Bank Act (S.C. 1991, c. 46)

First Meeting of Members

Marginal note:Calling members’ meeting

• 47.02 (1) If at least five million dollars, or any greater amount that the Minister may specify, has been received by a federal credit union in respect of which letters patent were issued under subsection 22(2) from the issue of its membership shares and shares, the directors of the federal credit union must, without delay, call a meeting of the members of the federal credit union.

• Marginal note:Meeting of members

  (2) At the meeting, the members must

  • (a) make by-laws;

  • (b) elect directors in accordance with this Act and the federal credit union’s by-laws; and

  • (c) appoint an auditor or auditors to hold office until the close of the first annual meeting of the federal credit union.

• Marginal note:Term of office of first directors

  (3) The term of office of the first directors ends at the close of the meeting referred to in subsection (1).

Membership in a Federal Credit Union

Conditions of Membership

Marginal note:Membership governed by by-laws

• 47.03 (1) Subject to the provisions of this Act, membership in a federal credit union is governed by its by-laws.

• Marginal note:Minimum membership shares required

  (2) To be a member of a federal credit union, a person must acquire and hold the minimum number of membership shares required under the federal credit union’s by-laws.

• Marginal note:Member who ceases to hold the minimum

  (3) Subject to any limitations in the federal credit union’s by-laws, including limitations on the rights members may exercise, a member of a federal credit union who ceases to hold enough membership shares to be a member continues to be a member of the federal credit union for the purposes of this Act.

• Marginal note:Ground for expulsion

  (4) For greater certainty, subsection (3) does not prevent holding fewer than the minimum number of membership shares from being set out in the federal credit union’s by-laws as a ground for expulsion under subsection 47.06(1) or section 47.09.

Marginal note:Subscription deemed application

• 47.04 (1) A subscription for the number of membership shares in a federal credit union required by the federal credit union’s by-laws for membership constitutes an application for membership and the issue of a membership share to the applicant constitutes admission to membership.

• Marginal note:Approval required

  (2) Subject to subsection (1), a person becomes a member of a federal credit union when the person’s application for membership is approved by the directors or an employee authorized by the federal credit union and the applicant has complied fully with the federal credit union’s by-laws governing admission of members.

Withdrawal and Termination

Marginal note:Withdrawal of membership

• 47.05 (1) A member of a federal credit union may withdraw from the federal credit union at any time by giving notice in accordance with the by-laws.

• Marginal note:Deemed notice

  (2) A deceased member is deemed to have given notice to the federal credit union of their intention to withdraw on the day of their death.

• Marginal note:Rights of withdrawing member

  (3) The by-laws of a federal credit union must set out the rights of a withdrawing member.

Marginal note:Expulsion

• 47.06 (1) A member of a federal credit union may be expelled from membership, in accordance with the by-laws, by a resolution of the directors on the grounds set out in the by-laws.

• Marginal note:Member’s rights relating to expulsion

  (2) The by-laws of a federal credit union must set out the rights of members who are expelled under subsection (1), and those rights must include

  • (a) the right of a member to receive advance notice of any meeting of the directors at which the board will consider a resolution to expel the member;

  • (b) the right of a member not to be expelled without being given an opportunity to make representations on the matter at the meeting of the directors;

  • (c) the right of an expelled member to appeal the decision of the directors at the next meeting of the members; and

  • (d) the right of the expelled member to be reinstated as a member of the federal credit union if, at the next meeting of the members, the members, by ordinary resolution, set aside the directors’ resolution.

• Marginal note:Procedures to be set out in by-laws

  (3) The by-laws of a federal credit union must set out

  • (a) the procedures to be followed by the directors to provide the advance notice referred to in paragraph (2)(a); and

  • (b) the procedures to be followed relating to the appeal referred to in paragraph (2)(c).

• Marginal note:Notice of decision

  (4) If the directors pass a resolution expelling a member under subsection (1), the federal credit union must, within five days after the passing of the resolution, notify the member of the directors’ decision by registered letter addressed to the member at the member’s recorded address.

Marginal note:Inactivity

47.07 No by-law may provide for the expulsion of a member by reason only of inactivity of the member in relation to the business or affairs of the federal credit union.

Marginal note:Redemption

47.08 No by-law governing the withdrawal of a member from membership or the termination of the membership of a member may authorize a redemption of membership shares in contravention of section 485.

Marginal note:Termination by members

47.09 Unless the by-laws provide otherwise, the membership of a member may be terminated by a special resolution of the members. Section 47.06 applies, with any modifications that the circumstances require, to a termination by the members.

Marginal note:Winding-up proceedings in respect of member

47.1 Despite subsection 47.06(1), a federal credit union may, by written notice to a member, terminate the membership if the member is a body corporate and winding-up proceedings have commenced with respect to it.

General Provisions — Federal Credit Unions

Marginal note:Prohibition

47.11 An entity must not become a member of a federal credit union if, as a result of becoming a member, the majority of the members of the federal credit union would not be natural persons.

Marginal note:Provision of services

47.12 A federal credit union must provide its services primarily to its members.

Marginal note:Right to vote

47.13 Each member of a federal credit union has only one vote on all matters to be decided by the members.

Marginal note:Members under 18

47.14 Subject to the by-laws, a person less than 18 years of age may be admitted to membership in a federal credit union and may vote at meetings of the federal credit union.

Marginal note:Membership not transferable

47.15 No transfer of a membership is valid for any purpose.

Marginal note:Reinstatement — section 47.06

• 47.16 (1) A person whose membership has been terminated under section 47.06 may be reinstated as a member of the federal credit union only by ordinary resolution of the members.

• Marginal note:Reinstatement — section 47.09

  (2) A person whose membership has been terminated under section 47.09 may be reinstated as a member of the federal credit union only by special resolution of the members.

Marginal note:Transfer of membership shares

47.17 No transfer of membership shares in a federal credit union is valid unless the transfer is approved by resolution of the directors.

Marginal note:Obligation to have at least five members

• 47.18 (1) A federal credit union must ensure that at all times it has at least five members.

• Marginal note:Membership too low

  (2) If the membership of a federal credit union is reduced to fewer than five members, the federal credit union must, without delay, take the steps that are necessary to

  • (a) make an application referred to in subsection 39.2(1) or section 216.08; or

  • (b) liquidate and dissolve the federal credit union under Part VI.

Marginal note:Exemption

47.19 The Minister may, subject to any terms and conditions that the Minister considers appropriate, exempt any entity or federal credit union from the application of sections 47.11, 47.12 and 47.18.

Commencement and Carrying on of Business

Marginal note:Order to commence and carry on business

• 48 (1) A bank shall not carry on any business until the Superintendent has, by order, approved the commencement and carrying on of business by the bank.

• Marginal note:Deeming

  (2) If, on the day this subsection comes into force, an order approving the commencement and carrying on of business by a bank named in Schedule I or II as those Schedules read immediately before that day, has not been made, such an order is deemed to have been made in respect of the bank on that day.

• Marginal note:Continued bank

  (3) Except in respect of a body corporate that is continued as a bank under this Act for the purposes of forthwith amalgamating with one or more bodies corporate and continuing as a bank under this Act, where letters patent continuing a body corporate as a bank under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the bank.

• Marginal note:Amalgamated bank

  (4) Where letters patent amalgamating and continuing two or more bodies corporate as a bank under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the bank.

• Marginal note:Subsection 49(2) and section 52 do not apply

  (5) For greater certainty, subsection 49(2) and section 52 do not apply in respect of a bank referred to in subsections (3) and (4).

Marginal note:Authority to make order

• 49 (1) On application by a bank, the Superintendent may make an order approving the commencement and carrying on of business by the bank.

• Marginal note:Statement of payments

  (2) An application by a bank for an order under subsection (1) must contain a statement setting out the amounts paid or to be paid by the bank in connection with its incorporation and organization.

Marginal note:No payments before order

50 Until an order approving the commencement and carrying on of business is made for a bank, the bank must not make any payment on account of incorporation or organization expenses out of moneys received from the issue of the shares or the membership shares of the bank and interest on those moneys, except reasonable sums

• (a) for the remuneration of not more than two officers;

• (b) for the payment of costs related to the issue of shares, or membership shares, of the bank; and

• (c) for the payment of clerical assistance, legal services, accounting services, office accommodation at one location, office expenses, advertising, stationery, postage and travel expenses.

Marginal note:Deposits and investments before order

51 Where a bank comes into existence but no order approving the commencement and carrying on of business is made for the bank, the bank may only

• (a) deposit, in Canada, paid-in capital of the bank in another deposit-taking Canadian financial institution; or

• (b) invest paid-in capital of the bank in unencumbered securities of the Government of Canada or the government of any province.

Marginal note:Conditions for order

• 52 (1) The Superintendent shall not make an order approving the commencement and carrying on of business by a bank until it has been shown to the satisfaction of the Superintendent that

  • (a) the meeting of shareholders of the bank referred to in subsection 46(1), or, in the case of a federal credit union, the meeting of members referred to in subsection 47.02(1), has been duly held;

  • (b) the bank has paid-in capital of at least five million dollars or any greater amount that is specified by the Minister under subsection 46(1) or 47.02(1);

  • (c) the expenses of incorporation and organization to be borne by the bank are reasonable; and

  • (d) all other relevant requirements of this Act have been complied with.

• Marginal note:Time limit

  (2) The Superintendent shall not make an order approving the commencement and carrying on of business by a bank more than one year after the day on which the bank comes into existence.

Marginal note:Conditions of order

• 53 (1) An order approving the commencement and carrying on of business by a bank may contain such conditions or limitations that are consistent with this Act and relate to the business of the bank as the Superintendent deems expedient and necessary.

• Marginal note:Deemed condition

  (2) An order approving the commencement and carrying on of business by a federal credit union is deemed to contain a condition that the federal credit union must, on an ongoing basis, be organized and carry on business on a cooperative basis in accordance with section 12.1.