Jobs and Economic Growth Act (S.C. 2010, c. 12)
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Assented to 2010-07-12
PART 17FEDERAL CREDIT UNIONS
1991, c. 46Bank Act
1902. The Act is amended by adding the following after section 12:
Marginal note:Cooperative basis
12.1 (1) For the purposes of this Act, a federal credit union is organized and carries on business on a cooperative basis if
(a) a majority of its members are natural persons;
(b) it provides financial services primarily to its members;
(c) membership in the federal credit union is wholly or primarily open, in a non-discriminatory manner, to persons who can use the services of the federal credit union and who are willing and able to accept the responsibilities of membership;
(d) each member has only one vote;
(e) a delegate has only one vote even though the delegate is a member or represents more than one member;
(f) dividends on any membership share are limited to the maximum percentage fixed in the federal credit union’s letters patent or by-laws; and
(g) surplus funds arising from the federal credit union’s operations are used
(i) to provide for the financial stability of the federal credit union,
(ii) to develop its business,
(iii) to provide or improve common services to members,
(iv) to provide for reserves or dividends on membership shares and shares,
(v) for community welfare or the propagation of cooperative enterprises, or
(vi) as a distribution to its members as a patronage allocation.
Marginal note:Restrictions
(2) Paragraph (1)(c) is subject to any restrictions in the by-laws of the federal credit union on the classes of persons to which membership may be available, as long as the restrictions are consistent with applicable laws with respect to human rights.
Marginal note:Member who is shareholder
12.2 For greater certainty, a member of a federal credit union who is also a shareholder of the federal credit union may exercise the rights given to a shareholder by this Act for all shares held by the member.
1903. Section 18 of the Act is renumbered as subsection 18(1) and is amended by adding the following:
Marginal note:No personal liability — federal credit unions
(2) The members of a federal credit union are not, as members, liable for any liability, act or default of the federal credit union except as otherwise provided by this Act.
1904. Section 22 of the Act is replaced by the following:
Marginal note:Incorporation of bank
22. (1) On the application of one or more persons made in accordance with this Act, the Minister may, subject to this Part, issue letters patent incorporating a bank, other than a federal credit union.
Marginal note:Incorporation of federal credit union
(2) On the application of five or more persons, a majority of whom are natural persons, made in accordance with this Act, the Minister may, subject to this Part, issue letters patent incorporating a federal credit union.
Marginal note:2001, c. 9, s. 47
1905. Section 27 of the Act is amended by striking out “and” at the end of paragraph (g) and by replacing paragraph (h) with the following:
(h) if the bank will be a federal credit union, that it will be organized and carry on business on a cooperative basis in accordance with section 12.1; and
(i) the best interests of the financial system in Canada including, if the bank will be a federal credit union, the best interests of the cooperative financial system in Canada.
1906. Subsection 28(1) of the Act is amended by adding the following after paragraph (a):
(a.1) in the case of a bank that is to be a federal credit union, a statement that it is a federal credit union;
1907. The Act is amended by adding the following after section 31:
Marginal note:First members of federal credit union
31.1 The incorporators of a federal credit union are deemed to be its first members.
1908. Section 33 of the Act is amended by adding the following after subsection (2):
Marginal note:Continuance for the purpose of amalgamation
(3) A local cooperative credit society may, if so authorized by the laws of the jurisdiction in which it is incorporated, apply to the Minister for letters patent continuing it as a federal credit union if it proposes to be continued under this Act for the purpose of amalgamating with another federal credit union in compliance with this Act.
1909. Subsections 34(1) and (2) of the Act are replaced by the following:
Marginal note:Application for continuance
34. (1) If a body corporate applies for letters patent under section 33, sections 23 to 27 apply in respect of the application, with any modifications that the circumstances require.
Marginal note:Special resolution approval
(2) If a body corporate applies for letters patent under section 33, the application must be duly authorized by a special resolution.
1910. Subsection 35(1) of the English version of the Act is replaced by the following:
Marginal note:Power to issue letters patent
35. (1) On the application of a body corporate under section 33, the Minister may, subject to this Part, issue letters patent continuing the body corporate as a bank under this Act.
1911. The Act is amended by adding the following after section 35:
Marginal note:Power to issue letters patent
35.1 (1) On the application of a local cooperative credit society under subsection 33(2), the Minister may, subject to this Part, issue letters patent continuing the local cooperative credit society as a federal credit union only if the Minister is of the opinion that the local cooperative credit society has complied with the regulations respecting notice and disclosure requirements.
Marginal note:Power to issue letters patent
(2) On the application of a local cooperative credit society under subsection 33(3), the Minister may, subject to this Part, issue letters patent continuing the local cooperative credit society as a federal credit union only if the Minister is of the opinion that
(a) the local cooperative credit society has complied with the regulations respecting notice and disclosure requirements; and
(b) the federal credit union that results from the amalgamation will satisfy the requirements for incorporation as a federal credit union.
Marginal note:Regulations
(3) The Governor in Council may make regulations respecting notice and disclosure requirements for the purpose of subsections (1) and (2).
1912. The portion of section 36 of the English version of the Act before paragraph (a) is replaced by the following:
Marginal note:Effect of letters patent
36. On the day set out in the letters patent continuing a body corporate as a bank,
1913. Section 38 of the Act is renumbered as subsection 38(1) and is amended by adding the following:
Marginal note:Membership shares
(2) In addition, if the body corporate is continued as a federal credit union,
(a) in the case of a body corporate with common shares,
(i) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act,
(ii) the holders of those common shares are deemed to be the members of the federal credit union, and
(iii) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect; and
(b) in the case of a body corporate that has members,
(i) the membership shares, however designated, of the body corporate are deemed to be membership shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act,
(ii) the members of the body corporate are deemed to be the members of the federal credit union, and
(iii) any agreement made before continuance under which the members of the body corporate have agreed to vote in a manner provided in the agreement is of no effect.
1914. Paragraph 39(2)(a) of the Act is replaced by the following:
(a) with respect to any activity described in paragraph (1)(a), 30 days after the date of issue of the letters patent or
(i) if the activity is conducted under an agreement existing on the date of issue of the letters patent, the expiry of the agreement, or
(ii) if the bank is a federal credit union and an undertaking to cease engaging in the activity has been given under subsection 973.02(1), the cessation date set out in the undertaking in respect of the activity;
Marginal note:2007, c. 6, s. 6
1915. The portion of subsection 39.1(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Transferring to other federal Acts — banks
39.1 (1) A bank that is not a federal credit union may
Marginal note:2007, c. 6, s. 6
1916. Section 39.2 of the Act is replaced by the following:
Marginal note:Transferring to other federal Acts — federal credit union
39.2 (1) A federal credit union may
(a) apply, with the approval in writing of the Minister, under the Canada Cooperatives Act for a certificate of continuance, or a certificate of continuance and a certificate of amalgamation, as a cooperative under that Act; or
(b) apply under the Cooperative Credit Associations Act for letters patent continuing the federal credit union as an association under that Act or amalgamating and continuing the federal credit union as an association under that Act.
Marginal note:Conditions for approval
(2) The approval referred to in paragraph (1)(a) may be given only if the Minister is satisfied that
(a) the federal credit union has published, once a week for four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where its head office is situated, a notice of its intention to apply for the approval;
(b) the application has been authorized by a special resolution of the members and, if the federal credit union has issued shares, by a separate special resolution of the shareholders of each class of shares; and
(c) the federal credit union does not hold deposits.
Marginal note:All shares have right to vote
(3) For the purpose of paragraph (2)(b), each share carries the right to vote in respect of the special resolution, whether or not it otherwise carries the right to vote in respect of any other matter.
Marginal note:Restriction on other transfers
(4) A federal credit union may not apply to be continued, or to be amalgamated and continued, as the case may be, as a body corporate other than one referred to in subsection (1).
Marginal note:Act ceases to apply
39.3 If a bank applies for a certificate or letters patent referred to in section 39.1 or 39.2 in accordance with that section and the certificate is given or the letters patent are issued, this Act ceases to apply to the bank as of the day on which the certificate or the letters patent take effect.
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