Bank Act (S.C. 1991, c. 46)

Marginal note:Removal

• 617.2 (1) The Superintendent may, by order, remove a person from office as the principal officer of an authorized foreign bank if the Superintendent is of the opinion that the person is not suitable to hold that office

  • (a) on the basis of the competence, business record, experience, conduct or character of the person; or

  • (b) because the person has contravened or, by action or negligence, has contributed to the contravention of

    • (i) this Act or the regulations made under it,

    • (ii) a direction made under section 615,

    • (iii) an order made under section 617,

    • (iv) a condition or limitation in respect of the order approving the commencement and carrying on of business in Canada by the authorized foreign bank, or

    • (v) a prudential agreement entered into under section 614.1 or an undertaking given by the authorized foreign bank to the Superintendent.

• Marginal note:Risk of prejudice

  (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada have been or are likely to be prejudiced by the person’s holding office as principal officer.

• Marginal note:Representations may be made

  (3) The Superintendent must in writing notify the principal officer and the authorized foreign bank of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

• Marginal note:Suspension

  (4) If the Superintendent is of the opinion that the public interest is likely to be prejudiced by the principal officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the principal officer. The suspension may not extend beyond 10 days after the expiration of that period.

• Marginal note:Notice of order

  (5) The Superintendent shall, without delay, notify the principal officer and the authorized foreign bank of a removal order or suspension order.

• Marginal note:Consequences of removal order

  (6) The principal officer ceases to hold that office as of the date the removal order is made or any later date specified in the order.

• Marginal note:Appeal

  (7) The principal officer or the authorized foreign bank may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.

• Marginal note:Powers of Federal Court

  (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.

• Marginal note:Order not stayed by appeal

  (9) A removal order is not stayed by an appeal.

Supervisory Intervention

Meaning of assets

618 For the purposes of sections 619 to 627, assets, in relation to an authorized foreign bank, means

• (a) any asset in respect of its business in Canada, including the assets referred to in subsection 582(1) and section 617 and the assets under its administration; and

• (b) any other asset in Canada of the authorized foreign bank.

Marginal note:Superintendent may take control

• 619 (1) Subject to this Act, where any of the circumstances described in subsection (2) exist in respect of an authorized foreign bank or the business in Canada of an authorized foreign bank, the Superintendent may

  • (a) take control, for a period not exceeding sixteen days, of the assets of the authorized foreign bank; or

  • (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,

    • (i) take control, for a period exceeding sixteen days, of the assets of the authorized foreign bank, or

    • (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph.

• Marginal note:Circumstances for taking control

  (2) Control by the Superintendent under subsection (1) may be taken in respect of an authorized foreign bank where

  • (a) the authorized foreign bank has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (b) the authorized foreign bank in respect of its business in Canada has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (c) [Repealed, 2001, c. 9, s. 170]

  • (d) the assets of the authorized foreign bank in relation to its business in Canada are not, in the opinion of the Superintendent, sufficient to give adequate protection to the depositors and creditors of the authorized foreign bank in respect of its business in Canada;

  • (e) an asset appearing on the books or records of the authorized foreign bank in respect of its business in Canada or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;

  • (f) the authorized foreign bank has failed to comply with an order of the Superintendent under section 617; or

  • (g) in the opinion of the Superintendent, any other state of affairs exists in respect of the authorized foreign bank that may be materially prejudicial to the interests of the authorized foreign bank’s depositors or creditors in respect of its business in Canada or to those of the owners of any assets under the authorized foreign bank’s administration in respect of its business in Canada, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the authorized foreign bank or its holding body corporate.

• Marginal note:Notice of proposed action

  (3) The Superintendent shall notify an authorized foreign bank of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding ten days after it receives the notice.

• Marginal note:Objectives of Superintendent

  (4) Where, pursuant to subsection (1), the Superintendent has control of the assets of an authorized foreign bank, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the authorized foreign bank in respect of its business in Canada.

• Marginal note:Powers of Superintendent

  (5) Where, pursuant to subsection (1), the Superintendent has control of the assets of an authorized foreign bank,

  • (a) neither the authorized foreign bank nor any person acting on its behalf shall deal in any way with any of the assets without the prior approval of the Superintendent or a representative designated by the Superintendent; and

  • (b) no person acting on behalf of the authorized foreign bank shall have access to any cash or securities held in Canada by the authorized foreign bank without the prior approval of the Superintendent or a representative designated by the Superintendent.

• Marginal note:Persons to assist

  (6) Where the Superintendent takes control of the assets of an authorized foreign bank under subparagraph (1)(b)(i) or (ii), the Superintendent may appoint one or more persons to assist in the control of the assets.

Marginal note:Expiration of control

620 Control by the Superintendent under subsection 619(1) of the assets of an authorized foreign bank expires on the day on which a notice by the Superintendent is sent to the principal officer of the authorized foreign bank stating that the Superintendent is of the opinion that the circumstances leading to the taking of control of the assets by the Superintendent have been substantially rectified and that the authorized foreign bank can resume control of its assets.

Marginal note:Superintendent may request winding-up

621 The Superintendent may, at any time before the receipt of a request under section 622 to relinquish control of the assets of an authorized foreign bank, request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the authorized foreign bank, where the assets of the authorized foreign bank are under the control of the Superintendent pursuant to subparagraph 619(1)(b)(i) or (ii).

Marginal note:Requirement to relinquish control

622 Where no action has been taken by the Superintendent under section 621 and, after thirty days following the taking of control by the Superintendent under subsection 619(1) of the assets of an authorized foreign bank, the Superintendent receives from the principal officer of the authorized foreign bank a notice in writing requesting the Superintendent to relinquish control, the Superintendent must, not later than twelve days after receipt of the notice,

• (a) comply with the request; or

• (b) request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the authorized foreign bank.

Marginal note:Advisory committee

623 The Superintendent may appoint a committee of not more than six members to advise the Superintendent in respect of the assets and all other matters pertinent to the duties and responsibilities of the Superintendent in exercising control of the assets. The committee shall be appointed from among the banks and authorized foreign banks that are subject to an assessment under section 23 of the Office of the Superintendent of Financial Institutions Act and required to share in the expenses resulting from the taking of control of the assets of the authorized foreign bank under subsection 619(1).

Marginal note:Expenses payable by authorized foreign bank

• 624 (1) Where control of the assets of an authorized foreign bank has been taken under subparagraph 619(1)(b)(i) or (ii) and the control expires or is relinquished under section 620 or paragraph 622(a), the Superintendent may direct that the authorized foreign bank be liable for repayment of all or part of the expenses resulting from the taking of control of the assets and assessed against and paid by other authorized foreign banks and by banks under section 23 of the Office of the Superintendent of Financial Institutions Act, together with any interest in respect of the expenses at any rate that is specified by the Superintendent.

• Marginal note:Debt due to Her Majesty

  (2) Where any direction is made under subsection (1), the amount for which the authorized foreign bank is liable is a debt due to Her Majesty in right of Canada payable on demand and is recoverable in the Federal Court or any other court of competent jurisdiction.

Marginal note:Priority of claim in liquidation

625 In the case of the winding-up of the business in Canada of an authorized foreign bank, the expenses resulting from the taking of control of the assets of the authorized foreign bank under subsection 619(1) and assessed against and paid by other authorized foreign banks and by banks under section 23 of the Office of the Superintendent of Financial Institutions Act and interest in respect of the expenses at any rate that is specified by the Superintendent, constitute a claim of Her Majesty in right of Canada against the assets of the authorized foreign bank that ranks after any claim referred to in paragraph 627(1)(d).

Marginal note:Application of assessment

626 Any amount recovered under section 624 or 625 shall be applied to reduce the total amount of expenses incurred for or in connection with the administration of this Act.

Marginal note:Order of priority for payment of claims

• 627 (1) Subject to sections 72 and 94 of the Winding-up and Restructuring Act, where a winding-up order under that Act is made in respect of an authorized foreign bank,

  • (a) the payment of any amount due to Her Majesty in right of Canada, in trust or otherwise, in respect of the business in Canada of the authorized foreign bank is a first charge on the assets of the authorized foreign bank;

  • (b) the payment of any amount due to Her Majesty in right of a province, in trust or otherwise, in respect of the business in Canada of the authorized foreign bank is a second charge on the assets of the authorized foreign bank;

  • (c) the payment of the deposit liabilities of the authorized foreign bank and all other liabilities of the authorized foreign bank in respect of its business in Canada, except the liabilities referred to in paragraph (d) and section 625, is a third charge on the assets of the authorized foreign bank; and

  • (d) the payment of any fines and penalties for which the authorized foreign bank is liable in respect of its business in Canada is a last charge on the assets of the authorized foreign bank.

• Marginal note:Priority not affected

  (2) Nothing in subsection (1) prejudices or affects the priority of any holder of any security interest in any property of an authorized foreign bank.

• Marginal note:Priorities

  (3) Priorities within each of paragraphs (1)(a) to (d) shall be determined in accordance with the laws governing priorities and, where applicable, by the terms of the liabilities referred to in those paragraphs.

PART XII.2Dealings with Customers and the Public

DIVISION 1Interpretation

Marginal note:Definitions

• 627.01 (1) The following definitions apply in this Part.

  business day

  business day does not include a Saturday or a holiday. (jour ouvrable)

  charge

  charge includes interest and, for greater certainty, a fee. (frais)

  complaint

  complaint means dissatisfaction, whether justified or not, expressed to an institution with respect to

  • (a) a product or service in Canada that is offered, sold or provided by the institution; or

  • (b) the manner in which a product or service in Canada is offered, sold or provided by the institution. (plainte)

  credit agreement

  credit agreement includes an agreement for a line of credit, a credit card or any other kind of loan that is repayable in Canada. (convention de crédit)

  deposit-type instrument

  deposit-type instrument means a product that is issued in Canada by an institution, that is related to a deposit and that specifies a fixed investment period and either

  • (a) a fixed rate of interest; or

  • (b) a variable rate of interest that is calculated on the basis of the institution’s prime lending rate or bankers’ acceptance rate. (instrument de type dépôt)

  eligible enterprise

  eligible enterprise means a business with authorized credit of less than $1,000,000, fewer than 500 employees and annual revenues of less than $50,000,000. (entreprise admissible)

  institution

  institution means a bank or an authorized foreign bank. (institution)

  interest

  interest, in relation to an agreement for a deposit-type instrument, a principal-protected note or a prescribed product, includes any return payable by an institution under the agreement. (intérêt)

  maintenance charge

  maintenance charge means a charge in relation to a prepaid payment product that is imposed after the product has been purchased, other than a charge associated with the use of the product or of any service related to it. (frais de tenue de compte)

  member bank

  member bank means a bank that is a member institution as defined in section 2 of the Canada Deposit Insurance Corporation Act. (banque membre)

  optional product or service

  optional product or service means a product or service that is provided in Canada by an institution, an affiliate that the institution controls or an agent or representative of the institution or affiliate, for an additional charge, as a supplement to another product or service that is offered or provided by the institution. (produit ou service optionnel)

  personal authentication information

  personal authentication information means a personal identification number or any other password or information that a borrower creates or adopts to be used to authenticate their identity in relation to a credit card or credit card account. (authentifiant personnel)

  personal deposit account

  personal deposit account means a deposit account in the name of one or more natural persons that is kept by that person or those persons other than for business purposes. (compte de dépôt personnel)

  point of service

  point of service means a physical location to which the public has access and at which an institution carries on business with the public through natural persons in Canada. (point de service)

  prepaid payment product

  prepaid payment product means a physical or electronic product that is issued in Canada by an institution, that is or can be loaded with funds and that can be used to make withdrawals or purchase goods or services. (produit de paiement prépayé)

  principal-protected note

  principal-protected note means a financial instrument that is issued in Canada by an institution to a person and that

  • (a) provides for one or more payments to be made by the institution that are determined, in whole or in part, by reference to an index or reference point, including

    • (i) the market price of a security, commodity, investment fund or other financial instrument, and

    • (ii) the exchange rate between any two currencies; and

  • (b) provides that the principal amount that the institution is obligated to repay at or before the note’s maturity is equal to or greater than the total paid by the person for the note.

  A principal-protected note does not include a financial instrument that specifies that the interest or return on the instrument is determined solely on the basis of a fixed rate of interest or return or a variable rate of interest or return that is calculated on the basis of the institution’s prime lending rate or bankers’ acceptance rate. (billet à capital protégé)

  promotional product

  promotional product means a prepaid payment product that is purchased by an entity and distributed as part of a promotional, loyalty or award program. (produit promotionnel)

  registered product

  registered product means a registered education savings plan, a registered retirement savings plan, a registered retirement income fund, a registered disability savings plan or any other plan, arrangement or fund to which Division G of Part I of the Income Tax Act applies that is provided by an institution to a natural person. (produit enregistré)

  residential mortgage

  residential mortgage means a loan made in Canada on the security of residential property that has four or fewer residential units. (hypothèque résidentielle)

  retail deposit account

  retail deposit account means a personal deposit account that is opened with a deposit of less than $150,000 or of less than any greater prescribed amount. (compte de dépôt de détail)

  retail deposit-taking branch

  retail deposit-taking branch means a branch or office in Canada of a financial institution at which the financial institution, through a natural person, opens retail deposit accounts and disburses cash to customers. (succursale de dépôt de détail)

  rural area

  rural area means an area located in Canada outside an urban area. (zone rurale)

  undue pressure

  undue pressure means any pressure, imposed in the form of a practice or communication or otherwise, that could be reasonably considered to be excessive or persistent in the circumstances. (pressions indues)

  urban area

  urban area, on a particular day, means a population centre, as defined in the census dictionary published by Statistics Canada for the purpose of the most recent general census whose results have been published before that day, that has a minimum population of 10,000 natural persons on the basis of that census. (zone urbaine)

• Marginal note:Business purposes

  (2) For greater certainty, a reference to “business purposes” in a provision of this Part is a reference to the business purposes of the natural person referred to in the provision.