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Bank Act (S.C. 1991, c. 46)

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Act current to 2022-01-12 and last amended on 2021-06-30. Previous Versions

PART XIIIRegulation of Banks — Superintendent (continued)

Remedial Powers (continued)

Supervisory Intervention

Marginal note:Superintendent may take control

  •  (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of a bank, the Superintendent may

    • (a) take control, for a period not exceeding sixteen days, of the assets of the bank and the assets under its administration; 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 bank and the assets under its administration,

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

      • (iii) take control of the bank.

  • Marginal note:Circumstances for taking control

    (1.1) Control by the Superintendent under subsection (1) may be taken in respect of a bank where

    • (a) the 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    • (b) [Repealed, 2001, c. 9, s. 182]

    • (c) the assets of the bank are not, in the opinion of the Superintendent, sufficient to give adequate protection to the bank’s depositors and creditors;

    • (d) any asset appearing on the books or records of the bank or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;

    • (e) the regulatory capital of the bank has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its depositors or creditors;

    • (f) the bank has failed to comply with an order of the Superintendent under paragraph 485(3)(a);

    • (g) the bank’s deposit insurance has been terminated by the Canada Deposit Insurance Corporation; or

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

  • Marginal note:Notice of proposed action

    (1.2) The Superintendent must notify a 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

    (2) Where, pursuant to subsection (1), the Superintendent has control of the assets of a bank referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the bank.

  • Marginal note:Powers of Superintendent

    (3) Where, pursuant to subsection (1), the Superintendent has control of the assets of a bank referred to in that subsection,

    • (a) the bank shall not make, acquire or transfer any loan or make any purchase, sale or exchange of securities or any disbursement or transfer of cash of any kind without the prior approval of the Superintendent or a representative designated by the Superintendent; and

    • (b) no director, officer or employee of the bank shall have access to any cash or securities held by the bank unless

      • (i) a representative of the Superintendent accompanies the director, officer or employee, or

      • (ii) the access is previously authorized by the Superintendent or the Superintendent’s representative.

  • 1999, c. 28, s. 50
  • 2001, c. 9, s. 182

Marginal note:Powers suspended

  •  (1) If the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the powers, duties, functions, rights and privileges of the directors of the bank and of the officers of the bank responsible for its management are suspended. If the bank is a federal credit union, the powers of the members to make, amend or repeal by-laws are also suspended.

  • Marginal note:Superintendent to manage bank

    (2) Where the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the Superintendent shall manage the business and affairs of the bank and in doing so the Superintendent

    • (a) may perform any of the duties and functions that the persons referred to in subsection (1) were performing prior to the taking of control; and

    • (b) has and may exercise any power, right or privilege that any such person had or could have exercised prior to the taking of control.

  • Marginal note:Persons to assist

    (3) Where the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the Superintendent may appoint one or more persons to assist in the management of the bank.

  • 1999, c. 28, s. 51
  • 2010, c. 12, s. 2081

Marginal note:Expiration of control

 Control by the Superintendent under subsection 648(1) of a bank or of the assets of a bank expires on the day on which a notice by the Superintendent is sent to the directors and officers who conducted the business and affairs of the bank stating that the Superintendent is of the opinion that the circumstances leading to the taking of control by the Superintendent have been substantially rectified and that the bank can resume control of its business and affairs.

  • 1999, c. 28, s. 52

Marginal note:Superintendent may request winding-up

 The Superintendent may, at any time before the receipt of a request under section 652 to relinquish control of a bank or of the assets of a 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 bank, where

  • (a) the assets of the bank are under the control of the Superintendent pursuant to subparagraph 648(1)(b)(i) or (ii); or

  • (b) the bank is under the control of the Superintendent pursuant to subparagraph 648(1)(b)(iii).

  • 1999, c. 28, s. 52

Marginal note:Requirement to relinquish control

 Where no action has been taken by the Superintendent under section 651 and, after thirty days following the taking of control by the Superintendent under subsection 648(1) of a bank or of the assets of a bank, the Superintendent receives from its board of directors 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 bank.

  • 1999, c. 28, s. 53

Marginal note:Advisory committee

 The Superintendent may, 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 a bank pursuant to subsection 648(1), appoint a committee of not more than six members to advise the Superintendent in respect of assets, management and all other matters pertinent to the duties and responsibilities of the Superintendent in exercising control of the bank.

  • 1999, c. 28, s. 54

Marginal note:Expenses payable by bank

  •  (1) Where the Superintendent has taken control of a bank pursuant to subparagraph 648(1)(b)(iii) and the control expires or is relinquished pursuant to section 650 or paragraph 652(a), the Superintendent may direct that the bank be liable for repayment of all or part of the expenses resulting from the taking of control of the bank and assessed against and paid by other banks and by authorized foreign banks pursuant to 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 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.

  • 1999, c. 28, s. 55

Marginal note:Priority of claim in liquidation

 In the case of the winding-up of a bank, the expenses resulting from the taking of control of the bank under subsection 648(1) and assessed against and paid by other banks and by authorized foreign 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 bank that ranks after all other claims but prior to any claim in respect of the shares or membership shares of the bank.

  • 1999, c. 28, s. 56
  • 2010, c. 12, s. 2082

Marginal note:Application of assessment

 Any amount recovered pursuant to section 654 or 655 shall be applied to reduce the total amount of expenses incurred for or in connection with the administration of this Act.

  • 1999, c. 28, s. 57

PART XIVRegulation of Banks and External Complaints Bodies — Commissioner

Marginal note:Required information

 A bank, authorized foreign bank or external complaints body must provide the Commissioner with the information at the times and in the form that he or she may require for the purposes of the administration of the Financial Consumer Agency of Canada Act and the consumer provisions.

  • 1999, c. 28, s. 58
  • 2001, c. 9, s. 183
  • 2010, c. 25, s. 151

Marginal note:Confidential information

  •  (1) Subject to subsection (2), information regarding the business or affairs of a bank, authorized foreign bank or external complaints body or regarding persons dealing with any of them that is obtained by the Commissioner or by any person acting under the Commissioner’s direction, in the course of the exercise or performance of powers, duties and functions referred to in subsection 5(1) of the Financial Consumer Agency of Canada Act, and any information prepared from that information, is confidential and shall be treated accordingly.

  • Marginal note:Disclosure permitted

    (2) If the Commissioner is satisfied that the information will be treated as confidential by the agency, body or person to whom it is disclosed, subsection (1) does not prevent the Commissioner from disclosing it

    • (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

    • (b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

    • (c) to the Canada Deposit Insurance Corporation, for purposes related to its operation; and

    • (d) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions.

  • 1999, c. 28, s. 59
  • 2001, c. 9, s. 183
  • 2010, c. 25, s. 152

Marginal note:Examination of banks

  •  (1) The Commissioner, from time to time but at least once in each calendar year, shall make or cause to be made any examination and inquiry that the Commissioner considers necessary for the purposes of satisfying the Commissioner that the applicable consumer provisions are being complied with and, after the conclusion of each examination and inquiry, shall report on it to the Minister.

  • Marginal note:Special audit

    (1.1) The Commissioner may direct that a special audit of a bank or authorized foreign bank be made in accordance with any terms and conditions that he or she considers appropriate if, in the opinion of the Commissioner, it is required for the purposes of the administration of the Financial Consumer Agency of Canada Act and the consumer provisions, and may appoint for that purpose a firm of accountants qualified under subsection 315(1) to be an auditor of the bank or authorized foreign bank.

  • Marginal note:Report to Commissioner

    (1.2) A bank or authorized foreign bank in respect of which a special audit is made under subsection (1.1) shall provide the Commissioner with the results of the audit.

  • Marginal note:Expenses payable

    (1.3) The expenses incurred in respect of any special audit made under subsection (1.1) are payable by the bank or authorized foreign bank that is the subject of the audit.

  • Marginal note:Access to records of bank

    (2) The Commissioner, or a person acting under the Commissioner’s direction, in carrying out his or her duties under this section

    • (a) has a right of access to any records, including electronic records, of a bank, authorized foreign bank or external complaints body; and

    • (b) may require the directors or officers of a bank, authorized foreign bank or external complaints body to provide information and explanations, to the extent that they are reasonably able to do so, in respect of any matter subject to examination, inquiry or audit under this section.

Marginal note:Power of Commissioner on inquiry

 The Commissioner, in carrying out his or her duties in relation to consumer provisions, has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Commissioner’s direction.

  • 1999, c. 28, s. 60
  • 2001, c. 9, s. 183

Marginal note:Compliance agreement

 The Commissioner may enter into an agreement, called a “compliance agreement”, with a bank, authorized foreign bank or external complaints body for the purposes of implementing any measure that is designed so as to further compliance by it with the consumer provisions.

  • 1999, c. 28, s. 61
  • 2001, c. 9, s. 183
  • 2010, c. 25, s. 154

Marginal note:Commissioner’s directions

  •  (1) If, in the opinion of the Commissioner, a bank, authorized foreign bank or person, in conducting the business of the bank or authorized foreign bank, fails to comply, or there are reasonable grounds to believe that the bank, authorized foreign bank or person will fail to comply, with a compliance agreement, a consumer provision or this Part, the Commissioner may direct the bank, authorized foreign bank or person to comply with them and to perform any act that in the opinion of the Commissioner is necessary to do so.

  • Marginal note:Opportunity for representations

    (2) Subject to subsection (3), no direction shall be issued to a bank, authorized foreign bank or person under subsection (1) unless the bank, authorized foreign bank or person is provided with a reasonable opportunity to make representations in respect of the matter.

  • Marginal note:Temporary direction

    (3) If, in the opinion of the Commissioner, the length of time required for representations to be made under subsection (2) might be prejudicial to the public interest, the Commissioner may make a temporary direction with respect to the matters referred to in subsection (1) that has effect for a period of not more than 15 days.

  • Marginal note:Continued effect

    (4) A temporary direction under subsection (3) continues to have effect after the expiration of the 15-day period referred to in that subsection if no representations are made to the Commissioner within that period or, if representations have been made, the Commissioner notifies the bank, authorized foreign bank or person that the Commissioner is not satisfied that there are sufficient grounds for revoking the direction.

 
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