227 Order
to comply
Part 19
Miscellaneous
228 Extra‑provincial
institutions
229 Valuation
of property
230 Lieutenant
Governor in Council regulations
231 Ministerial
regulations
232 Regulations
‑ treatment of subject‑matter
Transitional
233 Supervision,
administration, liquidation and dissolution
234 Agreements
HER MAJESTY, by and with
the advice and consent of the Legislative Assembly of Alberta, enacts as
follows:
Part 1
Interpretation and Application
Interpretation
1(1) In this Act,
(a) “affairs”
means matters of internal concern to a corporation, including the relationships
among the corporation and its members, directors, officers, employees,
committees and subsidiaries, or any of them, and matters relating to related
party transactions, but does not include any business, other than as
aforementioned, carried on by the corporation with any of those other persons;
(b) “affiliate”
means an affiliate, if any, of a credit union or Central within the meaning of
section 2(6);
(c) “articles”
means a credit union’s articles of continuance, incorporation or amalgamation,
whether in their original or restated form and whether amended or not, and
includes articles of amendment, dissolution and revival;
(d) “at
fair market rate”, subject to section 49(6), means
(i) in respect of the acquisition or disposition of property,
including a lease or rental of property, and subject to regulations made with
respect to the valuation of property, at the most probable price in terms of
money that the property should bring in a competitive and open market under all
conditions requisite to a fair sale or let and assuming that the price is not
affected by undue stimuli, with both seller and buyer acting prudently and
knowledgeably,
(ii) subject to subclause (iii), in respect of the acquisition or
provision of services, at a consideration that might reasonably be expected to
be obtained or given for the services in question in an arm’s length
transaction in an open market between willing parties to a transaction of that
nature and on terms that, having regard to open market conditions, are
competitive and not unreasonable, and
(iii) in respect of the provision of services that are provided
generally to customers of the corporation in question, at the rate and on terms
that are offered in respect of those services to customers generally in the
ordinary course of that corporation’s business;
(e) “audit
committee”, subject to section 80, means the audit committee or the audit and
finance committee of a body corporate;
(f) “auditor”
means the external auditor of a corporation and includes any individual who is
responsible for conducting an external audit of the corporation’s financial
statements on behalf of its external auditor;
(g) “board”
means the directors of the corporation in question;
(h) “body
corporate” means a credit union, the Corporation or Central or all or any of
them, as the case may be;
(i) “bond
of association” means the community of interests, if any, between members or
proposed members of a credit union deriving from
(i) a common occupation, employer, association, religious affiliation
or membership of an organization, that exists generally in Alberta or in a
particular area of Alberta,
(ii) residence in a particular area of Alberta, other than wholly or predominantly
in a city, town, village, summer village or municipal district with a
population of more than 5000, or
(iii) any other similar relationship, other than one arising generally
from residence in Alberta;
(j) “borrow”
does not include the taking of deposits;
(k) “Central”
means the Credit Union Central Alberta Limited continued by section 156
provided it has no federal continuance or, where circumstances warrant, the
entity prescribed in relation to section 175.1(4)(c)(i);
(l) “committee”
means the audit, finance or credit committee of a body corporate;
(m) “Corporation”
means the Credit Union Deposit Guarantee Corporation continued by section 7,
and includes a special loans committee;
(n) “corporation”
means an incorporated body of persons, wherever or however incorporated;
(o) “Court”
means the Court of Queen’s Bench;
(p) “credit
union” means an existing credit union or a body of persons incorporated under
Division 2 of Part 3 or continued as an incorporated credit union or
incorporated under Division 1 of Part 15, but does not include a corporation
that has secured federal continuance;
(q) “deposit”
means money held or to be held by a corporation in a debtor and creditor
relationship in the ordinary course of the business of raising money by the
acceptance of deposits generally from persons from whom that corporation is
legally permitted to receive deposits, that is repayable on demand, after
notice, at a fixed date or on the expiry of a fixed term, and includes
(i) any earnings on that money,
(ii) the act of paying any such money to or the taking of such money
by that corporation, and
(iii) any document evidencing the holding of any such money;
(r) “designated
representative” means an individual, whether a member or not, acting in the individual’s
representative capacity, who has been designated by a member that is a
corporation, partnership or other unincorporated association to represent its
membership interests in a credit union;
(s) “director”
means
(i) in relation to the Corporation, a member of its board, and
(ii) in relation to any other corporation, a person occupying the
position of director of the corporation, by whatever name called;
(t) “earnings”
means interest, dividends, patronage rebates and any other distributions credited
or paid in relation to deposits or shares, and includes any such distributions
accrued but not yet credited or paid;
(u) “eligible
financial institution” means a treasury branch or a member institution of the
Canada Deposit Insurance Corporation or of any other deposit insurance or
guarantee plan prescribed by the Minister;
(v) “existing
credit union” means a body that was incorporated as a credit union under the
former Act and in existence immediately before November 1, 1989;
(v.1) “federal
Act” means a prescribed Act of the Parliament of Canada;
(v.2) “federal
continuance” means continuance under the federal Act;
(w) “finance
committee”, subject to section 80, means the finance committee or the audit and
finance committee of a body corporate;
(x) “financial
institution”, subject to clause (u), means
(i) a securities dealer, or
(ii) a member institution of the Canada Deposit Insurance Corporation
or of any other deposit insurance or guarantee plan prescribed by the Minister;
(y) “fiscal
year” means the fiscal year of the body corporate in question or, where the
body corporate is in its initial or last year, the portion of the fiscal year
for which it is in existence;
(z) “former
Act” means the Credit Union Act, RSA
1980 cC‑31;
(aa) “gazette”
(i) where used as a noun, means The Alberta Gazette, and
(ii) where used as a verb, means publish in an issue of the gazette a
notice of the information in question;
(bb) “general
meeting” means
(i) in relation to a credit union or Central, an annual or special
general meeting of its members, and
(ii) in relation to the Corporation, a meeting of its board,
and includes all the
regional meetings of a credit union referred to in section 57;
(cc) “individual”
means a natural person;
(dd) “insolvent”
means, in relation to a corporation, in a situation where
(i) it is unable to meet its obligations as they generally become
due,
(ii) it has ceased to pay its current obligations in the ordinary
course of its business as they generally become due, or
(iii) any other prescribed circumstances apply;
(ee) “investment”
includes the making of a deposit, but does not include the making of a loan;
(ff) “land”
means any estate or interest in land, including improvements to physical land,
except an estate or interest
(i) held by way of security only, or
(ii) acquired on or after November 1, 1989 on the realization of any
security so held;
(gg) “large
credit union” means a credit union that, at the end of the fiscal year
preceding the relevant time, had assets of a value equal to or in excess of the
prescribed amount;
(hh) “loan”
includes the interest on, and the expenses of, a loan for which the borrower is
legally liable to the lender and includes interest that is accrued but not yet
payable, but does not include the making of a deposit;
(ii) “member”,
where used in relation to a credit union, means a person, including a minor,
who, whether alone or jointly with others, complies with section 61 and
otherwise qualifies for membership in it under its bylaws, and includes any
person who becomes a member as a result of an amalgamation or arrangement under
Part 15 and any person having any rights or obligations relative to the credit
union that derive through a member;
(jj) “members’
equity” means, in relation to a credit union or Central and subject to any
modifications prescribed generally or with respect to specific applications of
the expression,
(i) its retained earnings,
(ii) the stated capital of shares issued by it, and
(iii) the amount in any other prescribed equity account;
(kk) “Minister”
means the Minister determined under section 16 of the Government
Organization Act as the Minister responsible for this Act;
(ll) “name
search report” means a report prescribed by the Minister respecting the name
proposed for a credit union;
(mm) “officer”
means, in relation to a corporation,
(i) its chief executive officer, president, chair, vice‑president,
vice‑chair, treasurer, secretary, general manager or assistant general
manager or any combination of those positions,
(ii) an individual who performs functions for the corporation normally
performed by a person mentioned in subclause (i), or
(iii) any other person designated as an officer by the bylaws or by the
board of the corporation;
(nn) “ordinary
resolution” means a resolution of a body corporate passed by a majority of the
votes cast by or on behalf of its members who cast valid votes on that
resolution at a general meeting;
(oo) “person”
means an individual, a corporation, a government, a partnership or other firm
or unincorporated association of persons, or a trustee or personal
representative of a person;
(pp) “prescribed”,
(i) in the expression “prescribed by the Minister”, means prescribed
or otherwise provided for by regulations made by the Minister, and
(ii) otherwise, means prescribed or otherwise provided for by
regulations made by the Lieutenant Governor in Council;
(qq) “professional
advisor” means
(i) an auditor, accountant, appraiser, engineer or lawyer, or
(ii) any other person membership in whose profession would tend to
lend credibility to a statement made or opinion given by the person,
and includes an individual
who is a member of or works in a professional capacity for a firm that is a
professional advisor;
(rr) “prudent
investment standards” means investment standards that, in the overall context
of an investment portfolio, a reasonably prudent person would apply to
investments made on behalf of another person with whom there exists a fiduciary
relationship to make such investments, without undue risk of loss or impairment
and with a reasonable expectation of fair return or appreciation;
(ss) “register”,
(i) where used as a noun, means the register established and
maintained under section 9, and
(ii) where used as a verb, means enter into the register pursuant to
this Act;
(tt) “registered
mail” includes certified mail;
(uu) “related
party” means, with respect to a credit union or Central, a person referred to
in section 2(4) who is not exempted from the status of related party pursuant
to section 52(2), and “party related to” shall be construed accordingly;
(vv) “related
party provision” means a provision of this Act or the regulations that relates
specifically to a related party transaction and does not relate generally to other
business;
(ww) “related
party transaction” means a transaction to which a credit union or Central or
its subsidiary and a party related to that body corporate are or would be
parties, whether or not any other persons are or would be parties to the transaction;
(xx) “remuneration”
includes any perquisite, benefit or advantage provided or to be provided to a
person directly or indirectly in respect of or purportedly in respect of
services rendered or to be rendered in the capacity in question;
(yy) “securities”,
subject to clause (zz) and section 3(3), means shares of capital stock, bonds,
mortgages, debentures, trust certificates, guaranteed investment certificates
or receipts, certificates of deposit, deposit receipts, bills, notes and other
evidences of indebtedness or deposits, and includes any other forms of security
prescribed by the Minister to be securities and documents evidencing
securities, but does not include any items described in this clause that are
prescribed by the Minister not to be securities;
(zz) “securities
dealer” means a dealer within the meaning of the Securities Act or within the meaning ascribed to any equivalent
word or phrase by any equivalent statute of another province or territory;
(aaa) “small
credit union” means a credit union that, at the end of the fiscal year
preceding the relevant time, had assets of a value amounting to less than the
amount prescribed in relation to clause (gg);
(bbb) “special
loans committee” means an agency of the Corporation established under section
143(5);
(ccc) “special
resolution” means,
(i) where the reference is to a resolution of a board, a resolution
passed at a board meeting by a majority of at least 2/3 of the votes validly
cast by the directors present at that meeting, and
(ii) otherwise, a resolution of a body corporate passed by a majority
of at least 2/3 of the votes cast by or on behalf of its members who cast valid
votes on that resolution at a general meeting;
(ddd) “special
shares” means shares, if any, issued by a credit union or Central under
regulations made under section 230(b) or, in relation to an existing credit
union, continued by section 108(2);
(eee) “subsidiary”
means a subsidiary, if any, of a corporation within the meaning of section
2(1);
(fff) “supervisor”
means a person under whose supervision a credit union or Central, as the case
may be, is placed under this Act;
(ggg) “voting
shares” means shares of any class carrying voting rights under all
circumstances or carrying voting rights by reason of the occurrence of a
contingency that has occurred and is continuing;
(hhh) “withdrawal
demand” means a cheque or other bill of exchange, a withdrawal slip, a receipt
or any written demand or direction drawn or made on a credit union for the
withdrawal, transfer or repayment of a deposit.
(2) The
Lieutenant Governor in Council may, for the purposes of this Act or specified
provisions of this Act, by regulation define any expression used in this Act
but not defined, and the expression has the meaning so defined.
(3) References
in this Act to the acquisition of land include the making of improvements to
physical land held under any estate or interest.
(4) References
in this Act to the repayment of a loan are deemed to include payment of the
interest and expenses referred to in subsection (1)(hh), and references to the
making of a loan are deemed to include any renewal of it.
(5) Subject
to this Act, the regulations, the articles of a credit union and the bylaws of
a body corporate,
(a) section
16(a) to (c) of the Interpretation Act
apply to bodies corporate as if they were established by this Act, and
(b) section
17(2) of that Act applies to the Corporation, including its special loans
committees, and to the committees of a body corporate as if they were a board established
by this Act.
(6) Where
this Act requires or permits something to be done by resolution of
(a) the
board of a credit union or of Central, or
(b) a
specified committee of a credit union or of Central,
then that thing must
or may, as the case may be, be done by special resolution, ordinary resolution
or resolution of the board or, in the case of clause (b), by resolution of that
committee.
(7) Where
any provision of this Act requires or permits something to be done by ordinary
resolution, then, if the bylaws require that it be done by special resolution
and notwithstanding that provision of this Act, that thing must be done by
special resolution.
(8) Existing
credit unions, amalgamated credit unions resulting from amalgamations under
this Act, the Corporation and Central shall be treated, for the purposes of any
other enactment that refers generally to corporations incorporated by or under
an Act of the Legislature, as incorporated by or under this Act, as the case
may be.
(9) In
this Act, references to performing an activity are deemed to include omitting
to act.
(10) For
the purposes of any enactment, other than Part 3 of this Act, that refers to
the articles or certificate of incorporation of a corporation,
(a) articles
of continuance or amalgamation, as restated or amended, are deemed to be the
articles of incorporation of a credit union that has such articles, and
(b) a certificate of continuance or amalgamation
is deemed to be the certificate of incorporation of an existing or amalgamated
credit union.
RSA 2000 cC‑32
s1;2003 c19 s11
Interpretation
respecting related parties
2(1) For the purposes of this Act, a corporation is
a subsidiary of another corporation if
(a) it
is controlled by
(i) that other corporation,
(ii) that other corporation and one or more corporations each of which
is controlled by that other corporation, or
(iii) 2 or more corporations each of which is controlled by that other
corporation,
or
(b) it
is a subsidiary of a corporation that is that other corporation’s subsidiary.
(2) For
the purposes of this Act, a corporation is controlled by a person or a group of
persons if
(a) securities
issued by the corporation carrying more than 50% of the votes that may be cast
to elect its directors are held, other than by way of security only, by or for
the benefit of that person or the persons comprising that group, and the votes
carried by those securities are sufficient, if exercised, to elect a majority
of its directors, or
(b) that
person has or the persons comprising that group have, in relation to the
corporation, any direct or indirect influence which, if exercised, would result
in control in fact of the corporation.
(3) For
the purposes of this Act, a corporation is the holding corporation of another
corporation if that other corporation is its subsidiary.
(4) For
the purposes of this Act, a person is a related party with respect to a credit
union or Central if that person
(a) is
a director or officer of that body corporate,
(b) is
the spouse or adult interdependent partner of such a director or officer,
(c) is
a relative of or a relative of the spouse or adult interdependent partner of,
and has the same home as, such a director or officer,
(d) is
an individual (excluding a partnership firm of individuals) who is the auditor
of that body corporate,
(e) is
an employee of that body corporate who falls within a prescribed class of
employees,
(f) is
a corporation more than 10% of whose voting shares are held or beneficially
owned, directly or indirectly, by a director or officer of that body corporate,
(g) is
a corporation controlled by a person referred to in any of clauses (a) to (e),
(h) is
a subsidiary or an affiliate of that body corporate,
(i) is
a director or officer of a subsidiary of that body corporate, or
(j) is
designated as a related party under subsection (8).
(5) In
subsection (4),
(a) “officer”
includes a person who has been appointed or elected or selected for employment
as an officer but who has not yet assumed the office;
(b) “relative”
means a relative by blood, marriage or adoption or by virtue of an adult
interdependent relationship;
(c) “spouse”
means the husband or wife of a married person but does not include a spouse who
is living separate and apart from the person if the person and spouse have
separated pursuant to a written separation agreement or if their support
obligations and family property have been dealt with by a court order.
(6) For
the purposes of this Act, a person is an affiliate of a credit union or of
Central if that person is not a subsidiary of that body corporate and
(a) is
a corporation more than 10% of whose voting shares are held or beneficially
owned, directly or indirectly, by that body corporate,
(b) has
entered into a partnership or joint venture with that body corporate or any of
its subsidiaries, or
(c) acts
in the capacity of trustee in relation to an unincorporated trust more than 10%
of the voting interests in which are held or beneficially owned by that body
corporate,
but a credit union and
Central are not affiliates of each other.
(7) For
the purposes of this Act, shares held or beneficially owned, directly or
indirectly, by a subsidiary of a body corporate are deemed to be so held or
owned by that holding body corporate as well.
(8) The
Minister may by order designate any person to be a party related to a credit
union or Central if the Minister considers that
(a) the
person is acting or has acted in concert with a party related to that body
corporate to participate in or enter into a transaction with the body corporate
that would be prohibited or restricted by a related party provision if entered
into with the body corporate by the related party, or
(b) there
exists or has existed between the person and that body corporate an interest or
relationship that might reasonably be expected to affect or has affected the
exercise of the best judgment of the body corporate with respect to a
transaction,
and any such designation applies generally, except to the
extent, if any, that the designation specifically limits its applicability to
specified transactions or other circumstances.
RSA 2000 cC‑32
s2;2002 cA‑4.5 s29
Application generally
3(1) Parts 3 to 11 and 14 to 16 apply only to credit
unions and, where so specifically stated, their subsidiaries and affiliates,
and do not apply, except where specifically stated, to the Corporation or
Central.
(2) Notwithstanding
anything in the Securities Act, that
Act, except to the extent, if any, prescribed,
(a) applies
to credit unions and to securities issued by them, except that it does not
apply to shares issued by a credit union,
(b) does
not apply to the Corporation or to securities issued by the Corporation, and
(c) applies
to Central and to securities issued by Central.
(3) In
subsection (2), “securities” means securities within the meaning of the Securities Act.
(4) The Loan
and Trust Corporations Act does not apply to a credit union to the extent
that the credit union is lawfully acting as a trustee pursuant to section
46(7).
1989 cC‑31.1
s3;1991 cL‑26.5 s335(15)
Application respecting
related parties
4(1) To the extent that there is a conflict between
the Business Corporations Act and
this Act or the regulations in their application to a party related to a credit
union or Central, this Act or the regulations prevail.
(2) Where
a provision of
(a) the
Loan and Trust Corporations Act,
(b) the
Securities Act,
(c) a
statute of any other province or territory or of Canada equivalent to an Act
referred to in clause (a) or (b),
(d) any
other prescribed statute, or
(e) the
regulations under any such statute
applies to a
subsidiary of a body corporate and a similar or corresponding provision of this
Act or the regulations under it would, but for this subsection, also apply to
that subsidiary, that other enactment applies, and the provision of this Act or
the regulations does not apply, to the subsidiary.
(3) To
the extent that there is any inconsistency in their application to a given
situation between a related party provision that prohibits or restricts any
activity and any other provision of this Act or the regulations, that related
party provision prevails.
(4) To the extent that there is any inconsistency
in their application to a given situation between a general provision that is
not a related party provision but that prohibits or restricts any activity and
a related party provision that would permit that activity, that general
provision prevails.
1989 cC‑31.1
s4;1991 cL‑26.5 s335(15)
Generally accepted
accounting principles and auditing standards
5(1) Subject to this Act, the regulations and any
order of the Minister under subsection (3),
(a) with
respect to the preparation of the financial statements of a body corporate, the
body corporate and any other person responsible for the preparation shall apply
generally accepted accounting principles, including the accounting
recommendations of the Canadian Institute of Chartered Accountants set out in
the Handbook published by that Institute, as amended from time to time, and
(b) with
respect to the examination by a body corporate’s auditor of its financial
statements for the purposes of the auditor’s report and with respect to the
report itself, the auditor shall apply generally accepted auditing standards,
including the auditing recommendations of that Handbook, as amended from time
to time.
(2) Notwithstanding
subsection (1)(a), the Minister may prescribe policies or rules that are to
apply with respect to the preparation of the financial statements of a credit
union or of Central, and a person referred to in subsection (1) shall apply
those policies or rules accordingly.
(3) The
Minister may order a credit union or Central to apply or ensure that there are
applied any accounting principles, policies or rules that are specified or
referred to in the order instead of generally accepted accounting principles or
of policies or rules contained in regulations made with reference to subsection
(2).
(4) The
Minister may order a credit union or Central to ensure that its auditor
(a) applies
any auditing procedures, additional to those contained in generally accepted
auditing standards, or
(b) prepares
any audit reports, additional to the reports required by subsection (1)(b),
that are specified or
referred to in the order.
(5) The Regulations
Act does not apply to generally accepted accounting principles or auditing
standards, or to policies, rules or procedures specified or referred to in an
order under subsection (3) or (4).
1989 cC‑31.1 s5
Part 2
Administration
Administration of Act
6(1) Subject to subsection (2) and except to the
extent that this Act or the regulations give the Corporation powers, duties or
functions relating to the administration or enforcement of this Act, the
Minister shall administer and enforce this Act.
(2) Without limiting the Minister’s delegation
powers under any other law, the Minister
may in writing delegate any of the Minister’s powers, duties and functions
under this Act or the regulations to the Corporation, other than the Minister’s
powers to make regulations and to administer or enforce this Act as it relates
to Central.
1989 cC‑31.1 s6
Continuance and
composition of Corporation
7(1) The Credit Union Stabilization Corporation is
continued as a corporation under the name “Credit Union Deposit Guarantee
Corporation”.
(2) The Corporation consists of its members, and
the members of the Corporation are those persons who comprise its board of
directors.
1989 cC‑31.1 s7
Corporation’s board and terms of office
8(1) The Lieutenant Governor in Council shall
appoint a board of directors for the Corporation consisting of
(a) 2
individuals appointed as directors on the nomination of Central, and
(b) 6
other individuals,
none of whom is a
director, officer or employee of a credit union that is under supervision or
administration.
(2) Where
a director of the Corporation is a director, officer or employee of a credit
union that becomes subject to supervision or administration, the director shall
forthwith tender the director’s resignation as a director of the Corporation to
the Lieutenant Governor in Council, through the Minister, and the Lieutenant
Governor in Council shall forthwith revoke the director’s appointment.
(3) The
term of office of a director of the Corporation is not to exceed 3 years,
except that where a new appointment or the director’s reappointment has not
taken place before the expiration of the director’s term of office, the
director may continue in office under the expired appointment until
(a) a
new appointment is made or the director is reappointed, or
(b) a
period of 6 months has elapsed since the expiration of the director’s original
term of office,
whichever occurs first.
RSA 2000 cC‑32
s8;2003 c19 s12
Register
9(1) The Minister shall establish and maintain a
register into which the Minister shall enter the information and documents
respecting bodies corporate that are prescribed or required by this Act to be
entered in it.
(2) The
Minister shall maintain separate parts of the register relating to credit
unions, the Corporation and Central, respectively.
(3) Instead
of maintaining the register in written documentary form, the Minister may have
the contents of the register entered or recorded by any photographic system,
any system of mechanical or electronic data processing or any other information
storage system that is capable of reproducing the required information in
intelligible written form within a reasonable time.
(4) On
the request of any person, the Minister shall, during normal business hours,
(a) permit
the person to inspect, and
(b) provide
the person with a certified copy of or an extract from,
any part of the register.
1989 cC‑31.1
s9;1998 c12 s3
Registration and
effective date of certificates
10(1) The Minister shall register all certificates
issued by the Minister under this Act forthwith after their becoming effective.
(2) A certificate becomes effective at the
beginning of the day shown on it as its effective date.
1989 cC‑31.1 s10
Ministerial or
Corporation orders, directions and approvals
11(1) Subject to subsection (2), where the Minister
or the Corporation is empowered or required to make an order or to give a
direction or approval under this Act or the regulations, it must be made or
given in writing.
(2) An
approval by a special loans committee of the Corporation may be given orally,
but that committee shall provide written confirmation of an oral approval to
the person to whom the approval was given forthwith after giving the approval.
(3) An
order made or a direction given by the Minister or the Corporation under this
Act or the regulations is effective immediately on its being served or at the
beginning of the day or any later time that is specified in it on any later
date that is specified in it as the effective date.
(4) An
order, direction or approval of the Lieutenant Governor in Council, the
Minister or the Corporation, including an approval of a special loans
committee, may be made subject to such terms and conditions as that person or
body imposes in it.
(5) No right of action lies against the Corporation
by reason of its approval of the viability of a business plan, or of changes to
a business plan, under Part 3.
RSA 2000 cC‑32
s11;2003 c19 s13
Form of documents
12 The Minister may direct that any document that
is to be provided by the Minister or to the Minister or to the Corporation or
to Central under this Act or the regulations is to be in the form authorized
and to contain the information required by the Minister, and may similarly
direct the number of originals or copies, or both, to be provided.
1989 cC‑31.1 s12
Extension of time
13 Where a person is required to provide the
Minister or the Corporation with any document or information under this Act or
the regulations, the Minister or the Corporation, as the case may be, may, on
written application made before the expiration of the last day for providing
it, extend the time for its provision for any period that the Minister or the
Corporation considers appropriate.
1989 cC‑31.1 s13
Circulation and minuting
of letters
14 The Minister may direct a body corporate to provide
a copy of any letter addressed to it by the Minister and any answer to that
letter to each of its directors, and the body corporate, in addition to
complying with the direction, shall include a copy of the Minister’s letter in
the minutes of the first board meeting following the direction and of the
answer in the minutes of the first board meeting following the answer.
1989 cC‑31.1 s14
Retention of documents
15(1) Subject to this Act, a body corporate shall
retain a prescribed document for at least the period of time prescribed in
relation to that document.
(2) Where
a credit union or Central is dissolved and was in liquidation, the liquidator
shall retain the records and other documents of the body corporate and the
liquidator’s final accounts for a period of 2 years following the dissolution,
and shall, on the expiration of that period, provide them to the Corporation.
(3) Where
a credit union or Central is imminently about to be dissolved and is not in
liquidation, it shall provide all its records and other documents to the
Corporation.
(4) The Corporation shall retain a document
provided to it under subsection (2) or (3) for at least the prescribed period
following the dissolution and may destroy it after that period has elapsed.
1989 cC‑31.1 s15
Confidentiality
16(1) Subject to this Act, where, in the course of
administering or enforcing this Act, the Minister or the Corporation obtains or
produces information, other than information that is registered, relating to
the business or affairs of Central, a credit union or a dissolved credit union
or relating to an application for incorporation as a credit union, the Minister
or the Corporation, as the case may be, shall not disclose the information
except in response to a request made
(a) for
access to a record containing the information under the Freedom of Information and Protection of Privacy Act to which that
Act relates, which request must or may be granted pursuant to that Act, or
(b) for
the information by Central, that credit union, a person representing that
dissolved credit union or an incorporator within the meaning of section 19(1),
as the case may be, which request the Minister or the Corporation may, but is
not bound to, grant.
(2) The
Minister or the Corporation may in any manner communicate or provide
information referred to in subsection (1) whose disclosure the Minister or the
Corporation considers to be required
(a) for
the proper administration or enforcement of this Act, to
(i) the Corporation or the Minister, as the case may be, or
(ii) persons acting under the Minister’s or the Corporation’s
direction or authority in the administration or enforcement of this Act,
(b) to
enable Central to comply with this Act or the regulations, to Central,
(c) for
the purpose of enabling the auditor of a body corporate to fulfil the auditor’s
functions as such, to that auditor, or
(d) for
regular law enforcement purposes, to a law enforcement authority.
(3) The
Minister may in any manner communicate information referred to in subsection (1)
(a) to
the government of any other province or territory or of Canada,
(b) for
the purposes of the administration or enforcement of the Securities Act, the Loan and
Trust Corporations Act or the Insurance
Act, to the person responsible for administering that Act or other persons
acting under that person’s direction or authority, or
(c) for
any prescribed purpose, to any other prescribed person.
(4) The
Corporation may provide prescribed information to a prescribed person.
(5) Subject
to subsection (6), a person to whom information is communicated or provided
under subsection (2) or (3)(b) or (c) shall comply with subsection (1) in
respect of it.
(6) Subsection
(5) does not apply to any disclosure made by the recipient referred to in that
subsection
(a) for
the relevant purpose, and to the relevant person, referred to in subsection
(2)(c) or (d) or (3)(b) or (c), or
(b) to
another person acting under that recipient’s direction or authority or
otherwise associated with the recipient in securing that purpose.
(7) Where,
for the purposes of the administration or enforcement of this Act, the Minister
receives information communicated to the Minister, or is allowed inspection of
or access to any document provided, by the government or a public body of Canada
or of any other province or territory, the Minister shall not disclose the
information or the contents of the document other than with the consent of that
government or public body.
(8) Subject to subsections (5) and (6), duties
under this section apply, as well as to the person referred to in this section,
also to any other person acting under that person’s direction or authority or
to whose notice information or a document comes as a result of any relationship
with that person.
1989 cC‑31.1
s16;1991 cL‑26.5 s335(15);1995 c28 s67;
1998 c12 s4
Service on Minister
17 A person may serve a notice or other document on
the Minister by
(a) delivering
the document or sending it by registered mail to the government office
responsible for the day‑to‑day administration of credit unions, or
(b) personally serving it on the public officer
in charge of that office or the officer’s deputy.
1989 cC‑31.1 s17
Part 3
Continuance, Incorporation and
Commencement of Business
Division 1
Continuance of Existing Credit Unions
Continuance
18 Existing credit unions continue to be
incorporated credit unions under and subject to this Act, with articles and
under a certificate of continuance.
1989 cC‑31.1 s18
Division 2
Incorporation of New Credit Unions
Interpretation and application
19(1) In this Division, “incorporators” means the
individuals subscribing the articles of incorporation.
(2) This Division does not apply to a credit union
that is to result from an amalgamation.
1989 cC‑31.1 s19
Entitlement to
incorporate
20 Twenty or more adult individuals, each of whom
is a Canadian citizen or has been lawfully admitted into Canada for permanent
residence and is ordinarily resident in Alberta, may, subject to this Division,
become incorporated as a credit union under this Division.
1989 cC‑31.1 s20
Application for
incorporation
21(1) An application for the incorporation of a
credit union under this Division is made by providing to the Minister the
articles of incorporation of the proposed credit union.
(2) The
articles of incorporation must set out, in respect of the proposed credit
union,
(a) its
name,
(b) the
full name and residential address of each incorporator,
(c) in
the case of a credit union that is to have a bond of association, a statement
of that bond,
(d) in
the case of a credit union that is not to have a bond of association, a
statement that there is no bond of association, and
(e) a
statement of any restrictions or prohibitions, other than those imposed by law,
on the businesses that the credit union may carry on.
(3) The
articles of incorporation must be subscribed by at least 20 individuals who
qualify under section 20 and who desire to be associated together as members of
the proposed credit union.
(4) The
articles of incorporation must be accompanied with
(a) a
copy, subscribed by all the incorporators, of the proposed bylaws,
(b) a
notice that contains the full name and residential address of each of the
proposed first directors,
(c) a
name search report,
(d) a
notice containing the address of the proposed registered office, and
(e) a
business plan, including a statement of the proposed expenses relating to the
incorporation and initial organization of the credit union,
and the credit union
shall also provide the Corporation with a copy of the business plan.
(5) The articles of incorporation must contain an
affidavit verifying the signatures of all persons subscribing the articles of
incorporation and the bylaws.
1989 cC‑31.1 s21
Approval or refusal of
application
22 The Minister shall approve the application for
incorporation
(a) if
the Minister is satisfied that
(i) sections 12 and 21 have been complied with,
(ii) the proposed bylaws comply with this Act and the regulations,
(iii) the proposed first directors are qualified to become directors
under section 65, and
(iv) the name proposed for the credit union complies with section 31,
(b) if
the Corporation has notified the Minister in writing that it is satisfied that
the business plan is viable, and
(c) unless the Minister considers that the
application is contrary to the public interest.
1989 cC‑31.1 s22
Incorporation and
registration of articles, etc.
23(1) If the Minister approves the application, the
Minister shall issue a certificate of the incorporation of the incorporators as
a credit union under this Act stating that they are so incorporated under the
name stated in the certificate of incorporation and shall assign to the credit
union a registration number.
(2) When
the Minister issues the certificate of incorporation, the Minister shall enter
into the register, in addition to the certificate of incorporation,
(a) the
articles of incorporation,
(b) the
bylaws,
(c) notice
of the registration number of the credit union,
(d) the
notice of directors referred to in section 21(4)(b), and
(e) the
notice of registered office referred to in section 21(4)(d).
(3) On
the coming into effect of the certificate of incorporation, the incorporators
become incorporated as a credit union on the basis set out in the certificate.
(4) Except in proceedings under section 195, a
certificate of incorporation is conclusive proof of the facts set out in it and
that the provisions of this Act and the regulations in respect of incorporation
and all requirements precedent to incorporation have been complied with.
1989 cC‑31.1 s23
Division 3
Commencement of Business
Requirements for
commencing business
24(1) Subject to subsection (3), a credit union
incorporated under Division 2 shall not commence business until the Minister
has approved the commencement of business by it.
(2) The
Minister shall not approve the commencement of business unless
(a) the
credit union has submitted to the Minister any changes made by it to its
business plan,
(b) the
Corporation has notified the Minister in writing that it is satisfied that any
changes made to the business plan do not affect its viability, and
(c) the
Minister is satisfied that
(i) the credit union has at least 50 members, if it has a bond of
association, and 250 members if it does not,
(ii) the members collectively have subscribed and paid in full for at
least the prescribed number of common shares on the condition that they may not
be redeemed under any circumstances within one year after the date of the
approval,
(iii) the members collectively have deposited at least the prescribed
amount and agreed to maintain the deposits with the credit union until at least
6 months after the date of the approval,
(iv) the credit union has demonstrated evidence of its capacity for
effective management and direction of its business and affairs,
(v) the certificate of incorporation has not been procured by the
fraud or misrepresentation of any person,
(vi) the credit union will not be used for an illegal purpose, and
(vii) the credit union will fulfil the purposes and mode of operation
of a credit union generally under section 26.
(3) Subsection
(1) does not prohibit the carrying on of such business as is necessary to
enable the credit union to meet the requirements of subsection (2).
(4) The
credit union shall pay to Central all deposits and share subscriptions taken
before the credit union is permitted to commence business, and Central shall
hold them, subject to allowing any prescribed withdrawals, on the prescribed
conditions for the members by whom or on whose behalf they were paid, pending
the commencement of business.
(5) The credit union shall report withdrawals
allowed under subsection (4) for the payment of incorporation and initial
organization expenses to the Corporation on the prescribed basis.
1989 cC‑31.1 s24
Revocation of
certificate of incorporation
25(1) The Minister, on giving a credit union at least
3 months’ written notice of the Minister’s intention to do so, may issue a
certificate revoking its certificate of incorporation if the requirements of
section 24(2) have not been met within 2 years after its incorporation.
(2) Where the Minister receives the written request
of the board of a credit union that has not issued any shares and has no
property or liabilities, the Minister may issue a certificate revoking the
credit union’s certificate of incorporation.
1989 cC‑31.1 s25
Part 4
Organization and Structure
Essential Features of a
Credit Union
Purposes and mode of
operation
26(1) The purposes of a credit union are, subject to
the restrictions set out in this Act and the regulations, to provide on a co‑operative
basis financial services wholly or primarily for its members, and its principal
purposes are to receive deposits from, and to make loans to, its members.
(2) A
credit union shall operate on a co‑operative basis such that
(a) subject
to section 60, a member has no more than one vote at its general meetings or in
respect of elections of its directors and officers,
(b) there
is no provision for proxy voting,
(c) membership
in it is
(i) voluntary, and
(ii) open to individuals resident in Alberta, except to the extent
that, in the case of a credit union with a bond of association, it is
restricted by that bond,
(d) its
business is carried on wholly or primarily for the benefit of its members, and
(e) net
income accruing from its business is
(i) distributed to members,
(ii) used to develop its business,
(iii) used to provide services for its customers,
(iv) used for the enhancement of its reserves or retained earnings, or
(v) used for another purpose approved by the
members.
1989 cC‑31.1 s26
Amendment and Restatement
of Articles
Amendment or replacement
of articles
27(1) Subject to this Part, a credit union may by
special resolution amend any part of its articles so long as the amended articles
set out the matters referred to in section 21(2)(a), (c), (d) and (e) and
otherwise comply with this Act and the regulations.
(2) A
clerical error in the articles may be amended by the board.
(3) For the purposes of this section and section
29, the repeal and replacement of articles are deemed to be an amendment of
them.
1989 cC‑31.1 s27
Amendment of articles
reflecting change in bond
28(1) A credit union may not change from being one
with a bond of association to being one without a bond of association unless it
satisfies the Minister that
(a) section
24(2)(c)(i), (ii), (iii) and (iv), as those subclauses apply in respect of a
credit union without a bond of association, have been complied with, with
references in those subclauses to the approval to commence business being
replaced by references to the coming into effect of the amendment of the
articles effecting the change, and
(b) the
change is not contrary to the public interest.
(2) A credit union may not change from being one
without a bond of association to one with a bond of association unless the
prescribed conditions, if any, are met.
1989 cC‑31.1 s28
Articles and certificate
of amendment
29(1) The credit union must, to enable the amendment
to become effective, send to the Minister articles of amendment respecting the
amendment.
(2) The
Minister, on receiving the articles of amendment, shall register them and issue
a certificate of amendment, unless the Minister considers that the amendment
does not comply with this Act or the regulations.
(3) On
the coming into effect of the certificate of amendment, the articles are
amended in accordance with the certificate.
(4) The amendment does not affect any existing
cause of action, claim or liability to prosecution in favour of or against any
person or any action or proceeding with respect to it.
1989 cC‑31.1 s29
Restatement of articles
30(1) A credit union
(a) may,
at any time, and
(b) shall,
when so directed by the Minister and within the period specified in the
direction,
restate articles that
have previously been amended by providing the restated articles to the
Minister.
(2) Restated
articles may not contain any amendments to the articles other than amendments
that have previously been registered.
(3) On
the Minister’s receipt of restated articles that comply with this section, the
Minister shall issue a certificate of restated articles.
(4) On the coming into effect of the certificate of
restated articles, the restated articles supersede the original articles and
all amendments to them.
1989 cC‑31.1 s30
Names
Name of credit union
31(1) Subject to this section, a credit union may not
have a name
(a) that
is the subject of any prohibitions, or that does not meet the requirements,
prescribed by the Minister,
(b) that
is identical to the name of a corporation or other organization appearing on a
name search report,
(c) that
so nearly resembles the name of any such corporation or organization that, in
the opinion of the Minister, the use of that name would or might be deceiving
or misleading to persons dealing with the credit union or the other entity, or
(d) that
is otherwise objectionable on grounds of public policy.
(2) A
credit union must have the phrase “Credit Union” or “Caisse Populaire” as part
of its name.
(3) An existing credit union is not required to
change the name that it had on May 13, 1987 to comply with this section.
1989 cC‑31.1 s31
Change of name
32(1) Where a credit union wishes to change its name
pursuant to section 27 it must, unless it has approval to the contrary from the
Minister, provide to the Minister a name search report.
(2) The
change of name is subject to the approval of the Minister, who shall determine
whether the proposed new name complies with this Part and the regulations.
(3) If the Minister approves the change of name,
the Minister shall, in addition to complying with section 29, gazette notice of
the change of name unless the Minister considers that the change is so minor
that no person will have reason to be confused or misled as to the identity of
the credit union following the change.
1989 cC‑31.1 s32
Use of name
33(1) A credit union shall ensure that its name is
set out in legible characters on all its contracts, invoices, negotiable
instruments and orders for services and all publications advertising its
services that are provided to any person by it or on its behalf.
(2) Where
the name of the credit union ends in “Limited”, “Limitée”, “Ltd.” or “Ltée”,
the credit union may use and may be legally designated by use of either the
full or the abbreviated form.
(3) Subject to subsection (2), a credit union shall
ensure that each of its premises where business with customers is conducted has
at least one permanent sign posted that advertises the credit union’s full name
in prominent characters and in a location clearly visible to customers.
1989 cC‑31.1 s33
Addresses, Service and
Records
Registered office and
addresses
34(1) A credit union shall have a registered office
in Alberta.
(2) A
credit union may at any time, by giving written notice to the Minister,
designate either or both
(a) a
separate records office in Alberta for itself, and
(b) an
address in Alberta for service by mail of it.
(3) The
credit union may at any time, by giving written notice to the Minister, change
the address of its registered office or revoke or change a designation under
subsection (2).
(4) The
credit union shall not designate a post office box as its registered office or
separate records office.
(5) The
Minister, on receiving notice under subsection (2) or (3), shall register it.
(6) Unless a designation of a separate records
office is in force, the credit union’s registered office is also its records
office.
1989 cC‑31.1 s34
Service on credit union
35 A person may serve a document on a credit union
by
(a) delivering
the document to the credit union’s registered office during its usual business
hours,
(b) personally
serving it on any director or officer or, where applicable, the administrator
or liquidator, of the credit union, or
(c) sending
it by registered mail to
(i) its registered office, or
(ii) the address for service by mail designated
in the latest registered notice of it under section 34.
1989 cC‑31.1 s35
Record-keeping
36(1) A credit union shall keep at its records office
(a) its
articles and bylaws, including all amendments to them,
(b) the
minutes of its general meetings, including resolutions passed,
(c) the
minutes of its board and committee meetings, including resolutions passed,
(d) a
current list of the names and latest known residential addresses and any
mailing addresses of all persons who are or have within the past year been
directors or officers, with the dates on which each directorship or office
commenced and, where applicable, ended,
(e) a
current list of the names and latest known residential addresses of all
individual members and the registered office and post office box, if any,
designated as its address for service by mail, in the case of a corporate
member, and
(f) its
financial statements, including any auditor’s reports.
(2) For
the purposes of subsection (1), a list is current if it accurately reflects the
situation existing at any given date within the 3‑month period
immediately preceding the time in question.
(3) A
credit union shall take such precautions to
(a) prevent
loss or destruction of,
(b) prevent
falsification of, and
(c) facilitate
detection and correction of inaccuracies in,
the documentary information that this Act or the
regulations require it to keep as are appropriate to the means used to record that
information.
RSA 2000 cC‑32
s36;2003 cP‑6.5 s67
Examination of documents
37(1) A credit union shall permit its members or
their agents to examine its documents described in section 36(1)(a), (b) and
(d) and, subject to section 84, section 36(1)(f).
(1.1) Notwithstanding subsection (1), a
credit union shall not disclose any residential address kept by the credit
union under section 36(1)(d).
(2) A
credit union shall permit any customer or the customer’s agent to examine a
statement of the customer’s transactions with the credit union.
(3) Where
a bylaw under section 45(4)(j) gives rights to members or their agents to
examine the list of members referred to in section 36(1)(e), the credit union
shall, by bylaw,
(a) provide
those rights conditionally or unconditionally, and
(b) where
those rights are conditional, specify the conditions under which those persons
may do so.
(4) A
person entitled to make an examination under this section is entitled to make
the examination only during the usual business hours of the credit union and on
giving the credit union reasonable notice.
(5) The
credit union shall permit the person referred to in subsection (4) to make
copies, or shall provide the person with copies, of the documents in question,
but the credit union is not required to provide any person with a copy of the
list of members referred to in section 36(1)(e).
(6) A
person entitled to examine the list of members pursuant to a bylaw under
subsection (3) or to have a copy of that list shall not use the list of members
for any purpose not legitimately related to the affairs of the credit union.
(7) Notwithstanding anything in this section but
subject to section 84(2), the credit union may make the provision of any of its
services under this section and section 38(2) subject to the payment of a
reasonable fee for the services.
RSA 2000 cC‑32
s37;2003 cP‑6.5 s67
Form of documents
38(1) Documentary information that a credit union is
required to keep under this Act or the regulations may be maintained in writing
or entered or recorded by a system referred to in section 9(3).
(2) Where a person is entitled to examine a
document that is kept by a credit union in a form other than in writing and
makes a request of the credit union to that effect, the credit union shall make
the information available to that person in an accurate and intelligible form
within a reasonable time and shall, on request, produce to the person a written
copy of the information.
1989 cC‑31.1 s38
Seal, Fiscal Year and
Annual Return
Seal
39(1) Subject to section 33(2), a credit union’s
seal, if any, must contain the full name of the credit union in legible
characters.
(2) A document executed by or on behalf of a credit
union is not invalid by reason only that the seal is not affixed to it.
1989 cC‑31.1 s39
Fiscal year
40 The fiscal year of a credit union is November 1
to the following October 31.
1989 cC‑31.1 s40
Annual return
41(1) A credit union shall, within 30 days after its
annual general meeting, provide to the Minister and the Corporation a return
showing
(a) the
name of the credit union,
(b) the
date of that annual general meeting,
(c) the
name and residential address of each director and of each officer who is not a
director,
(d) the
address of the credit union’s registered office,
(e) the
address of its separate records office, if any,
(f) the
address designated for service of it by mail, if any, and
(g) the
names of the credit union’s subsidiaries.
(2) On receiving the annual return, the Minister
shall register it.
1989 cC‑31.1 s41
Corporate Incidents
Capacity and powers
42(1) A credit union has the capacity and, subject to
this Act and the regulations, the rights, powers and privileges of an
individual.
(2) Subject
to this Act, a credit union may carry on its business, conduct its affairs and
exercise its powers in any jurisdiction outside Alberta to the extent that the
laws of that jurisdiction permit.
(3) A
credit union shall not do anything that is prohibited by, or do anything in a
manner that contravenes, its articles.
(4) An act of a credit union, including the
transfer or receipt of property by it, is not invalid by reason only that the
act is contrary to this Act, the regulations or its articles or bylaws or is
inconsistent with its purposes or the mode of operation referred to in section
26(2).
1989 cC‑31.1 s42
Absence of constructive
notice
43(1) Subject to subsection (2), a person is not
affected by or deemed to have notice or knowledge of the contents of a document
concerning a credit union by reason only that the document is registered or is
available for inspection at an office of a body corporate or of the Minister.
(2) A member, in the member’s capacity as such, is
bound by, and is to be treated as having notice and knowledge of the contents
of, the articles and the bylaws of the credit union.
1989 cC‑31.1 s43
Reliance by persons
dealing with credit union
44 Without limiting a person’s rights or
obligations under any other law, a credit union or a guarantor of an obligation
of a credit union may not assert against a person dealing with the credit union
or dealing with any person who has acquired rights from the credit union that
(a) the
articles, bylaws or any resolution of the credit union has not been complied
with,
(b) the
persons named as directors in the most recently registered return or notice
under section 21(4)(b), 41 or 69 are not the directors,
(c) the
place named as its registered office in the most recently registered return or
notice under section 21(4)(d), 34 or 41 is not its registered office,
(d) the
address designated for service by mail in the most recently registered return
or notice under section 34 or 41 is not its address for service by mail,
(e) a
person held out by the credit union as a director, officer or agent of the
credit union
(i) has not been duly elected or appointed, or
(ii) has no authority to exercise a power or perform a duty that the
director, officer or agent might reasonably be expected to exercise or perform,
(f) a
document issued by a director, officer or agent of the credit union with actual
or usual authority to issue the document is not valid or not genuine, or
(g) a
sale, lease or exchange of property referred to in section 47(1) was not
authorized,
except where that person has, or by virtue of that person’s
position with or relationship to the credit union ought to have, knowledge of
those facts at the relevant time.
1989 cC‑31.1 s44
Bylaws
45(1) In this section, “bylaws” includes any
amendment, repeal or repeal and replacement of the bylaws.
(2) A
credit union shall by ordinary resolution make bylaws in accordance with this
section.
(3) Notwithstanding
anything in this Act except subsection (4), bylaws are to govern only the
administration, management and regulation of the credit union’s affairs.
(4) The
bylaws must provide, subject to this Act and the regulations, for such of the
following matters as are applicable to the credit union but are not provided
for by this Act or the regulations or set out in the articles:
(a) membership,
including qualifications and applications for, approval, continuation,
termination and suspension of, and expulsion from, membership, and the rights
and obligations of holders of joint membership;
(b) the
calling and holding of, notice for, and the procedure and quorums and the
business that must or may be conducted at, general, board and committee
meetings, including the agenda at annual general meetings;
(c) voting
in respect of general, board and committee meetings, including the manner and
form of voting;
(d) the
minimum number of board meetings that must be held in any specified one‑year
period;
(e) the
actual number or any restrictions on the number of directors;
(f) in
respect of directors and officers, their election or appointment,
qualifications, terms of office, suspension and removal and the cessation of
their office and the filling of vacancies among their number;
(g) any
restrictions on powers that the credit union, or the board, committees,
officers or individual directors, would otherwise have, and any requirement
that a specified matter may be dealt with only by special or ordinary
resolution;
(h) transfers
of, and redemption rights for, shares;
(i) the
restrictions, if any, on the formation or acquisition of subsidiaries;
(j) a
statement of whether members or their agents are to have the right to examine
the list of members referred to in section 36(1)(e);
(k) all
other matters that are required by this Act or the regulations to be dealt with
in the bylaws.
(5) The
credit union may, by ordinary resolution,
(a) make
bylaws providing for any matter that this Act or the regulations provide may be
dealt with by bylaw, and
(b) amend
and repeal its bylaws.
(6) Where
this Act or the regulations impose a restriction on a credit union or on its
board or any of its committees, the bylaws may provide for still more
restrictive requirements, but in no case may they diminish the requirements of
this Act or the regulations.
(7) The
credit union shall provide the Minister and the Corporation with a certified copy
of each bylaw within 30 days after the ordinary resolution making it, and the
Minister shall register the bylaw.
(8) The articles may contain any provision that may
be contained in the bylaws and where the articles contain any such provision,
references in this Act to the bylaws are to be construed accordingly.
1989 cC‑31.1 s45
General Business
Restrictions
Restrictions on business
activities
46(1) A credit union or its subsidiary or
affiliate shall not carry on any business unless the carrying on of that
business is authorized by or under this section and is otherwise consistent
with this section.
(2) Subsections
(3) to (5) and (7) are subject to section 42(3) and any related party provision
or other law that prohibits, restricts or otherwise regulates any activity that
would otherwise be permitted by or under those subsections.
(3) A
credit union may carry on
(a) except
as prescribed, any business that is entailed in the fulfilment of any of the
purposes of a credit union,
(b) as
an ancillary business, the business of operating a post office within the
meaning of the Canada Post Corporation Act (Canada), or
(c) any
business that is prescribed.
(4) Subject
to any prescribed terms and conditions and any other law, a subsidiary or
affiliate may carry on
(a) any
business that a credit union is allowed by law to carry on, subject however to
the restrictions imposed by this Act and the regulations on credit unions,
(b) the
business of
(i) a corporation within the meaning of the Loan and Trust Corporations Act or within the meaning ascribed to
any equivalent expression by any equivalent statute of another province or
territory or of Canada,
(ii) a securities dealer, or
(iii) an insurance agent, within the meaning of the Insurance Act,
limited to the class of life insurance under that Act,
or
(c) any
other prescribed business.
(5) A
subsidiary or affiliate shall not engage generally in the business of accepting
deposits or lending money unless it is
(a) a
financial institution that is legally permitted to do so, or
(b) prescribed
as being entitled to do so.
(6) A
credit union or a person acting in the person’s capacity as a director, officer
or employee of a credit union shall not act as an insurer, insurance agent or
adjuster, within the meanings respectively ascribed to those expressions by the
Insurance Act.
(6.1) Notwithstanding
subsection (6), a credit union may hold a restricted insurance agent’s
certificate of authority under the Insurance
Act and a credit union that holds such a certificate and its officers,
directors and employees may act as an insurance agent only to the extent
authorized by the certificate.
(7) A credit union may act as trustee for a trust
in respect of a prescribed class of transaction.
RSA 2000 cC‑32
s46;RSA 2000 cI‑3 s854;2003 c19 s14
Disposal and acquisition
of assets
47(1) A credit union shall not sell, lease or
exchange all or substantially all of its assets other than in the ordinary
course of its business unless the disposal is approved by a special resolution.
(2) A
credit union may dispose of property to a related party that is a financial
institution at fair market rate so long as the consideration is fully paid in
money, but, without the prior approval of the Corporation, it shall not, in any
fiscal year, dispose of assets under this subsection having an aggregate value
in excess of 10% of its assets as at the end of the previous fiscal year.
(3) A credit union may, if its board has previously
authorized and the Corporation has previously approved the transaction, enter
into a transaction with a related party that is a financial institution if the
transaction involves the acquisition or disposal of assets as part of a
restructuring of the credit union or an amalgamation.
1989 cC‑31.1 s47
Branches and automated
banking machines
48 A credit union shall report
(a) the
establishment of a branch of its business,
(b) the
relocation of any of its branches, or
(c) the
establishment of an automated banking machine
in writing to the Corporation forthwith after the decision
to that effect has been made by its board.
1989 cC‑31.1
s48;1998 c12 s5
General Related Party
Provisions
Related party and
associated transactions generally
49(1) Except to the extent, if any, permitted by or
under a related party provision, a credit union or its subsidiary shall not
directly or indirectly enter into any transaction with a party related to that
credit union.
(2) Except
to the extent, if any, permitted by or under a related party provision, a party
related to a credit union shall not directly or indirectly enter into any
transaction with the credit union or any of its subsidiaries.
(3) A
credit union or its subsidiary shall not directly or indirectly enter into any
transaction with any person who ceased to be a party related to that credit
union during the previous 12 months which, if that person were still a related
party, would require the prior authorization of the credit union’s board, and
such a former related party shall not directly or indirectly enter into such a
transaction with the credit union or a subsidiary, unless the transaction
(a) has
been authorized by the board of the credit union, and
(b) is
at fair market rate.
(4) For
the purposes of subsections (1) to (3), a transaction is entered into if an
existing transaction, including one entered into before November 1, 1989, is
modified, added to, extended or renewed.
(5) Where
a credit union or a subsidiary is permitted by or under a related party
provision to enter into a transaction with a related party, that related party
may enter into that transaction with that corporation.
(6) Where
a transaction is required by or under a related party provision or subsection
(3) to be at fair market rate, that requirement is satisfied, except where the
transaction is between a credit union and a subsidiary or between subsidiaries
of a credit union, if the transaction is at a rate and on terms that exceed or
do not exceed fair market rate, as the case may be, if that rate and those
terms are more financially advantageous to the credit union or subsidiary than
actual fair market rate.
(7) The onus is on a related party or former
related party and the credit union or subsidiary to prove, with reference to
any related party provision that requires proof of fair market rate or to
subsection (3), that the transaction in question is at or exceeds or does not
exceed, as the case may be, fair market rate.
1989 cC‑31.1 s49
Personal information
49.1(1) In
this section, “personal information” means personal information as defined in the
Personal Information Protection Act other than business contact
information to which that Act does not apply by virtue of section 4(3)(d) of
that Act.
(2) For the purposes of complying with
related party provisions or any regulations made under this Act respecting
related parties, a credit union may collect and use personal information about
persons who are related parties without obtaining their consent.
(3) Persons
who are not related parties shall provide personal information as is necessary
for the credit union to comply with related party provisions or any regulations
made under this Act respecting related parties.
2003 cP‑6.5 s67
Disclosure and use of
confidential information by related parties
50(1) A party related to a credit union shall not enter
into a transaction if the party knows or ought reasonably to know that, in
respect of the transaction, the party would make use of information that is
confidential to the credit union or any subsidiary in order directly or
indirectly to obtain a benefit or advantage wholly or primarily for the party
or any person other than the credit union or subsidiary.
(2) Subject
to section 77, a related party who is or is about to be a party to a related
party transaction for which the authorization of the credit union’s board is or
will be required shall disclose in writing to the credit union the nature of
the related party’s interest in that transaction or proposed transaction
forthwith after becoming aware of the facts that bring the related party within
the application of this subsection.
(3) A
former related party referred to in section 49(3) who is or is about to be a
party to any transaction with the credit union or its subsidiary referred to in
that subsection shall disclose in writing to the credit union the nature of the
former related party’s interest in that transaction or proposed transaction
forthwith after becoming aware of the facts that bring the former related party
within the application of this subsection.
(4) The credit union’s board shall ensure that a
disclosure under subsection (2) or (3) is entered in the minutes of the first
board meeting occurring after the making of the disclosure.
1989 cC‑31.1 s50
General exceptions to
related party provision prohibitions
51(1) A credit union or its subsidiary may, if the
board of the credit union has previously authorized the transaction,
(a) enter
into a written contract with a related party for the provision of management
services to or by the credit union or subsidiary if it is reasonable that the credit
union or the subsidiary obtain or supply the services, and so long as the
consideration is at fair market rate,
(b) enter
into a written lease of personal property with a related party for the use of
the credit union or subsidiary in carrying on its business or affairs at fair
market rate, so long as the term of the lease and of any potential renewals of
the term under the lease does not exceed 5 years,
(c) enter
into a written contract with a related party for pension and benefit plans and
other reasonable commitments incidental to the employment of officers and
employees of the credit union or subsidiary,
(d) subject
to section 65, enter into a contract of employment with a director, officer or
prospective officer of the credit union or of any of its subsidiaries,
(e) enter
into a written contract with a related party for the purchase at fair market
rate of goods or services, other than management services, required by the
credit union or subsidiary in carrying on its business or affairs, so long as
there is appropriate documentation evidencing the consideration and the term of
the contract and of any potential renewals of the term under the contract does
not exceed 5 years, and
(f) enter
into any other related party transaction, not otherwise specified in this Act,
that is prescribed as requiring prior board authorization.
(2) Notwithstanding
anything in subsection (1), a credit union or a subsidiary may, without the
prior authorization of the board of the credit union unless the bylaws require it,
(a) enter
into a contract of employment with a related party who is not a director,
officer or prospective officer of the credit union or of any of its
subsidiaries,
(b) enter
into a transaction with a related party at fair market rate for the sale of
goods or the provision of services that are not otherwise provided for by a
related party provision, and
(c) enter
into any other related party transaction, not otherwise specified in this Act,
(i) that does not cause the expenditures by that corporation in all
transactions between it and all related parties during any fiscal year of the
credit union to exceed the amount approved by the Corporation, on application
to it by the credit union, in relation to that corporation for that fiscal
year, or
(ii) that is prescribed as not requiring prior board authorization.
(3) In this section, “prospective officer” means a
person referred to in section 2(5)(a).
RSA 2000 cC‑32
s51;2003 c19 s15
Related party exemptions
by Corporation
52(1) On written application being made to the
Corporation before a transaction, with a copy being contemporaneously provided
to the Minister, the Corporation may give its prior approval to a credit
union’s or its subsidiary’s entering into a related party transaction or to a
class of related party transactions that would otherwise be prohibited or
restricted by this Act or the regulations if in the Corporation’s opinion the
transaction or class of transactions is necessary or beneficial to the well‑being
of the credit union and is not prejudicial to the interests of its members or
customers.
(2) Where the Corporation is satisfied that a
subsidiary or affiliate of a credit union functions wholly or primarily for the
purpose of providing a service, other than a financial service, to the credit
union or its subsidiary, the Corporation may approve an application by that
credit union for the exemption of the subsidiary or affiliate from the status
of related party.
1989 cC‑31.1 s52
Professional advisors
and related party transactions
53(1) A professional advisor of a credit union who in
the professional advisor’s capacity as such becomes aware of a contravention of
a related party provision or of the terms and conditions of an approval given
in relation to a related party provision shall forthwith ensure that the credit
union’s board and auditor are or become aware of the contravention.
(2) The
auditor of a credit union shall forthwith report to the board of the credit
union and to the Minister any contravention of a related party provision of
which the auditor is notified or otherwise becomes aware.
(3) Nothing
in this section abrogates any privilege existing between a solicitor and
client.
(4) A person who in good faith makes a report under
this section is not liable in any civil action arising from the report.
1989 cC‑31.1 s53
Related party
transaction procedures
54 Unless otherwise prescribed, a credit union
shall have written procedures, approved by resolution of the board, to be
followed by the credit union and its directors, officers and employees to
ensure compliance with related party provisions.
1989 cC‑31.1 s54
Part 5
General Meetings and Membership
Division 1
General Meetings
Annual general meetings
55 The board shall call the annual general meeting
of a credit union, to be held within 5 months after the end of each fiscal
year.
1989 cC‑31.1 s55
Special general meetings
56(1) The board may at any time call a special
general meeting of the credit union, and shall do so on receiving a written
request to that effect signed
(a) by
or on behalf of the audit committee,
(b) in
the case of a large credit union, by at least the greater of
(i) 100 members, and
(ii) 1% of the total membership as at the date the request is
received,
or
(c) in
the case of a small credit union, by at least the greater of
(i) 10 members, and
(ii) 10% of that membership.
(2) A
request referred to in subsection (1) must state the business to be transacted
at the proposed meeting.
(3) If
the board does not, within 30 days after receiving the request, call a special
general meeting, any member who signed the request or the audit committee, as
the case may be, may call the meeting.
(4) The
only business that may be discussed at a meeting called on the request or under
subsection (3) is
(a) business
specified in the request, and
(b) business
that is required by this Act to be dealt with at the general meeting occurring
next after the occurrence of a specific event.
(5) The credit union may by ordinary resolution
reimburse members for the expenses reasonably incurred by them in requesting,
calling and holding the meeting.
1989 cC‑31.1 s56
Regionalization of
meetings
57(1) A credit union may by bylaw divide the
territory in Alberta in which it carries on business and has members into
regions for the purpose of holding separate general meetings in each region for
the members who reside or have accounts in that region instead of holding one
general meeting for all its members.
(2) Subject
to this section, where a bylaw under subsection (1) is in force, the provisions
of this Part and any other law applicable to general meetings apply to regional
meetings held under this section.
(3) A
resolution presented at regional meetings is passed by the credit union only if
the resolution
(a) is
presented at regional meetings covering all the territory referred to in
subsection (1), and
(b) receives
the approval, over all the regional meetings taken as a whole, of such
aggregate majority of the aggregate votes validly cast at all the regional
meetings as would suffice to carry the resolution at a single general meeting
of the whole credit union.
(4) The bylaws must provide for the procedures, if
any, specific to regional meetings that must be followed.
1989 cC‑31.1 s57
Notice of general
meetings
58(1) Subject to this section and section 62, a
credit union shall give at least 10 and not more than 40 days’ notice of a
general meeting to every member, specifying the date, time and place at which
it is to be held and, where applicable, specifying the intention to propose a
special resolution.
(2) Notice
of a general meeting at which there is to be transacted any business other than
business that this Act requires to be transacted at an annual general meeting
or the reappointment of the incumbent auditor, must state
(a) the
nature of that business in sufficient detail to enable the members to form a
reasoned judgment on the business,
(b) where
a special resolution is to be submitted to the meeting, the text of it, and
(c) where
the voluntary dissolution or liquidation and dissolution of the credit union is
to be proposed, the full terms and conditions on which it is proposed to take
place.
(3) Notice
of a meeting to be held pursuant to the adjournment of a general meeting must
be given under this section except where
(a) the
general meeting is adjourned by one or more adjournments for an aggregate of 40
days or less,
(b) notice
of the date, time and place of the reassembled meeting is given by announcement
at the time of the adjournment, and
(c) the
bylaws do not require notice to be given under this section.
(4) The proceedings and the business transacted at
a general meeting are not invalidated by reason only that a member did not
receive notice of the meeting.
1989 cC‑31.1 s58
Quorum
59(1) Subject to subsection (4), the quorum at a
general meeting is the lesser of
(a) 50
members, and
(b) 10%
of the number of members entitled to vote at that meeting, with a minimum of
10,
or such higher number
or percentage or combination of number and percentage as is specified in the
credit union’s bylaws.
(2) Unless
the bylaws otherwise provide, where a quorum is present at the opening of a
general meeting, the members present may proceed with the business of the
meeting notwithstanding that a quorum is not present throughout the meeting.
(3) Subject
to subsection (4), where a quorum is not present at the opening of a general
meeting, the members present may adjourn the meeting but may not transact any
other business.
(4) If the credit union has received the prior
written approval of the Minister (whether before or after the adjourned
meeting) to hold a reassembled meeting held pursuant to an adjournment under
subsection (3) with the reduced quorum specified by the Minister, the members
present may proceed at that meeting with that reduced quorum, for which purpose
subsection (2) applies.
1989 cC‑31.1
s59;1994 c12 s3
Voting at general
meetings
60(1) This section applies to voting at general
meetings and voting with respect to elections referred to in subsection (7).
(2) Subject
to subsection (6), only members are entitled to vote.
(3) Subject
to this section and the bylaws referred to in subsection (4), each member has
one vote on any question that may be voted on.
(4) The
bylaws must
(a) specify
what constitutes a spoiled or invalid vote,
(b) specify
the number of votes that may be cast, and the basis for voting, by holders of
joint membership,
(c) set
out the basis for and the manner of voting by designated representatives, and
(d) contain
a prohibition against or restrictions on voting by all or some of the members
who are minors.
(5) A
member may not vote by proxy.
(6) The
rights of a member entitled to have a designated representative may be
exercised by that representative, and a designated representative who is a
member may cast, in addition to that representative’s own membership vote and
in accordance with the bylaws, a representative vote.
(7) Subject
to subsection (6), a member may cast the member’s vote only if the member
attends the general meeting, except that a credit union may by bylaw provide
for voting by members with respect to elections of directors and officers other
than by personal attendance at general meetings.
(8) A member at a general meeting may demand a vote
by ballot before or on the declaration of the result of a vote by show of
hands, and the result of the vote by ballot is the decision of the members.
1989 cC‑31.1 s60
Division 2
Membership
Qualifications and
restrictions
61(1) A person is not qualified to be or to remain a
member unless the person holds at least the minimum number of common shares
issued by the credit union that is required by the bylaws.
(2) For
the purpose of determining all matters respecting membership, a partnership or
other unincorporated association of persons is deemed to be a corporation.
(3) A
credit union may not be a member of another credit union.
(4) The
membership of a credit union must consist wholly or substantially of
individuals.
(5) Subject to this Act, a related party may be a
member so long as the related party is given no rights or privileges arising
from membership that are not held by the general membership, but no subsidiary
or affiliate may be a member.
1989 cC‑31.1
s61;1994 c12 s4;1998 c12 s6
Service of notices and
documents on members
62(1) A notice or other document required by this Act
or the regulations or the bylaws of a credit union to be provided to a member
is sufficiently served, for the purposes of this Act, only if and to the extent
that this section is complied with.
(2) The
document may be
(a) served
personally on the member or, if the member is a corporation, partnership or
other firm or unincorporated association of persons, on a director, partner,
officer or designated representative thereof or any other member of the governing
body thereof, however called,
(b) sent
by mail addressed to the member at the member’s latest address as shown in the
records of the credit union,
(c) delivered,
addressed to the member, to the member’s residential address, in the case of an
individual, and its registered office in the case of a corporation, or
(d) in
the case of a credit union with a bond of association that has or has the use
of a receptacle for the purpose of providing documents to the member and whose
bylaws so permit, deposited in that receptacle.
(3) If
a credit union’s bylaws so permit, a notice may be
(a) advertised
in prominent display notices in newspapers circulated in all the territory
served by the credit union, and
(b) posted
in places that are prominent and accessible to members and are designated in
the bylaws.
(4) A
credit union that has a bond of association such that a notice posted on notice
boards in specific premises is likely to be seen by all or a substantial
majority of the members may, if its bylaws so permit, post the notice on those
notice boards, whereupon the credit union shall keep it there for the duration
of its currency.
(5) Compliance
with subsection (4) is sufficient service in respect of members who might
reasonably be expected by the credit union to have adequate opportunity to
examine the notice, but the credit union shall serve the notice by another
method on all other members.
(6) If
a credit union sends a notice to a member in accordance with subsection (2)(b)
or sends it for delivery in accordance with subsection (2)(c) and the notice is
returned because the member cannot be found, the credit union shall make
reasonable efforts to locate the member and, if afterwards the member still
cannot be found, the credit union is not required to provide any further
notices to the member until the member informs the credit union in writing of
the member’s new address.
(7) Where
a credit union is required to provide a document to its members with a notice
of a general meeting and it inserts the notice of the meeting in a newspaper
under subsection (3), it may effect service of the document
(a) by
giving information about the document in the notices given under subsection
(3)(a) and (b), including an adequate description of the nature of the
document, and
(b) by providing a copy of the document free of
charge to any member who requests it.
1989 cC‑31.1 s62
Part 6
Directors, Officers, Employees
and Committees
Division 1
Constitutional Affairs
Number of directors
63 A credit union shall have a board of directors
consisting of at least 5 directors.
1989 cC‑31.1 s63
Election of directors
64(1) Subject to bylaws under section 60(7), the
election of directors of a credit union must take place at its annual general
meeting unless, in a particular case, a director is appointed or elected to
fill a vacancy in another manner provided for by the bylaws.
(2) Subject
to this Act, a credit union may by bylaw divide the membership of the credit
union into divisions for the purpose of enabling all or a specified number of
the directors to be elected only by members comprising those divisions, and any
such bylaw must provide for
(a) the
description of each division,
(b) the
number of the directors to be elected by each division, and
(c) any procedures that must be followed in the
election of directors under the bylaw.
1989 cC‑31.1 s64
Qualifications of
directors
65(1) A person is not qualified to become, and shall
not act or continue to act as, nor permit the person to be elected or appointed
as, a director of a credit union, and the credit union shall not knowingly
permit any of those acts, unless the person satisfies the qualifications
specified and referred to in this section.
(2) A
person is not qualified to be a director of a credit union
(a) unless
the person is
(i) an individual of adult age,
(ii) a member or a designated representative, and
(iii) a Canadian citizen or a person who has been lawfully admitted
into Canada for permanent residence;
(b) if
the person has the status of a bankrupt;
(c) subject
to subsection (5), if the person is, or within the 3‑year period
immediately preceding the person’s election or appointment to the board was, an
employee of any body corporate;
(d) if
the person is a professional advisor to the credit union;
(e) subject
to subsection (5), if the person is a director or officer of another credit
union or of the Corporation;
(f) if
the person is employed in the public service of Alberta or by a Provincial
agency within the meaning of the Financial
Administration Act and to which that Act applies, whether under a contract
of service or a contract for services, whose substantive duties are directly
concerned with the business or affairs of credit unions or of Central;
(g) if,
within the immediately preceding 5 years, the person has been convicted of
(i) an indictable offence that is of a kind that is related to the
qualifications, functions or duties of a corporate director, or
(ii) an offence against this Act,
and either the time for
making an appeal has expired without the appeal’s having been made or the
appeal has been finally disposed of by the courts or abandoned;
(h) if
the person has a loan from that credit union in respect of which the repayment
of principal or interest is in arrears for the prescribed period;
(i) if
the person is a dependent adult as defined in the Dependent Adults Act or is the subject of a certificate of
incapacity under that Act;
(j) if
the person is a formal patient as defined in the Mental Health Act;
(k) if
the person has been found to be a person of unsound mind by a court elsewhere
than in Alberta;
(l) if
the person is disqualified by, or unless the person satisfies any other
qualification requirements of, the bylaws.
(3) A
person is not qualified to remain a director if the person fails without good
cause to attend the minimum number of board meetings that the person is
required by the bylaws to attend.
(4) Three‑quarters
of the directors must at all times be ordinarily resident in Alberta.
(5) The Minister may approve an exemption from the
application of subsection (2)(c) and (e) in respect of a person’s employment
with, or a person’s service as a director or officer of, the Corporation.
1989 cC‑31.1
s65;1994 c12 s5
Board meetings
66(1) A credit union shall ensure that a meeting of
the board is held within 30 days after each annual general meeting.
(2) A
credit union shall, on a written request signed
(a) by
at least 1/4 of the directors, or
(b) by
or on behalf of the audit committee,
ensure that a meeting
of the board is held within 10 days after the request.
(3) Notwithstanding
any other law, the bylaws may provide that
(a) a
director may participate in a board meeting, or
(b) a
board meeting may be held,
by means of telephone or other communication facilities
that permit all persons participating in the meeting to hear each other, and,
for the purposes of this Act, the directors participating by those means are
deemed to be present at a board meeting.
1989 cC‑31.1 s66
Duties of board
67(1) Subject to this Act and the regulations and the
bylaws of a credit union, the board is responsible for the general management
of the business and affairs of the credit union.
(2) The
board may appoint from among the directors an executive committee consisting of
not less than 3 directors.
(3) Subject to this Act, the board may delegate any
of its powers, duties or functions under this Act or the regulations in
accordance with a prescribed authorization.
1989 cC‑31.1 s67
Validity of acts
68(1) An act of a director or officer of a credit union
is valid notwithstanding an irregularity in the director’s or officer’s
election or appointment or a defect in the director’s or officer’s
qualification.
(2) An act of the credit union’s board is valid
notwithstanding non‑compliance with section 65(4).
1989 cC‑31.1 s68
Notice of change of
directors
69(1) Within 10 days after a change in the
composition of the board of a credit union occurs, the credit union shall
provide to the Minister and the Corporation a notice setting out the change in
directors.
(2) The
Minister shall register the notice of the change.
(3) Subsection (1) does not apply to the extent
that the change in directors is reflected in the annual return registered under
section 41.
1989 cC‑31.1 s69
Service of notices and
documents on directors
70 A notice or other document required by this Act
or the regulations or the bylaws of a credit union to be provided to a director
of a credit union in the director’s capacity as such is sufficiently served,
for the purposes of this Act, only if and to the extent that the mode of
service referred to in section 62(2) or (4) is complied with, for which purpose
section 62(5) applies.
1989 cC‑31.1 s70
Remuneration of
directors and non-employee officers
71(1) In this section, “officers” means officers of a
corporation who are not employees of it.
(2) A
credit union shall make bylaws with respect to the provision of remuneration by
it to its directors and officers.
(3) Subject
to the bylaws, a credit union may provide remuneration to its directors and
officers.
(4) A credit union shall not provide any
perquisite, benefit or advantage to a director or officer of another credit
union or its subsidiary that is not enjoyed by or available to the members of
the first‑mentioned credit union generally or a substantial proportion of
its membership.
RSA 2000 cC‑32
s71;2003 c19 s16
Division 2
Duties and Liabilities of Directors,
Officers and Employees
Application
72(1) This Division does not operate so as to limit
the duties and liabilities that a director, officer or employee of a
corporation may have under any other law.
(2) No provision in a contract or the articles or
the bylaws or a resolution of a credit union relieves a director or officer
from the duty to act in accordance with this Act and the regulations or
relieves the Director or officer from liability for a breach of this Act or the
regulations.
1989 cC‑31.1 s72
Duty of care of
directors and officers
73(1) A director or officer of a credit union, in
exercising the director’s or officer’s powers and performing the director’s or
officer’s duties, shall
(a) act
honestly, in good faith and with a view to the best interests of the credit
union as a whole,
(b) exercise
the care, diligence and skill that a reasonably prudent person would exercise
in comparable circumstances, and
(c) comply
with the articles and the bylaws.
(2) In considering whether a particular transaction
or course of action is in the best interests of the credit union as a whole, a
director or officer shall also have due regard to the interests of all
customers who have deposits with it.
1989 cC‑31.1 s73
Liability of directors
74(1) Where the board of a credit union passes a
resolution authorizing
(a) the
provision of any remuneration in contravention of section 71 or the bylaws made
under that section,
(b) the
payment of an indemnity described in section 79 in contravention of that
section,
(c) an
acquisition of common shares in contravention of section 111,
(d) a
payment of a dividend or patronage rebate contrary to section 112(1),
(e) any
illegal act with respect to the payment of compensation to a member, director
or officer the effect of which is to reduce the aggregate or any part of its
members’ equity, or
(f) any
related party transaction that contravenes this Act and involves any payment or
the provision or distribution of property by the credit union,
the directors who
voted for or consented to the resolution are jointly and severally liable to
restore to the credit union any amount so paid and the value of any property so
provided or distributed and not otherwise recovered by the credit union, with
interest at the rate prescribed by the Minister.
(2) A
director who has satisfied a judgment rendered under this section is entitled
to contribution from all other directors who by virtue of subsection (1) are
also liable.
(3) On
an application by the credit union, by a director who is liable under
subsection (1), by a member or by any person who was a customer or creditor of
the credit union at the time of the action complained of, the Court may make an
order, if it considers it equitable to do so,
(a) to
compel a recipient to restore to the credit union any money or other property
that was improperly paid, provided or distributed to the recipient in
connection with any of the circumstances specified in subsection (1)(a) to (f),
(b) to
compel the credit union to return common shares to a person from whom it has
improperly acquired them or to issue common shares to a person whose shares it
has improperly redeemed and cancelled, or
(c) to
make such other provision as it considers fit.
(4) A
director is not liable under this section if
(a) the
director proves that the director did not know and could not reasonably have
known that the facts underlying the act authorized by the resolution were such
as to occasion a contravention of the relevant law, or
(b) the
director relies in good faith on
(i) financial statements of the credit union represented by any of
its officers qualified to make such a representation or in a written report of
its auditor as reflecting fairly the financial condition of the credit union,
or
(ii) the written opinion or report of any of its professional advisors
or officers qualified to give such an opinion or to make such a report.
(5) An action to enforce any liability imposed by
this section may not be commenced after 2 years from the date of the resolution
authorizing the action complained of.
1989 cC‑31.1
s74;1994 c12 s6;1998 c12 s7
Liability of directors
for delegated share acquisitions
75(1) Where the board is authorized to and does
delegate the power pursuant to section 67 to authorize the acquisition of
common shares under section 111 and the delegate acquires common shares on the
credit union’s behalf in contravention of that section, all the directors have
the joint and several liability specified in section 74(1).
(2) Section
74(2) applies with respect to this section.
(3) Section
74(3) applies with respect to this section except that the reference to clauses
(a) to (f) of section 74(1) is deemed deleted.
(4) A
director is not liable under this section if
(a) the
delegation referred to in subsection (1) is established by a resolution of the
board which also establishes policies and procedures designed to ensure that
section 111 is complied with, that the delegate is provided with all the
information needed to make lawful decisions on the acquisitions and that the
delegate provides adequate reporting to the board on such transactions, or
(b) the
delegate relied in good faith on financial statements or an opinion or report
referred to in section 74(4).
(5) An
action to enforce any liability imposed by this section may not be commenced
after 2 years from the acquisition.
(6) A resolution referred to in subsection (4)(a)
expires on the anniversary of its becoming effective unless the board has
previously passed a resolution re‑validating it, and any re‑validating
resolution similarly expires after one year unless so re‑validated.
1994 c12 s7;1998 c12 s8
Reporting by directors
and officers to Minister
76(1) When a director or officer of a credit union
first becomes aware that the credit union has engaged in any illegal activity,
the director or officer shall, within 7 days after first becoming so aware,
report that fact in writing to the Minister.
(2) A person does not contravene subsection (1) if
the person establishes that the fact to be reported has already been reported
in writing to the Minister, or that the Minister is already aware or should
reasonably be aware of the fact.
1989 cC‑31.1 s75
Disclosure of related
party and similar transactions
77(1) This section applies to a director or officer
of a credit union who
(a) is
required to make a disclosure under section 50(2), or
(b) in
relation to a corporation that is or is to be a party to a transaction to which
the credit union or its subsidiary is or will also be a party, whether or not
any other persons are or will be parties to the transaction,
(i) is a director or officer, or
(ii) holds 10% or more of the shares issued by it.
(2) A
director or officer described in subsection (1) shall, forthwith after becoming
aware of the facts that bring the director or officer within the application of
subsection (1), disclose in writing to the credit union in detail, and request
to have entered in the minutes of a credit union board meeting, the nature of
the transaction or the proposed transaction, the nature and extent of the
director’s or officer’s relationship with it or with any corporation referred
to in subsection (1)(b) and the interest of any such corporation in the
transaction or proposed transaction.
(3) The
director or officer shall not
(a) vote
or attempt in any way to influence the voting on any resolution to approve the
transaction or proposed transaction, or
(b) be
present while the subject‑matter of the resolution is being discussed or
the vote is being conducted.
(4) Where
the director or officer complied with subsection (2) and the transaction or
proposed transaction was approved by resolution of the board, was reasonable and
fair to the credit union or the subsidiary at the time it was so approved and
does not contravene a related party provision,
(a) the
contract is neither void nor voidable by reason only of the circumstances
bringing the director or officer within the application of subsection (1), or
by reason only that the director or officer was present at or was counted to
determine the presence of a quorum at any meeting that authorized the contract,
and
(b) if
a profit accrues to the director or officer as a result of the making of the
contract, the director or officer is not liable to account to the credit union
or the subsidiary for that profit by reason only of the circumstances bringing
the director or officer within the application of subsection (1).
(5) If
a person required to comply with this section fails to do so, the Court may, on
the application of the credit union or a member, customer or creditor, set
aside the transaction on any terms it thinks fit.
(6) Nothing in this section entitles any person to
enter into any transaction into which the person is not otherwise legally
entitled to enter.
1989 cC‑31.1 s76
Dissent
78(1) A director or committee member of a credit
union who was present at a board or committee meeting, as the case may be, is
deemed for the purposes of this Act to have consented to any resolution passed
or action taken at the meeting, unless
(a) the
director or committee member requested that the director’s or member’s
abstention or dissent be, or the director’s or member’s abstention or dissent
is, entered in the minutes of the meeting,
(b) the
director or committee member provided the director’s or member’s written
dissent to the secretary of the meeting before the meeting was adjourned,
(c) the
director or committee member sent the director’s or member’s dissent by
registered mail or delivered it to the registered office of the credit union
within 14 days after the meeting was adjourned, or
(d) the
director or committee member otherwise proves that the director or member did
not consent to the resolution or action.
(2) A
director or committee member who voted for a resolution is not entitled to
dissent under subsection (1).
(3) On
receipt of a written dissent, the credit union shall
(a) have
the date, time and place it was received certified on it, and
(b) have it placed and kept with the minutes of
the meeting at which the resolution was passed or the action taken.
1989 cC‑31.1 s77
Indemnification
79(1) Except in respect of an action by or on behalf
of the credit union to procure a judgment in its favour, a credit union may, by
resolution of the board, indemnify a present or former director or officer or a
person who acts or acted at the credit union’s request as a director or officer
of a corporation of which the credit union is or was a shareholder or creditor
(in this section referred to as the “other corporation”) against costs, charges
and expenses, including any amount paid to settle an action or satisfy a
judgment, reasonably incurred by that person with respect to a civil, criminal
or administrative action or proceeding to which that person is made a party by
reason of that person being or having been such a director or officer, but only
in accordance with this section.
(2) Notwithstanding
anything in this section, the credit union may indemnify the person only if
(a) the
person acted honestly, in good faith and, subject to section 73(2), with a view
to the best interests
(i) where applicable, of the other corporation, and
(ii) subject to subclause (i), of the credit union as a whole,
and
(b) in
the case of a criminal or administrative action or proceeding, the person had
reasonable grounds for believing that the conduct was lawful.
(3) Notwithstanding
anything in this section except subsection (2), the person is entitled to
indemnity from the credit union in respect of all costs, charges and expenses
reasonably incurred by the person with respect to the defence of any civil,
criminal or administrative action or proceeding to which the person is made a
party by reason of the person being or having been a director or officer
referred to in subsection (1) if the person was substantially successful on the
merits in the person’s defence of the action or proceeding and the person is
fairly and reasonably entitled to indemnity.
(4) A
credit union shall not purchase or maintain insurance for the benefit of any
person acting in the capacity referred to in subsection (1) against any
liability incurred by the person in that capacity if the insurance would cover
liability relating to the person’s failure to comply with subsection (2)(a).
(5) A
credit union or a person referred to in subsection (1) may apply to the Court
for an order approving an indemnity under this section and the Court may so
order and make any further order it thinks fit.
(6) An applicant under subsection (5) shall give
the Minister and the Corporation notice of the application, and the Minister
and the Corporation are entitled to appear and be heard.
1989 cC‑31.1 s78
Division 3
Committees
Appointment, composition
and meetings of committees
80(1) Subject to subsection (2), the board of a
credit union shall by resolution appoint for the credit union
(a) one
or more credit committees, and
(b) either
(i) an audit committee and a finance committee, or
(ii) an audit and finance committee.
(2) The
board of a credit union that does not have an auditor need not appoint an audit
committee, a finance committee or an audit and finance committee but, if it
does not do so, the board itself, without delegation, shall perform the
functions and duties, and has the powers, that that committee would have had if
appointed.
(3) A
finance committee, an audit committee or an audit and finance committee must
(a) consist
exclusively of members, and
(b) include
at least 3 directors.
(4) A
credit committee must consist of at least 3 members.
(5) The
auditor and the internal auditor are entitled to receive notice of and to
attend any meeting of the audit or audit and finance committee.
(6) The
audit, finance or audit and finance committee shall meet at least once in each
quarter of the fiscal year.
(7) Section 66(3) applies in respect of the
relationship between committee members and committee meetings.
1989 cC‑31.1
s79;1998 c12 s9
Functions of finance
committee
81 The finance committee of a credit union shall
perform the following functions:
(a) recommend
to the board the annual budget for the following fiscal year;
(b) consider
the credit union’s business performance for each quarter of the fiscal year
with respect to its annual budget, and report on it to the board;
(c) make
recommendations to the board on the investment procedures referred to in
section 101(2) and the prudent lending standards referred to in section 129;
(d) recommend,
for approval by the board, financial policies relating to the credit union’s
investments and lending;
(e) perform any other duties that are prescribed
by the Minister or assigned to it by a board resolution.
1989 cC‑31.1
s80;1998 c12 s10
General committee
provisions
82(1) Each of the committees is a committee of, and
is responsible to, the board, and shall provide a written report of matters
falling within its functions and duties
(a) to
the annual general meeting, in respect of the previous fiscal year’s business
and affairs, and
(b) to
the board,
(i) at least once a month, in the case of the credit committee, and
(ii) at least once a quarter, in the case of the audit and finance
committees,
in respect of the business
and affairs of the previous period.
(2) Notwithstanding
anything in this Part, the board itself is, without delegation, responsible for
ensuring that the committees perform their respective functions and duties and
may assume to itself any of those functions or duties and exercise any of the
committees’ powers.
(3) The bylaws may provide for the delegation by a
committee to a committee member or officer of any of its powers, duties or
functions, other than those prescribed, but no such delegation relieves a
committee or the board from any duty that it has under this Act or the
regulations.
1989 cC‑31.1
s81;1998 c12 s11
Part 7
Financial Disclosure, Audit
and Examination
Division 1
Financial Disclosure
Provision of financial
statements, etc., to annual general meeting
83(1) At each annual general meeting, the board of a credit
union shall place before the members, in addition to any other information
required by this Act or prescribed to be required,
(a) except
in the case of a credit union that does not have an auditor, the annual
financial statements for the previous fiscal year of the credit union with the
auditor’s report on them, and
(b) in
the case of a credit union that does not have an auditor, the unaudited annual
financial statements for the previous fiscal year of the credit union.
(2) Where,
as a result of the application of section 5, the financial statements required
by subsection (1) would be on a basis that consolidates the financial
statements with those of the credit union’s subsidiaries, subsection (1) shall
be treated as also requiring separate financial statements for the credit
union.
(3) The
annual financial statements must show, as notations to them,
(a) separately
in respect of each corporation, the aggregate amount provided during the
previous fiscal year to all the directors, and all the officers who are not
employees, of the credit union and its subsidiaries
(i) as remuneration, and
(ii) separately, as reimbursement or allowance for expenses incurred
on the business and affairs of the credit union and its subsidiaries,
(a.1) the
arithmetic mean amount of remuneration paid to the directors of the credit
union during the previous fiscal year,
(a.2) the
highest and lowest amounts of remuneration paid to directors of the credit
union during the previous fiscal year,
(b) the
aggregate amounts of loans referred to in section 134 in respect of which the
repayment of principal or interest, as of the end of the previous fiscal year,
is overdue by 45 days or more,
(c) the
amount of loans outstanding to each subsidiary and affiliate at the end of the
previous fiscal year,
(d) the
amount of guarantees outstanding in favour of each subsidiary and affiliate at
that date, and
(e) any
other information that is prescribed.
(4) At least at every 5th annual general meeting,
the board of a credit union shall place before its members a resolution in the
prescribed form respecting the disclosure of the remuneration of the credit
union’s executive managers.
RSA 2000 cC‑32
s83;2003 c19 s17
Issue and publication of
financial statements
84(1) Subject to sections 83 and 85(2), a credit
union shall not issue, publish or circulate copies of the annual financial
statements referred to in section 83 unless those financial statements
(a) have
previously been approved specifically by the board and the board’s approval is
evidenced by the signatures of 2 or more directors on the statements, and
(b) except
in the case of a credit union that does not have an auditor, are accompanied
with the auditor’s report on them.
(2) Subject
to subsection (1), where a member so requests, a credit union shall provide to
the member a summary or, if the member specifically so requests or if the
credit union so desires, a copy
(a) free
of charge, of its most recent annual financial statements, and
(b) on
the payment of a reasonable fee, of previous annual financial statements
of the credit union, with the accompanying auditor’s report
where applicable.
1989 cC‑31.1
s83;1998 c12 s13
Reporting to Minister
and Corporation
85(1) A credit union shall provide
(a) such
periodic reports,
(b) on
or before such dates, and
(c) to
whichever of the Minister, the Corporation or Central,
as are prescribed by
the Minister.
(2) A
credit union shall, within 3 months after the end of each fiscal year, provide
to the Minister and to the Corporation, with respect to that year,
