the guarantee corporation.

(2) An approval shall not be granted under subsection (1) unless the guarantee corporation has received an affidavit made under oath or affirmation of a director or an officer from the credit union proposing to sell, lease or exchange its property establishing, to the satisfaction of the guarantee corporation, that there are reasonable grounds for believing that

(

a) the sale, lease or exchange of the property will not increase the likelihood of a claim upon the guarantee corporation;

and

(

b) creditors, including shareholders of the credit union who are not members, will not be prejudiced by the sale, lease or exchange of the property.

(3) For the purpose of subsection (2), adequate notice is given if

(

a) a notice is published once in the Gazette

and once in a newspaper published or distributed in the place where the credit union has its registered office; and

(

b) each notice states that the credit union proposed to sell, lease or exchange all, or substantially all of its property under

section 120.

2009 cC-37.2 s121 ; 2020 c24 s56

Back to Top

Dissent

(1)A member of a credit union may dissent if the credit union resolves to

(

a) change its name;

(

b) amalgamate with another credit union under

section 116

(

c) sell, lease or exchange all or substantially all of its property under

section 120

; and

(

d) add, change or remove a provision that is set out in the articles.

(2) A dissenting member shall send to the credit union, at or before a meeting of members at which a resolution referred to in subsection (1) is to be voted on, a written objection to the resolution but, where the dissenting member fails to send the written objection as required, the dissenting member does not lose the right to dissent if the credit union failed to give the dissenting member notice of the purpose of the meeting or of the right to dissent.

(3) The credit union shall, within 10 days after the members adopt the resolution,

(

a) send to each member who has filed an objection under section (2), a notice that the resolution has been adopted, but notice is not required to be sent to a member who withdraws an objection; and

(

b) send to the guarantee corporation a copy of the resolution and copies of written objections received by the credit union under subsection (2).

(4) A resolution in respect of which written objection has been sent to the credit union under subsection (2) shall not be effective until approved by the guarantee corporation.

(5) The guarantee corporation may require as a condition of approval under subsection (4) that a part or all of the indebtedness or other liability of the credit union to the dissenting member be paid or satisfied on those terms that the guarantee corporation may stipulate.

2009 cC-37.2 s122

Back to Top

Reorganization

under a court order

(1)In this section, "reorganization" means the reorganization of a credit union in accordance with a court order made under

(

a) section 159

(

b) the Bankruptcy and Insolvency Act

( Canada

), approving a proposal; or

(

c) any other Act of the Legislature that affects the rights of the credit union, its members or creditors.

(2) Where a credit union is subject to a reorganization, its articles may be amended by the order to effect a change that might lawfully have been made by an amendment under

section 109

(3) Where a reorganization is made, the court may also

(

a) authorize the issue of debt obligations of the credit union and fix the terms of them; and

(

b) appoint directors in place of or in addition to all of the directors then in office.

(4) After a reorganization has been made, articles of reorganization shall be sent to the superintendent.

(5) On receipt of articles of reorganization, the superintendent shall file the articles and issue a certificate of amendment in accordance with

section 182

(6) A reorganization becomes effective on the date shown in the certificate of amendment and the articles of incorporation are amended accordingly.

2009 cC-37.2 s123

PART IX

DISSOLUTION AND

LIQUIDATION

Back to Top

Mandatory dissolution

A credit union that does not have property and liabilities shall be dissolved by special resolution of the members.

2009 cC-37.2 s124

Back to Top

Voluntary dissolution by members

(1)A credit union that has property or liabilities or both may be dissolved by special resolution of the members where

(

a) by the special resolution the members authorize the directors to cause the credit union to distribute any property and discharge liabilities; and

(

b) the credit union has, under

section 120

, sold its property, distributed residual property and discharged all of its liabilities.

(2) A credit union which is being dissolved under this

section shall prepare articles of dissolution in accordance with

section 127

and that

section applies in relation to the dissolution.

2009 cC-37.2 s125

Back to Top

Voluntary liquidation and dissolution

(1) The directors, or a member in accordance with

section 59

, may propose the voluntary liquidation and dissolution of a credit union.

(2) Notice of a meeting of members at which voluntary liquidation and dissolution is to be proposed shall set out the terms of the liquidation and dissolution.

(3) A credit union may be liquidated and dissolved by special resolution of the members.

(4) A statement of intent to dissolve in the required form shall be sent to the guarantee corporation for approval.

(4.1) Where the guarantee corporation is satisfied that the credit union is able to discharge all of its obligations and liabilities before dissolution, the guarantee corporation shall approve the statement of intent to dissolve and forward it to the superintendent for filing.

(5) On receipt of a statement of intent to dissolve, the superintendent shall file the statement of intent to dissolve and issue a certificate of intent to dissolve in accordance with

section 182.

(6) Where a certificate of intent to dissolve is issued, the credit union shall cease to carry on business except to the extent necessary for the liquidation, but its legal existence continues until the superintendent issues a certificate of dissolution.

(7) After a certificate of intent to dissolve is issued, the credit union shall

(

a) immediately give notice of the dissolution to be sent to each known creditor of the credit union;

(

b) immediately give notice in the Gazette

and once in a newspaper published or distributed in the place where the credit union has its registered office and take reasonable steps to give notice of the dissolution in every jurisdiction where the credit union carries on business;

(

c) proceed to collect its property, to dispose of properties that are not to be distributed in kind to its members, to discharge all its obligations and to do all other acts required to liquidate its business; and

(

d) after giving the notice required under paragraphs (

a) and (

b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, in accordance with the provisions of the special resolution authorizing the dissolution.

(8) A certificate of intent to dissolve may be revoked where

(

a) the revocation is approved in the same manner as the resolution under subsection (3); and

(

b) the credit union sends a statement of revocation of intent to dissolve in the required form to the guarantee corporation for approval before a certificate of dissolution has been issued.

(8.1) Where the guarantee corporation is satisfied with the statement of revocation of intent to dissolve, the guarantee corporation shall approve the statement of revocation of intent to dissolve and forward it to the superintendent for filing.

(9) On receipt of a statement of revocation of intent to dissolve, the superintendent shall issue a certificate of revocation of intent to dissolve in accordance with

section 182.

(10) On the date shown in the certificate of revocation of intent to dissolve, the revocation is effective and the credit union may continue to carry on its business.

(11) Where a certificate of intent to dissolve has not been revoked and the credit union has complied with subsection (7), the credit union shall prepare articles of dissolution.

2009 cC-37.2 s126 ; 2020 c24 s57

Back to Top

Articles of dissolution and certificate

(1)Articles of dissolution shall be sent to the guarantee corporation for approval.

(2) Where the guarantee corporation is satisfied with the articles of dissolution, the guarantee corporation shall approve the articles of dissolution and forward them to the superintendent for filing.

(3) On receipt of articles of dissolution, the superintendent shall file the articles of dissolution and issue a certificate of dissolution in accordance with

section 182

(4) The credit union ceases to exist on the date shown in the certificate of dissolution.

2009 cC-37.2 s127 ; 2020 c24 s58

Back to Top

Custody of records

The guarantee corporation shall retain the documents and records of a dissolved credit union for the period prescribed in the regulations.

2009 cC-37.2 s128 ; 2020 c24 s59

Back to Top

Effect of dissolution

(1)In this section, "member" includes the heirs and legal representatives of a member.

(2) Notwithstanding the dissolution of a credit union under this Act,

(

a) a civil, criminal or administrative action or proceeding commenced by or against the credit union before its dissolution may be continued as if the credit union had not been dissolved;

(

b) a civil, criminal or administrative action or proceeding may be brought against the credit union within 2 years after its dissolution as if the credit union had not been dissolved; and

(

c) a property that would have been available to satisfy a judgment or order if the credit union had not been dissolved remains available for that purpose.

(3) Service of a document on a credit union after its dissolution may be effected by serving the document on a person named as a director in the most recent notice sent to the superintendent under this Act.

(4) Notwithstanding the dissolution of a credit union, a member to whom property has been distributed is liable to a person claiming under subsection (2) to the extent of the amount received by that member on the distribution, and an action to enforce that liability may be brought within 2 years after the date of the dissolution of the credit union.

(5) A court may order an action referred to in subsection (4) be brought against the persons who were members, subject to those conditions that the court thinks appropriate and, if the plaintiff's claim is established, the court may refer the proceedings to an officer of the court who may

(

a) add as a party to the proceedings each person found by the plaintiff who was a member or shareholder;

(

b) determine, subject to subsection (4), the amount that each person who was a member or shareholder shall contribute towards satisfaction of the plaintiff's claim; and

(

c) direct payment of the amounts so determined.

2009 cC-37.2 s129

Back to Top

Unclaimed property

(1)Upon the dissolution of a credit union, the portion of the property distributable to a creditor, shareholder or member who cannot be found shall be converted into money and paid to the guarantee corporation.

(2) A payment under subsection (1) is considered to be in satisfaction of the debt to or claim of the creditor, shareholder or member.

(3) Where it is established that a person is entitled to money paid to the guarantee corporation under this Act, the guarantee corporation shall pay the amount of that money to that person.

(4) Where after the dissolution of a credit union it is established that a person is entitled to receive a document for registration in the registry of deeds or other registry executed by that credit union, the guarantee corporation shall execute the documents on behalf of the dissolved credit union.

(5) A document executed by the guarantee corporation under subsection (4) shall be accepted for registration in the registry of deeds or other registry, if the guarantee corporation has placed an explanation for its actions upon the document and has otherwise complied with the requirements of the registry of deeds or other registry.

(6) Subject to this

section and

section 129

, property of a credit union that has not been disposed of at the date of its dissolution vests in the guarantee corporation.

(7) The costs of liquidation shall be paid out of the property of the credit union.

2009 cC-37.2 s130

Back to Top

Effect of Bankruptcy and Insolvency Act ( Canada

(1)This Part does not apply to a credit union that is bankrupt within the meaning of the Bankruptcy and Insolvency Act

( Canada

(2) Proceedings taken under this Part to dissolve or to liquidate and dissolve a credit union shall be stayed if a credit union becomes subject to or takes a proceeding under the Bankruptcy and Insolvency Act

( Canada

2009 cC-37.2 s131

PART IX.1

FEDERAL CONTINUANCE

Statement of intent to apply for federal continuance

131.1

(1)A credit union that satisfies the requirements of this Part may apply to the Minister of Finance of Canada for federal continuance.

(2) The directors of a credit union that is proposing to apply for federal continuance shall provide to the guarantee corporation a statement of intent to apply for federal continuance on a form provided by the guarantee corporation at least 60 days before sending a notice of a meeting of the members of the credit union for the purposes of seeking their approval for federal continuance.

(3) A notice of meeting of members shall be sent in accordance with

section 57 and shall include the information and documentation prescribed in the regulations.

2020 c24 s60

Authorization of application

131.2

(1)An application for federal continuance is not authorized until it is approved by

(

a) the members of the credit union by special resolution; and

(

b) the guarantee corporation in writing.

(2) The guarantee corporation may approve an application for federal continuance only where

(

a) the guarantee corporation is satisfied that the federal continuance is advisable and will not adversely affect

( i

the members, shareholders or creditors of the credit union; or

(ii)

other credit unions in the province; and

(

b) the credit union has filed a declaration verifying compliance with the Bank Act

(Canada).

(3) Where the guarantee corporation is advised of a material change in the circumstances that supported the approval of the application for federal continuance, the guarantee corporation may revoke the approval at any time before the issuance of letters patent continuing the credit union as a federal credit union under the Bank Act

(Canada).

(4) Where authorized by the members of the credit union at the time they approved the application for federal continuance, the directors of the credit union may abandon the application without further approval of the members.

2020 c24 s60

Certificate of discontinuance

131.3

(1)On receipt of a notice that establishes to the satisfaction of the guarantee corporation that letters patent continuing a credit union as a federal credit union under the Bank Act

(Canada) have been issued, the guarantee corporation shall notify the superintendent and the superintendent shall file the notice and issue a certificate of dissolution in accordance with

section 127.

(2) A notice referred to in subsection (1) shall be considered to be articles of dissolution required to be filed with the superintendent for the purposes of

section 127.

(3) A credit union is considered to have been dissolved and this Act ceases to apply to it on the date set out in the certificate of dissolution which, notwithstanding subsection 127(4), shall be the same date as the effective date of the federal continuance of the credit union set out in the letters patent issued to the credit union.

2020 c24 s60

No reimbursement of levies paid

131.4

A credit union that is continued as a federal credit union is not entitled to reimbursement of any levy or any portion of a levy paid under this Act.

2020 c24 s60

PART X

CREDIT UNION DEPOSIT GUARANTEE CORPORATION

Back to Top

Application

This Part applies to the Credit Union Deposit Guarantee Corporation.

2009 cC-37.2 s132

Back to Top

Continuation

The Credit Union Deposit Guarantee Corporation existing under the Credit Union Act

in force immediately before the commencement of this Act is continued subject to the provisions of this Act, and the members of the board of the guarantee corporation continue in office until their successors are appointed.

2009 cC-37.2 s133

Back to Top

Duties

The duties of the guarantee corporation are

(

a) to provide, for the benefit of persons having deposits with credit unions in the province, deposit insurance against loss of part or all of those deposits by making payments to the depositors to the extent and in the manner authorized by this Act;

(

b) in those circumstances that the guarantee corporation considers appropriate, to provide assistance to credit unions for the purpose of stabilization or for the orderly liquidation of a credit union;

(

c) to protect deposits in credit unions against impairment arising from financial losses and insolvency by

(

i) promoting the development and implementation of sound business practices and sound financial policies and procedures by credit unions, and

(ii)

establishing and implementing loss prevention programs and other controls;

(c.1)

to ensure that credit union by-laws comply with this Act and the regulations;

(c.2)

to notify the superintendent of the matters prescribed in the regulations that may impact credit unions, credit union members or the guarantee corporation;

(

d) to act as supervisor of a credit union; and

(

e) to do those other things that may be required or authorized by this Act or the regulations.

2009 cC-37.2 s134 ; 2020 c24 s61

Back to Top

Capacity

The guarantee corporation has the capacity, rights, powers and privileges of a natural person.

2009 cC-37.2 s135

Back to Top

Powers

(1)The guarantee corporation may

(

a) determine the amounts of money to be levied and collected from credit unions for the purpose of

section 147

, 148

and 154

(

b) borrow money on the credit of the guarantee