Bill 85 — Second Session, 17Th L~~Ure" 22Ehzaheth~U the Legislative Assembly of Alberta Bill 85 the Credit Union Iamendmen,T Act, 1973 (Legislature 17, Session 2)

L17 S2 5219

Alberta — Bills

1973 Bill 85 Second Session, 17th L~~ure" 22EHzaheth~U THE LEGISLATIVE ASSEMBLY OF ALBERTA BILL 85 The Credit Union IAmendmen,t Act, 1973 THE MINISTER OF AGRICULTURE First Reading .............................. . Second Reading Third Reading ............................. . Printed by QUEEN'S PRINTER for the Province of Alberta, EDMONTON

Bill 85 BILL 85 1973 THE CREDIT UNljON AMENDMENT ACT, 1973 (Assented to , 1973) HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Alberta, enacts as follows: 1. The Credit Union Act is hereby an~ended.

Section 2 is arnende.d (

a) by adding after clause (

a) the foUow1~ng: (al) "current deposit" means a deposit out of which money may be withdrawn upon presentation of a bill of exchange; (a2) "deposit" n1eans both a current deposit and savings deposit, or either of them; (

b) by adding after clause (

b) the following: (bl) "Federation" means the Credit Union Federa tion of Alberta Limited; (

c) by adding after clause (

c) the following: (d) "savings deposit" means any deposit other than a current deposit; (e) "share" n1eans a share in a credit union; (f) "Stabilization Fund" or "Fund" 111'2anS the credit union stabilization fund heretofore es tablished with the consent of the Director and administered by the Federation for the pur pose of providing financia:l aid to credit unlions.

Section 16 is struck out and the following is sub stituted there for: 1>6.

(1) A credit union is not bound to see to the execu tion of any trust, whether express, implied or constructive, to which any deposit or share is subj ect.

(2) When all or any portion of any deposit or share is subject to a trust of which the credit union h3.s notice, a bill of exchange, withdrawal slip or receipt either of the person

I. This Bill will amend

chapter 74 of the Revised Statutes of Alberta 1970. 2. Defines the terms "current deposit", "deposit", "Federation", "savings deposit", "share", and "Stabilization Fund".

Section 16 presently reads: 16.

(1) A credit union is not bound to see to the execution of any trust, whether express, implied or ,constructive, to which any deposit, deposit moneys, deposit aoeount, shares, share moneys or share account is ,subject.

(2) When aU or any portion of any deposit, deposit moneys, deposit aceount, shares, share moneys or share account is subject to a trust of which the credit union has notice, the cheque, withdrawal slip, or receipt 'either of the person (

a) in whose name the deposit, deposit moneys, deposit account. shares, share moneys or share account stands, or (

b) who i,s according to the document creating the trust entitled to deal therewi th is, notwithstanding any such trust, sufficient authorization to the credit union and the credit union is not bound to see to the application of any money paid upon or with respect to any such cheque, with· drawal slip or receipt.

(

a) in whose name the deposit or share stands, or (

b) who i,s ac'Cording to ,the document creating the trust entitled to deal therewith, is, notwithstanding any such trust, a valid discharge to the credit union for any payment made by it pursuant to the bill of exchange, withdrawal slip or receipt and the credit union is not b'Ound t'O see to the application of any money paid upon or with respect to any such bill of ex change, withdrawal slip or receipt.

(3) Where property has been hypothecated or pledged to a credit union, that credit union is not bound to see to the execution of any trust, whether express, implied or con structive, to which that property is subject. 4. Sectiofn 18 is amended by striking out the words "stand ing to his credit in share or deposit accounts" and by sub stituting there.for the words "from his deposits 'Or moneys standing to his credit as payment on his shares".

Section 19 is amended (a) . as to subsection (2), clause (j), by striking out the figure "$1500" and by substituting therefor the fig ure. "$2500", (

b) by striking out subsection (3) and by substituting the following therefor:

(3) Notwithstanding

section 35, subsection (1), a credit union may accept money on deposit or as payment on shares from, or make loans to, a co operativeassociati'On as defined in The Co-operative Associations Act. (

c) as to subsection (4), by striking out the words "de posit accounts" and by substituting therefor the word "deposits", (

d) as to subsection ( 5) , by striking out the word "account" wherever it occurs, (

e) as tol subsection (6) , by striking out the word "account" . 6. The following

section is added after

section 25: 25.1

(1) Where a credit union operates one or more branch offices, the board of directors may appoint a credit committee for any branch office and the credit committee so appointed shall be the credit committee for that branch office.

(2) A credit committee appointed under this

section shall consist of not les's than three members or such greater number as required by the supplemental by-laws, one of whom shall be designated as the chairman of the committee. 2

Section 18 presently reads: 18. Subject to sections 52 and 63 and the standard by-laws a member .of a credit union who appears in person at the office .of the credit union may withdraw moneys standing to his credit in share or deposit accounts. 5.

Section 19 (2) (j), (3) to (6) presently read:

(2) For the purp.ose of carrying out its .objects, every credit union may (

j) immediately upon the death .of a member and upon completion of such forms as may be required by the by-laws', pay a sum not exceeding $1500 out .of the moneys standing toO the credit of the dec-eased member, whe,ther as payment on shares or as depolsit, (

i) t.o the executor or administrator of the estate of the de ceas'ed member, .or (

U) if there is then no executor or adminis,trator, to the wid.oW of the deceased member, 'or (Hi) if there is no such executor, administrator or widow, to the Public Trustee for the benefit of the person .or persons who would be beneficiaries of the esta'te .of the deceased member under The I ntestate Succession Act if the member had died intestate and without a widow, - and a payment made under this clause releases the credit union from any further liability with respect to the moneys so paid, and

(3) Notwithstanding

section 35, subsection (1), a credit union may accept deposits' .on share or deposit account from or make loans to a co-operative association inoorporated under The Co-operative Associa tions Act.

(4) Subject to the standard by-laws a credit union may with the consent of the Diredor permit its members to withdraw moneys from deposit accounts only, by means of negotiable or n.on-negotiable orders upon itself.

(5) No officer or employee of a credit union shall permit any with drawal .of funds from the deposit account of a member unless the funds in the deposit account are equal to or in excess of the amount sought to be withdrawn, and an officer or employee who c.ontravenes this subsection is guilty of an offence under this Act.

(6) Nothing in this

section curtails, abridges .or defeats any remedy for the recovery from a member .of any amount withdrawn in excess of the amount ,standing t.o his credit in his deposit acoount. 6. Provides for the establishment of additional credit committees. 2

7. The following

section is added after

section 28,' 28.:1 Where a credit uninn 'Operates nne 'Or mnre branch 'Offices, a member shall 'Only make a lnan thrnugh a branch 'Office in which he has a deposit. 8. Sect.ion 32 is amended by striking out subsection (1) and by substituting therefor the. following,' 32.

(1) A credit cnmmittee shall nnt grant a lnan in an amnunt greater than the sum 'Obtained by adding together (

a) the amnunt prescribed by the standard by-laws for the purpnses 'Of this sectinn, and (

b) the value 'Of the unencumbered portinn 'Of the shares and savings depnsi ts 'Of the bnrrnwer, unless adequate security is taken fnr the lnan.

Section 33 is amended (

a) by adding the following subsection after subsec t.ioYn (1),'

(1.1) Where a credit uni'On 'Operates nne 'Or m'Ore branch 'Offices, the b'Oard 'Of direct'Ors, with the c'On sent 'Of the Directnr, may apP'Oint an empl'Oyee 'Of the credit uni'On as l'Oan 'Officer f'Or a branch 'Offiee with auth'Ority tn make immediate l'Oans t'O members with'Out first 'Obtaining the appr'Oval 'Of the credit c'Ommittee f'Or that branch 'Office. (

b) as to subse.cUon (2), clause (

b) by adding after the word "shares" the wO'rds "and savings dep'Osits".

Section 37 is struck out and the following is sub stituted therefor,' 37. A b'Orr'Ower may repay his l'Oan in wh'Ole 'Or ,in part at the 'Office 'Or branch 'Office 'Of the credit uni'On that made the loan 'On any day that 'Office 'Or branch 'Office is 'Open f'Or business.

Section 38 is amende.d (

a) as to clause (

a) by adding after the word "make" the worrds "'Or cause t'O be made", and (

b) as to clause (

f) by striking out the words "in such manner" and by substituting there.for the words "in the manner prescribed by the standard by-laws".

Section 41 is amended by striking out subsection (5). 13. The following

section is added aft@'

section 41,' 4:1.1

(1) The Stwbilizati'On Fund shall c'Ontinue t'O be maintained f'Or the purp'Ose 'Of pr'Oviding financial aid t'O credit uni'Ons. 3

7. Self explanatory. 8.

Section 32 (1) presently reads: 9. 32.

(1) The credit committee shall n.o·t grant a laan in an amount greater than the sum obtained by adding togethe·r (

a) the am aunt pres,cribed by the standard by-laws for the pur poses of this sec'ti.on, and (

b) the value of the unencumbered porti.on of the shares .of the borrDwer, unless security is taken for the laan. (

a) Authorizes the appointing of a loan officer for a branch. (b)

Section 33 (2) presently reads:

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

a) the amount prescribed by the standard by-laws for the pur p.oses of this section, and (

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

Section 37 presently reads: 37. A borrower may repay his Joan in whole or in part on any day an which the office of the credit union is open for business. I I.

Section 38 (

a) and (

f) presently read: 38. The supervisory committee shall . (

a) make an examination of the affairs of the ,credit union at least quarterly, audit its books, and if deemed necessary by the committee, call a meeting of the credit union for consideration of the report of the committee, (

f) verify the accauntsof the members in such manner and at such times as may be prescribed by the Director.

Section 41 (5,) presently reads:

(5) Every credit union shall make an annual investment in the credit union stabilization fund established pursuant to s,e,cti.on 79 in the amount prescribed by the standard by-laws. 13. Provides for the continuance and management of the Stabi lization Fund. 3

(2) The Fund shall ibe administered by a committee called the "Stabilization Committee".

(3) The Stabilization Committee shall consist of five per sons, four of whom shall be appointed by the Federation and one of whom shall be appointed by the Minister.

(4) Every credit union shall make an annual payment into the StabiHzation Fund in ,the amount pres'cribed by the !standard by-laws.

(5) The Lieutenant Governor in Council may make regu lations governing the operation and management of the Stabilization Fund.

Section 42 is amended (

a) as to! subsection (1), by striking out the words "the share and deposH accounts of members" and by substituting the.refor the words "deposits of mem bers or money paid by member,s for shares", (

b) as to subsection (2), clause (

a) by striking out the word "deposit" and by substituting therefor the words "depositing the funds". 15. Se.cUon 47 is struck out and the following is sub stituted therefor: 47. Subject to

section 48, the membership ofa credit union shall eonslist of persons, groups 'Of persons or corpora tions who qualify for membership in the credit union under the supplemental bY-laws.

Section 49 is renumbered as subsection (1) and the following subsection is added:

(2) A person who has not attained the age of 18 years may purchase shares in and make deposits with a credit union in his own name and the money held ,in a deposit or as payment on shares may be repaid to him, and he may give a valid discharge therefor, notwithstanding his minority. 17. Se.ction 50 is struck out and the following is sub stituted therefor: 50. A membership register shall he maintained by each credit union and the register shall show and is prima fade proof of (

a) the name, address, social insurance number and birth date of ea'ch member who is a natural person, (

b) the name of each member that is a corporation and rbhe address of its registered office, 4

Section 42 presently reads: 42.

(1) The board of directors shall, in the manner prescribed by the standard by-laws, establish and maintain reserve funds against possible withdrawals from the share and deposit accounts of members.

(2) All reserve funds shall be invested by the board 'Of directors (

a) by deposit in a chartel'ed bank or in any other institution ap proved by the Director, or (

b) in any investment authorized under

section 19, subsecti'On (2), clauses ('

e) and (f). IS.

Section 47 presently reads: 47. Subject to

section 48, the membership of a credit union shall be limited to groups of persons having a common bond of occupation or association, or to persons within a well defined neighbourhood, com munity, 'Or rural or urban district.

Section 49 presently reads: 49. A minor may be a member of 'a credit union and may vote at meetings, but no minor shall be elected as a directoQr 001' member of the ·credit committee or superviso'ry committee of the credit union and no minor und'er the age of 18 y,ears shall be permitted to vote upon any resolution pertaining to the expenditure or borrowing of any money.

Section 50 presently reads: 50. A register, or list of .shareholders, shall be kept by each credit union, and the register shall show and is prima facie proo,f of (

a) the names, address'es and occupations' of the shareholders, (

b) the number of shares held by them respectively, (

c) the number of shares and the amount paid or considered as paid thereon, (d) ,the date on which each shareholder was registered, and (

e) the date at which a shareholder ceased to be such. 4

(

c) the date upon which the membership began, and (

d) the date upon which the membership was ter minated. 18. SecUon 53 is struck out and the following is sub stituted there.for: 53.

(1) Where a menlber is expelled or withdraws from a credit union the credit union shall, after deducting all amounts due from that person to the credit union, pay to that person (

a) all amounts that the person paid in on shares or as deposits, and (

b) any dividends or interest due or accruing due to that person.

(2) Notwithstanding subsection (1), a credit union may withhold from amounts payable under subsection (1) such amounts as are necessary to secure any pr,imary, collateral, joint, accruing or contingent liability of the member to the credit union.

Section 58 is struck out and the. following is sub stituted therefor: 58.

(1) Where the Director is of the opinion that the affairs ofa credit union are being mismanaged or are being eonducted in an unsound manner he shall make an order (

a) requiring the credit union to re-organize its affairs to the satisfaction of the Director within 90 days or such longer period as the Director may from tinle to time prescribe, or (

b) authorizing the Stabilization Committee or such person as he considers proper to re-organize, man age and supervise the affairs of the credit union so as to 'ensure that the affairs of the credit union will be properly managed in a sound manner.

(2) Where the Director makes an order under subsection ( 1 ), cIa use (

a) or (b) (

a) he may prescribe the terms under which the credit union shall be re-organized, supervised or managed, and (

b) he shall s'erve the order upon the credit union.

(3) Where the Director makes an order under subsection (1), clause (

b) he may (

a) suspend the powers of the board of directors in whole or in part, and (

b) authorize the Stabilization Committee or the person appointed to carryon the affairs of the credit union to 'exercise the powers of the board of directors in whole or in part. 5

Section 53 presently reads: 53. All amounts paLd in on shares or as dep-osits by a membe-r who is expelied or withdraws from a credit uni'On and any diviaends or interest due or accruing due thereon shall be paid to him as funds bec'ome available and after deducting all amounts due from him to the credit union.

Section 58 presently reads: 58.

(1) If it appears to the Minister up'On the report 'Of the Director made after an inquiry -by him under this Act, that the affairs of the credit union are being mismanaged or are being conducted up'On an unsound basis, the Director, with the approval of the Minister, may (

a) appoint a liquidat'Or to wind up the affairs 'Of the credit union and upon -c.ompleti'On oo! the liquidation, cancel its incorporation, or (

b) notify the credit union that unless its affairs are reorganized t'O the satisfaction of the Director within 90 days, or such longer period as the Director may fr.om time to time prescribe, a liquidator will be appointed to wind up its affairs and upon completi'On of the liquidation the incorporati.on .of the credit union will be cancelled, or (

c) appoint an administrwtor to reorganize, manage and supervise the affairs of the credit union for such peri'Od of time as the Director in his discreti'On, may direct, and an administrator may exercise such p'Owers and shall perform such duties as the Director vests in or imp'Oses upon him.

(2) If the credit union fails to reorganize its affairs to the satisfac tion of the Director within 90 days or the prescribed period after receipt of the notice, the Direct'Or, with the approval 'Of the Minister, may appoint a liquidwtor and upon completion of the liquidati'On, can cel the incorporation of the credit union.

(3) No credit union after receipt of notice to reorganize its affairs under subsecti'On (1), clause (

b) shall disburse any moneys for any purpose whatsoever without the consent of the Director until its af fairs have been 'reorganized to the satisfaction of the Director. 5

(4) Where the Director has made an order under sub section (1), clause (

b) and thereafter the Director iis of the opinion that affairs of the credit union have been corrected and are once again in a position to be managed by the board of directors, he shall revoke the order.

(5) No credit union, after service upon it of an order made under subs'ection (1), shall disbur'se m'Oney for any purpose without the consent of the Director.

Section 63 is amended by striking out subsection (2) and by subst,ituting the following therefor:

(2) A credit union has a lien upon the shares and de posits of a member for any debt, loan, obliga:tionor judg ment owing by him to the credit union with respect to which he is a debtor, borrower, maker, co-maker, endors'er, guar antor 'Or judgment debtor.

(3) Without restrkting any other rights a credit union may have with respect to any other security or collateral, a credit union may, from time to time or at any time, apply or credit to the debt mentioned in subsection (2) the shares or deposits of a member.

(4) In this section, a debt includes costs and expenses for which a liability exists in favour of 'a credit union and also includes interest.

Section 72, subsection (1) is amended by striking out, the words "share and deposit accounts" and by substituting therefor the words "deposits and for shares".

Section 75 is amended by adding after subsection (1) the following:

(1.1) Where (

a) a credit union that is required to reorganize its affairs pursuant to

section 58, subsection (1), clause (

a) dues not do so to the satisfaction of the Director, or (

b) the Stabilization C'Ommittee or a person authorized, pursuant to

section 58, subsection (1), claus'e (b), to reorganize, manage and supervise the affairs of a credit union, recommends to the Director that the credit union be wound up, the Director may appoint himself 'Or such other person as he considers proper as liquidator of the credit union and upon completion of the winding up of the credit union the Director shall direct the Registrar to cancel the incorpora tion of the credit union.

Section 79 is amended by striking out subsections (2) and (3). 24. This Act comes into force oln the day upon which it is assented to. 6

Section 63 presently reads: 63.

(1) Moneys payable by a member of a credit union are a debt due from him to the credit union and re,coverable as such in a court of competent jurisdtction.

(2) A credit uni'on has a lien on the shares and deposits of a member, (

a) for any debt due to the credit union by him, or (

b) for any loan endorsed by him, and may set off any amount credited to the member thereon in or to ward payment of the debt.

Section 72, subsection (1) presently reads: 72.

(1) A credit union whose financial position enables it to return to its members in full the moneys standing to their credH in share and deposit accounts may be dissolved by a resolution (

a) passed at a general meeting of which not less than 10 days' notice has been given, specifying the intenUon to propose the resolution, and (

b) passed by a majority of not less than three fourths of the votes cast by the members entitle,d to vote who are present in person at the meeting.

Section 75 deals with the liquidation of credit unions.

Section 79 presently reads: 79.

(1) Credit unLons may be members of regional, provincial, na tional or interna'tional associations or federations of credit unions or of credit unions and co-operatives.

(2) The credit union stabilization fund referred to in

section 41, sub section (5) is the Stabilization Fund heretofore established with the ,consent of the Director and administered by the Credit Union Federa tionof Alberta Limited for the purpose of providing financial aid to credit unions.

(3) The Federation shall continue to administer the Fund by means of a eommittee known as the Stabilization Committee appointed or continued as may be authorized or approved by the Lieutenant Gov ernor in Council. The contents of subsections (2) and (3) are now contained in sec tion 41.1; see

section 13 of this Bill. 6 Title: 1973 (17th, 2nd) Bill 85, The Credit Union Amendment Act, 1973

Document details

Collection	Alberta — Bills
Citation	L17 S2 5219
Type	bill
Volume / chapter	L17 S2 5219
Language	en
Format	json
Source	PROVINCIAL
Identifier	7be49caf104778298ff184257d3dae448f0f89cc

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