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Bank Act (S.C. 1991, c. 46)

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Act current to 2020-01-27 and last amended on 2019-06-21. Previous Versions

PART XII.1Authorized Foreign Banks (continued)

Business and Powers (continued)

Marginal note:Deposits less than $150,000

  •  (1) Subject to the regulations, an authorized foreign bank that is not subject to the restrictions and requirements referred to in subsection 524(2) may not, in respect of its business in Canada, act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

  • Meaning of deposit

    (2) In this section, deposit has the meaning assigned to that term by subsection 545(3).

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations respecting the circumstances in which, and the conditions under which, an authorized foreign bank referred to in subsection (1) may act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

  • 1991, c. 46, s. 546
  • 1996, c. 6, s. 18
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 143

Marginal note:Shared premises

  •  (1) Subject to the regulations, no authorized foreign bank shall carry on business in Canada on premises that are shared with those of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the authorized foreign bank.

  • Marginal note:Limitation

    (2) Subsection (1) only applies in respect of premises or any portion of premises on which both the authorized foreign bank and the member institution carry on business with the public and to which the public has access.

  • Marginal note:Adjacent premises

    (3) Subject to the regulations, no authorized foreign bank shall carry on business in Canada on premises that are adjacent to a branch or office of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the authorized foreign bank, unless the authorized foreign bank clearly indicates to its customers that its business and the premises on which it is carried on are separate and distinct from the business and premises of the affiliated member institution.

  • Marginal note:Regulations

    (4) The Governor in Council may make regulations

    • (a) respecting the circumstances in which, and the conditions under which, an authorized foreign bank may carry on business in Canada on premises that are shared with those of a member institution referred to in subsection (1); and

    • (b) respecting the circumstances in which, and the conditions under which, an authorized foreign bank may carry on business in Canada on premises that are adjacent to a branch or office of a member institution referred to in subsection (3).

  • 1991, c. 46, s. 547
  • 1996, c. 6, s. 19(E)
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 144

Marginal note:Restriction on securities activities

 An authorized foreign bank shall not deal in Canada in securities to the extent prohibited or restricted by any regulations that the Governor in Council may make for the purposes of this section.

  • 1991, c. 46, s. 548
  • 1999, c. 28, s. 35

Marginal note:Restriction on insurance business

  •  (1) An authorized foreign bank shall not undertake in Canada the business of insurance except to the extent permitted by this Act or the regulations.

  • Marginal note:Restriction on acting as agent

    (2) An authorized foreign bank shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space in any branch in Canada of the authorized foreign bank to any person engaged in the placing of insurance.

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations respecting the matters referred to in subsection (1) and regulations respecting relations between authorized foreign banks and

    • (a) entities that undertake the business of insurance; or

    • (b) insurance agents or insurance brokers.

  • Marginal note:Saving

    (4) Nothing in this section precludes an authorized foreign bank from

    • (a) requiring insurance to be placed by a borrower for the security of the authorized foreign bank; or

    • (b) obtaining group insurance for its employees.

  • Definition of business of insurance

    (5) In this section, business of insurance includes

    • (a) the issuance of any annuity if the liability in respect of the annuity is contingent on the death of a person; and

    • (b) the issuance of any debt obligation, any of whose terms and conditions are established on the basis of mortality considerations, under which the issuer is obliged to make periodic payments.

  • 1991, c. 46, s. 549
  • 1999, c. 28, s. 35
  • 2012, c. 19, s. 207

Marginal note:Restriction on leasing

 An authorized foreign bank shall not engage in Canada in any personal property leasing activity in which a financial leasing entity as defined in subsection 464(1) is not permitted to engage.

  • 1991, c. 46, s. 550
  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 145

Marginal note:Restriction on residential mortgages

  •  (1) An authorized foreign bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance a loan for that purpose, if the amount of the loan, together with the amount outstanding of any mortgage having an equal or prior claim against the property, would exceed 80 per cent of the value of the property at the time of the loan.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of

    • (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or under which a different limit on the value of property on the security of which the authorized foreign bank may make a loan is established;

    • (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;

    • (c) the acquisition by the authorized foreign bank from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the authorized foreign bank to the entity against the issue of those securities; or

    • (d) a loan secured by a mortgage where

      • (i) the mortgage is taken back by the authorized foreign bank on a property disposed of by it, including where the disposition is by way of a realization of a security interest, and

      • (ii) the mortgage secures payment of an amount payable to the authorized foreign bank for the property.

  • 1991, c. 46, s. 551
  • 1999, c. 28, s. 35
  • 2007, c. 6, s. 86

Marginal note:Restriction on charges to borrowers

  •  (1) Subject to any regulations made under subsection (2), an authorized foreign bank that has obtained insurance or a guarantee against default on a loan made in Canada on the security of residential property shall not charge a borrower an amount for the insurance or guarantee that exceeds the actual cost to the authorized foreign bank of the insurance or guarantee.

  • Marginal note:Regulations

    (2) The Governor in Council may make regulations

    • (a) respecting the determination of the actual cost to an authorized foreign bank for the purposes of subsection (1);

    • (b) respecting the circumstances in which an authorized foreign bank is exempt from the application of subsection (1);

    • (c) respecting, in relation to insurance or a guarantee against default on a loan made by an authorized foreign bank in Canada on the security of residential property,

      • (i) the arrangements into which the authorized foreign bank, its representatives and its employees may or may not enter, and

      • (ii) the payments or benefits that the authorized foreign bank, its representatives and its employees may or may not accept from an insurer or the insurer’s affiliates; and

    • (d) respecting any other matters necessary to carry out the purposes of subsection (1).

  • Marginal note:Regulations — disclosure

    (3) The Governor in Council may make regulations respecting the disclosure by an authorized foreign bank of information relating to insurance or a guarantee against default on a loan made by the authorized foreign bank in Canada on the security of residential property, including regulations respecting

    • (a) the information that must be disclosed, including information relating to

      • (i) the person who benefits from the insurance or guarantee,

      • (ii) the arrangements between the authorized foreign bank, its representatives or its employees and the insurer or the insurer’s affiliates, and

      • (iii) the payments and benefits that the authorized foreign bank, its representatives and its employees accept from an insurer or the insurer’s affiliates;

    • (b) the time and place at which, the form and manner in which and the persons to whom information is to be disclosed; and

    • (c) the circumstances under which an authorized foreign bank is not required to disclose information.

  • 1999, c. 28, s. 35
  • 2001, c. 9, s. 146
  • 2009, c. 2, s. 273
  • 2012, c. 5, s. 62(E)
 
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