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Credit Unions and Caisses Populaires Act, 1994

S.O. 1994, CHAPTER 11

Consolidation Period: From August 20, 2007 to the e-Laws currency date.

Note: October 1, 2009 has been named by proclamation as the day on which the amendments made by 2007, c. 7, Sched. 7, ss. 1-60, 63-68, 70-137, 138 (1)-(3), 139-177 come into force.

Note: October 1, 2010 has been named by proclamation as the day on which the amendments made by 2007, c. 7, Sched. 7, ss. 61, 62, 69 come into force.

Note: October 1, 2010 has been named by proclamation as the day on which the amendments made by 1999, c. 12, Sched. I, s. 2 (6) come into force.

Last amendment: 2007, c. 7, Sched. 7, ss. 1-177.

SKIP TABLE OF CONTENTS

CONTENTS

PART I
INTERPRETATION

Definitions

1.  In this Act,

“affiliate” means an affiliated body corporate within the meaning of section 5; (“membre du même groupe”)

“articles of incorporation” or “articles” means the original or restated articles of incorporation, articles of amalgamation, articles of amendment, memorandum of association, a special Act or other instrument by which a credit union is incorporated and includes any amendment thereto; (“statuts constitutifs” ou “statuts”)

“association of credit unions” means a body corporate incorporated by ten or more credit unions to act as their stabilization authority; (“association de caisses”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “association of credit unions” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (1). See: 2007, c. 7, Sched. 7, ss. 1 (1), 192 (2).

“auditor” means a person who is a public accountant licensed under the Public Accounting Act, 2004 and includes a partnership of auditors or a firm of accountants; (“vérificateur”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “auditor” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (1). See: 2007, c. 7, Sched. 7, ss. 1 (1), 192 (2).

“board” means, with respect to a credit union, its board of directors; (“conseil”)

“body corporate” means any body corporate with or without share capital and whether or not it is a corporation to which this Act applies; (“personne morale”)

“borrow” does not include the taking of deposits; (“emprunter”)

“by-law” means a by-law approved under this Act, and includes any amendment or revocation of a by-law approved under this Act; (“règlement administratif”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “by-law” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (1). See: 2007, c. 7, Sched. 7, ss. 1 (1), 192 (2).

“Commission” means the Financial Services Commission of Ontario established under the Financial Services Commission of Ontario Act, 1997; (“Commission”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “Commission” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (1). See: 2007, c. 7, Sched. 7, ss. 1 (1), 192 (2).

“Corporation” means the Deposit Insurance Corporation of Ontario; (“Société”)

“court”, except where the context indicates otherwise, means the Superior Court of Justice; (“tribunal”)

“credit union” means a corporation incorporated as a credit union or caisse populaire under this Act or a predecessor of this Act; (“caisse”, “caisse populaire”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “credit union” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (2) and the following substituted:

“credit union” means a corporation incorporated or continued as a credit union or caisse populaire under this Act or a predecessor of this Act; (“caisse”, “caisse populaire”)

See: 2007, c. 7, Sched. 7, ss. 1 (2), 192 (2).

“debt obligation” means a bond, debenture, note or other evidence of indebtedness of an entity, whether secured or unsecured; (“titre de créance”)

“deposit” includes money deposited in a credit union under a federal or provincial registered savings plan or fund; (“dépôt”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “deposit” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (3) and the following substituted:

“deposit” includes money deposited with a credit union under a federal or provincial registered savings plan or fund; (“dépôt”)

See: 2007, c. 7, Sched. 7, ss. 1 (3), 192 (2).

“deposit insurer” means the Deposit Insurance Corporation of Ontario; (“organisme d’assurance-dépôts”)

“depositor” means a person with funds on deposit with a credit union; (“déposant”)

“entity” means a body corporate, trust, partnership, fund, an unincorporated organization, Her Majesty in right of Canada or of a province, an agency of Her Majesty in either of such rights and the government of a foreign country or any political subdivision thereof and any agency thereof; (“entité”)

“financial institution” means,

(a) a bank,

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (a) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (4) and the following substituted:

(a) a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada),

See: 2007, c. 7, Sched. 7, ss. 1 (4), 192 (2).

(b) a corporation registered under the Insurance Act or the Investment Contracts Act,

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (b) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (4) and the following substituted:

(b) an insurer licensed under the Insurance Act,

See: 2007, c. 7, Sched. 7, ss. 1 (4), 192 (2).

(c) a corporation registered under the Loan and Trust Corporations Act,

(d) an entity that is,

(i) incorporated or formed by or under an Act of the Parliament of Canada or of the legislature of a province, and

(ii) primarily engaged in dealing in securities, including portfolio management and investment counselling,

(e) a credit union, and

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (e) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (5) by striking out “and” at the end. See: 2007, c. 7, Sched. 7, ss. 1 (5), 192 (2).

(f) a league; (“institution financière”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “financial institution” is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (5) by adding the following clauses:

(g) a retail association as defined under the Cooperative Credit Associations Act (Canada), and

(h) such other entities or classes of entities as may be prescribed;

See: 2007, c. 7, Sched. 7, ss. 1 (5), 192 (2).

“financial statement” means a financial statement referred to in subsection 212 (4); (“état financier”)

“firm of accountants” means,

(a) a partnership, the members of which are accountants engaged in the practice of accounting, or

(b) a body corporate that is incorporated by or under an Act of the legislature of a province and engaged in the practice of accounting; (“cabinet de comptables”)

“incorporator” means an individual who signs articles of incorporation; (“fondateur”)

“league” means a corporation incorporated as a credit union league or federation under this Act or a predecessor of this Act; (“fédération”)

“member” means a person who is a member or enrolled as a member of a credit union under this Act, the articles and the by-laws of the credit union governing membership; (“sociétaire”)

“membership share” means an interest in the equity of a credit union that confers the rights referred to in subsection 52(1); (“part sociale”)

“Minister” means the Minister of Finance; (“ministre”)

“officer”, in respect of a credit union, means,

(a) the chair of the board, a vice-chair of the board, the president, a vice-president, the secretary, an assistant secretary, the treasurer, an assistant treasurer and the general manager,

(b) any individual who performs functions for the credit union normally performed by a person mentioned in clause (a), and

(c) any other individual designated as an officer by by-law or by resolution of the directors; (“dirigeant”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “officer” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (6) and the following substituted:

“officer”, in respect of a credit union, means,

(a) the chair of the board required under section 94.2,

(b) the corporate secretary required under subsection 140 (1),

(c) the chief executive officer required under subsection 140 (1), and

(d) any other officer provided for in the by-laws referred to in subsection 140 (1); (“dirigeant”)

See: 2007, c. 7, Sched. 7, ss. 1 (6), 192 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 1 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (7) by adding the following definition:

“patronage share” means a share of a class provided for by the articles of a credit union in accordance with section 53; (“part de ristourne”)

See: 2007, c. 7, Sched. 7, ss. 1 (7), 192 (2).

“personal representative” means a person who stands in place of and represents another person and includes, as the circumstances require, a trustee, an executor, an administrator, a committee, a guardian, a tutor, a curator, an assignee, a receiver, an agent or an attorney of any person, but does not include a delegate; (“représentant personnel”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “personal representative” is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (8) by striking out “a tutor”. See: 2007, c. 7, Sched. 7, ss. 1 (8), 192 (2).

“prescribed” means prescribed by the regulations; (“prescrit”)

“real estate” includes a leasehold interest in real property; (“bien immobilier”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “real estate” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (9). See: 2007, c. 7, Sched. 7, ss. 1 (9), 192 (2).

“regulations” means the regulations made under this Act; (“règlement”)

“regulatory capital” in respect of a credit union, has the meaning given to that expression by the regulations; (“capital réglementaire”)

“related person”, when used to indicate a relationship with any person, means,

(a) a spouse of the person,

(b) any son or daughter of the person, or

(c) any relative of the person or of any person mentioned in clause (a) or (b); (“personne liée”)

“relative” means a relative by blood, marriage or adoption; (“parent”)

“security” means a security as defined under the Securities Act but does not include a deposit with a financial institution or any instrument evidencing the deposit; (“valeur mobilière”)

“share” includes a membership share unless specifically excluded by this Act; (“action”)

“shareholder” means a shareholder as defined in subsection 8 (1); (“actionnaire”)

“special resolution” means a resolution passed by two-thirds or more of the votes cast by or on behalf of the persons who voted in respect of that resolution; (“résolution extraordinaire”)

“spouse” means a spouse as defined under Part III of the Family Law Act; (“conjoint”)

“stabilization authority” means the Corporation and any league or association of credit unions designated by the Corporation as a stabilization authority; (“organe de stabilisation”)

Note: On a day to be named by proclamation of the Lieutenant Governor, the definition of “stabilization authority” is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 1 (9). See: 2007, c. 7, Sched. 7, ss. 1 (9), 192 (2).

“subordinated indebtedness” means an instrument evidencing an indebtedness of a credit union that, by its terms, provides that the indebtedness will, in the event of the insolvency or winding up of the credit union, be subordinate in right of payment to all deposit liabilities of the credit union and all other liabilities of the credit union except those that, by their terms, rank equally with or are subordinate to the indebtedness; (“titre secondaire”)

“Superintendent” means the Superintendent of Financial Services appointed under the Financial Services Commission of Ontario Act, 1997; (“surintendant”)

“Tribunal” means the Financial Services Tribunal established under the Financial Services Commission of Ontario Act, 1997. (“Tribunal”) 1994, c. 11, s. 1; 1997, c. 28, s. 52; 1999, c. 6, s. 19 (1, 2); 2002, c. 18, Sched. H, s. 3 (1); 2004; c. 8, ss. 46, 47 (1); 2005, c. 5, s. 18 (1, 2); 2006, c. 19, Sched. C, s. 1 (1).

Joint shareholders

2.  (1)  For the purposes of this Act, two or more persons holding the same share or shares jointly are considered as one member or shareholder. 1994, c. 11, s. 2 (1).

Exception

(2)  Despite subsection (1), two or more persons jointly holding enough membership shares to entitle each of them to be a member in his or her own right are all considered as separate members. 1994, c. 11, s. 2 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 2 by striking out “his or her” and substituting “their”. See: 2007, c. 7, Sched. 7, ss. 2, 192 (2).

Subsidiary

3.  For the purposes of this Act, a body corporate is a subsidiary of another body corporate if,

(a) it is controlled by,

(i) that other,

(ii) that other and one or more bodies corporate each of which is controlled by that other, or

(iii) two or more bodies corporate that are that other’s subsidiary; or

(b) it is a subsidiary of a body corporate that is that other’s subsidiary. 1994, c. 11, s. 3.

Holding body corporate

4.  For the purposes of this Act, a body corporate is another’s holding body corporate if that other is its subsidiary. 1994, c. 11, s. 4.

Affiliation

5.  (1)  For the purposes of this Act, one body corporate is affiliated with another body corporate if one of them is the subsidiary of the other or both are subsidiaries of the same body corporate or each of them is controlled by the same person. 1994, c. 11, s. 5 (1).

Affiliate by order

(2)  On application in writing by a credit union, the Superintendent may, by order and on the terms specified in the order, deem a corporate body named in the order to be an affiliate for the purposes of this Act or for the purpose of specific provisions of this Act. 1994, c. 11, s. 5 (2); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 3 (1) by striking out “Superintendent” and substituting “Corporation”. See: 2007, c. 7, Sched. 7, ss. 3 (1), 192 (2).

Revocation of order

(3)  The Superintendent may revoke the order if he or she believes that the credit union has failed to comply with a term set out in the order or that it is no longer appropriate to deem the corporate body in respect of which the order is made to be an affiliate. 1994, c. 11, s. 5 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 3 (2) and the following substituted:

Revocation of order

(3)  The Corporation may, by order, revoke an order under subsection (2) if the Corporation believes that the credit union has failed to comply with a term set out in the order under subsection (2) or that it is no longer appropriate to deem the corporate body in respect of which the order under subsection (2) was made to be an affiliate. 2007, c. 7, Sched. 7, s. 3 (2).

Procedural rules

(4)  Section 240.1 applies with respect to an order under this section. 2007, c. 7, Sched. 7, s. 3 (2).

See: 2007, c. 7, Sched. 7, ss. 3 (2), 192 (2).

Controlling body corporate

6.  For the purposes of this Act, a body corporate is controlled by another person or by two or more bodies corporate if,

(a) voting securities of the first mentioned body corporate carrying more than 50 per cent of the votes for the election of directors are held, other than by way of security only, by or for the benefit of the other person or by or for the benefit of the other bodies corporate; and

(b) the votes carried by the securities are sufficient, if exercised, to elect a majority of the board of directors of the first-mentioned body corporate. 1994, c. 11, s. 6.

Member

7.  (1)  For the purposes of this Act, a person is a holder of a membership share of a credit union when, according to the membership register of the credit union, the person is the owner of the membership share or is entitled to be entered in the members register of the credit union as the owner of the share. 1994, c. 11, s. 7 (1).

Holder of membership share

(2)  A reference in this Act to the holding of a membership share by or in the name of a person is a reference to the fact that the person is registered or is entitled to be registered in the members register or a similar record of members of the credit union as the holder of the share. 1994, c. 11, s. 7 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 7 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 4 and the following substituted:

Member

7.  (1)  For the purposes of this Act, a person is a holder of a membership share of a credit union when, according to the register under section 230, the person is the owner of the membership share or is entitled to be entered in the register as the owner of the share. 2007, c. 7, Sched. 7, s. 4.

Holder of membership share

(2)  A reference in this Act to the holding of a membership share by or in the name of a person is a reference to the fact that the person is registered or is entitled to be registered in the register under section 230 as the holder of the share. 2007, c. 7, Sched. 7, s. 4.

See: 2007, c. 7, Sched. 7, ss. 4, 192 (2).

Shareholder

8.  (1)  For the purposes of this Act, a person is a shareholder of a body corporate when, according to the securities register of the body corporate, the person is the owner of a share of the body corporate or is entitled to be entered in the securities register or like record of the body corporate as the owner of a share.

Holder of a share

(2)  A reference in this Act to the holding of a share by or in the name of any person is a reference to the fact that the person is registered or is entitled to be registered in the securities register or a similar register of the body corporate as the holder of that share. 1994, c. 11, s. 8.

Note: On a day to be named by proclamation of the Lieutenant Governor, Part II is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 5. See: 2007, c. 7, Sched. 7, ss. 5, 192 (2).

PART II
ADMINISTRATION

Application of Corporations Act

9.  (1)  Repealed: 1997, c. 28, s. 54.

Application of Corporations Act

(2)  The Corporations Act does not apply to credit unions or leagues. 1994, c. 11, s. 9 (2).

Delegation of powers by Minister

10.  The Minister may delegate in writing any of his or her powers under this Act to any employee in the Ministry of Finance or agent of the Ministry. 1994, c. 11, s. 10.

11.  Repealed: 1997, c. 28, s. 55.

PART III
ESTABLISHING A CREDIT UNION

Incorporation

Corporate charter

12.  (1)  The certificate of incorporation, articles of incorporation and the by-laws of a credit union, together with this Act, constitute the charter of the credit union.

Date of incorporation

(2)  A credit union comes into existence on the date set out in the certificate of incorporation. 1994, c. 11, s. 12.

Articles of incorporation

13.  (1)  Twenty or more individuals may incorporate a credit union by signing articles of incorporation and complying with section 15. 1994, c. 11, s. 13 (1).

Restriction

(2)  An individual is disqualified from being an incorporator if he or she,

(a) is less than eighteen years of age;

(b) is of unsound mind and has been so found by a court in Canada or elsewhere; or

(c) has the status of a bankrupt. 1994, c. 11, s. 13 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (c) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 6 and the following substituted:

(c) is an undischarged bankrupt or has been discharged as a bankrupt in the five years preceding the date the application to incorporate the credit union is made under subsection 15 (1).

See: 2007, c. 7, Sched. 7, ss. 6, 192 (2).

Contents of articles

14.  (1)  The articles of incorporation must set out the prescribed information in a form approved by the Superintendent. 1994, c. 11, s. 14 (1); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 7 and the following substituted:

Contents of articles

(1)  The articles of incorporation must set out the prescribed information. 2007, c. 7, Sched. 7, s. 7.

See: 2007, c. 7, Sched. 7, ss. 7, 192 (2).

Same

(2)  The articles may include any provision that is permitted under this Act to be set out in the articles or that could be the subject of a by-law of the credit union. 1994, c. 11, s. 14 (2).

Same

(3)  The articles must set out any restrictions on the business that the credit union may carry on or on the powers that the credit union may exercise. 1994, c. 11, s. 14 (3).

First directors

(4)  The articles must name at least five individuals who hold office as first directors of the credit union. 1994, c. 11, s. 14 (4).

Affidavit

(5)  An affidavit verifying the following matters must accompany the articles:

1. The signature of each incorporator and each first director.

2. The fact that each incorporator and first director meet the criteria for eligibility under subsection 13 (2) and section 91, as applicable, and that each first director is not disqualified to be a director under section 92. 1994, c. 11, s. 14 (5).

Where consent required

(6)  If a person who is not an incorporator is named in the articles as a first director, his or her consent to act as a first director must accompany the articles. 1994, c. 11, s. 14 (6).

Form of consent

(7)  The consent must be in a form approved by the Superintendent. 1994, c. 11, s. 14 (7); 1997, c. 28, s. 53.

Application for incorporation

15.  (1)  An application to incorporate a credit union may be made by sending to the Minister two copies of the proposed articles of incorporation and the proposed by-laws of the credit union and paying the applicable application fee. 1994, c. 11, s. 15 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 8 (1) and the following substituted:

Application for incorporation

(1)  An application to incorporate a credit union may be made by sending to the Superintendent two copies of the proposed articles of incorporation and the proposed by-laws of the credit union and paying the application fee established by the Minister. 2007, c. 7, Sched. 7, s. 8 (1).

See: 2007, c. 7, Sched. 7, ss. 8 (1), 192 (2).

Powers and duties of Superintendent

(2)  The Minister shall direct the Superintendent to inquire into the circumstances, sufficiency and regularity of the articles and by-laws and the Superintendent may do the following before the Minister issues a certificate of incorporation:

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 8 (2) by striking out the portion before paragraph 1 and substituting the following:

Inquiry before incorporation

(2)  The Superintendent shall inquire into the circumstances, sufficiency and regularity of the articles and by-laws and may do any of the following before issuing a certificate of incorporation:

See: 2007, c. 7, Sched. 7, ss. 8 (2), 192 (2).

1. Require the incorporators to provide such additional information as the Superintendent considers relevant to the application.

2. Require any matter set out in the articles or by-laws or in the additional information provided to the Superintendent to be verified under oath.

3. Require the articles or by-laws to be amended if the Superintendent considers that they are inconsistent with this Act or the regulations. 1994, c. 11, s. 15 (2); 1997, c. 28, s. 53.

Certificate of incorporation

16.  (1)  Subject to subsection (2), the Minister shall issue a certificate of incorporation to the incorporators. 1994, c. 11, s. 16 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 9 (1) and the following substituted:

Certificate of incorporation

(1)  Subject to subsection (2), the Superintendent shall issue a certificate of incorporation to the incorporators. 2007, c. 7, Sched. 7, s. 9 (1).

See: 2007, c. 7, Sched. 7, ss. 9 (1), 192 (2).

Grounds for refusing certificate

(2)  The Minister shall not issue a certificate of incorporation if the articles do not meet the requirements of section 14 or 15 or if the incorporators do not satisfy the Minister of the following matters:

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 9 (2) by striking out the portion before paragraph 1 and substituting the following:

Grounds for refusing certificate

(2)  The Superintendent shall not issue a certificate of incorporation if the articles do not meet the requirements of section 14 or 15 or if the incorporators do not satisfy the Superintendent of the following matters:

See: 2007, c. 7, Sched. 7, ss. 9 (2), 192 (2).

1. The plans for the conduct and development of the business of the credit union are feasible and sound.

2. The credit union will be operated in accordance with co-operative principles.

3. The credit union will be operated in such a way that deposits will be safeguarded without the likelihood of a claim against the deposit insurer.

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 3 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 9 (3) and the following substituted:

3. The credit union will be operated in such a way that deposits will be safeguarded without the likelihood of a claim against the Corporation.

See: 2007, c. 7, Sched. 7, ss. 9 (3), 192 (2).

4. The credit union will be operated responsibly by individuals who, by virtue of their character, competence and experience, are suited to operating a financial institution.

5. The incorporation of the credit union will serve the best interests of the co-operative financial system in Ontario. 1994, c. 11, s. 16 (2).

Effect of certificate

17.  (1)  A certificate of incorporation is conclusive proof that the incorporators have complied with all conditions precedent to incorporating a credit union and that the credit union was incorporated under this Act on the date set out in the certificate.

Exception

(2)  Subsection (1) does not apply in a proceeding under section 301. 1994, c. 11, s. 17.

Appeal re refusal of certificate

18.  If the Minister decides, after giving the applicants for incorporation an opportunity to be heard, not to issue a certificate of incorporation, he or she shall notify the incorporators, in writing, and set out the reasons for the decision. 1994, c. 11, s. 18.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 18 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 10 and the following substituted:

Refusal of certificate

18.  If the Superintendent decides, after giving the applicants for incorporation an opportunity to make written submissions, not to issue a certificate of incorporation, he or she shall notify the incorporators, in writing, and set out the reasons for the decision. 2007, c. 7, Sched. 7, s. 10.

See: 2007, c. 7, Sched. 7, ss. 10, 192 (2).

Language and form of name

19.  (1)  The name of a credit union must be in the language and form authorized in the articles and approved by the Superintendent. 1994, c. 11, s. 19 (1); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (1).

Use of “credit union”

(2)  Subject to subsections (3) and (5), the name of a credit union must include the words “credit union” or “caisse populaire”. 1994, c. 11, s. 19 (2).

Use of “caisse populaire”

(3)  Only a corporation incorporated under this Act or a predecessor of this Act that provides financial services to its members and promotes the interests of the French-speaking community in Ontario by providing management and democratic control in French may include “caisse populaire” in its name and all other corporations incorporated under this Act or a predecessor of this Act shall include “credit union” in their names. 1994, c. 11, s. 19 (3).

Use of “Limited”, etc.

(4)  The name of a credit union must have at the end of it one of the following: “Limited”, “Ltd”, “Limitée”, “Ltée”, “incorporated”, “incorporée” or “Inc”. 1994, c. 11, s. 19 (4).

Exception

(5)  Subject to subsection (3), a credit union incorporated under a predecessor of this Act may continue to use the name under which it was incorporated. 1994, c. 11, s. 19 (5).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 19 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 10 and the following substituted:

Language and form of corporate name

19.  (1)  The corporate name of a credit union must be in the language and form authorized in the articles and approved by the Superintendent. 2007, c. 7, Sched. 7, s. 10.

Use of “credit union”

(2)  Subject to subsections (3) and (4), the corporate name of a credit union must include the words “credit union” or “caisse populaire”. 2007, c. 7, Sched. 7, s. 10.

Use of “caisse populaire”

(3)  Only a corporation incorporated under this Act or a predecessor of this Act that provides financial services to its members and promotes the interests of the French-speaking community in Ontario by providing management and democratic control in French may include “caisse populaire” in its corporate name, and all other corporations incorporated under this Act or a predecessor of this Act shall include “credit union” in their corporate names. 2007, c. 7, Sched. 7, s. 10.

Use of “Limited”, etc.

(4)  The corporate name of a credit union must have at the end of it one of the following: “Limited”, “Ltd”, “Limitée”, “Ltée”, “incorporated”, “incorporée” or “Inc”. 2007, c. 7, Sched. 7, s. 10.

See: 2007, c. 7, Sched. 7, ss. 10, 192 (2).

May use other name

19.1  (1)  Subject to subsections (2) and (3), a credit union may carry on business under or identify itself by a name other than its corporate name. 1999, c. 12, Sched. I, s. 2 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 11 and the following substituted:

Use of other name

(1)  A credit union shall not carry on business under or identify itself by a name other than its corporate name unless the Superintendent has approved that name. 2007, c. 7, Sched. 7, s. 11.

See: 2007, c. 7, Sched. 7, ss. 11, 192 (2).

Superintendent may order credit union to not use other name

(2)  Where a credit union is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, after giving the credit union an opportunity to be heard, by order, direct the credit union not to use that other name if the Superintendent is of the opinion that the other name is a name referred to in any of clauses 21 (1) (a) to (g). 1999, c. 12, Sched. I, s. 2 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 11 and the following substituted:

Restriction on approval

(2)  The Superintendent shall not approve a name under subsection (1),

(a) if the name includes “credit union” or “caisse populaire”, unless the name is derived from the credit union’s corporate name; or

(b) if the name would be precluded as a corporate name under section 21. 2007, c. 7, Sched. 7, s. 11.

See: 2007, c. 7, Sched. 7, ss. 11, 192 (2).

Corporate name to be used in all documents

(3)  A credit union shall set out its corporate name in legible characters in all documents that evidence rights or obligations with respect to other parties (including contracts, invoices and negotiable instruments) and that are issued or made by or on behalf of the credit union. 1999, c. 12, Sched. I, s. 2 (2).

Prohibition re names

20.  (1)  A person who carries on business using a name in which “credit union” or “caisse populaire” is used other than in the circumstances set out in section 19 or 19.1 is guilty of an offence. 1999, c. 12, Sched. I, s. 2 (3).

Exception

(2)  Subsection (1) does not apply to the prescribed persons or entities. 1994, c. 11, s. 20 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 20 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 12 and the following substituted:

Prohibition, use of “credit union”, “caisse populaire”

20.  No person, other than a credit union or prescribed person or entity, shall carry on business using a name in which “credit union” or “caisse populaire” is used. 2007, c. 7, Sched. 7, s. 12.

See: 2007, c. 7, Sched. 7, ss. 12, 192 (2).

Restrictions re names

21.  (1)  A credit union may not be incorporated under this Act with a name that,

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 13 (1) by striking out the portion before clause (a) and substituting the following:

Restrictions re corporate names

(1)  A credit union may not be incorporated under this Act with a corporate name that,

See: 2007, c. 7, Sched. 7, ss. 13 (1), 192 (2).

(a) is prohibited under an Act of the Parliament of Canada or a province or territory of Canada;

(b) does not meet the prescribed requirements;

(c) is reserved under section 22 for another credit union;

(d) is the same as or confusingly similar to any existing trade-mark or trade name or corporate name of a body corporate;

(e) is the same as or confusingly similar to the known name under or by which another entity carries on business or is identified;

(f) contains a word or phrase that indicates or suggests that it is incorporated for any object other than one set out in its articles; or

(g) is deceptively misdescriptive. 1994, c. 11, s. 21 (1).

Exception re trade-marks, etc.

(2)  Clause (1) (d) does not apply if the Superintendent is satisfied that,

(a) the trade-mark or trade name is being changed or the body corporate is being dissolved or is changing its corporate name; and

(b) in the case of a corporate name, there is consent to the use of the corporate name. 1994, c. 11, s. 21 (2); 1997, c. 28, s. 53.

Exception for affiliates

(3)  Clauses (1) (d) and (e) do not apply with respect to a credit union that is affiliated with another entity if the Superintendent is satisfied that the entity consents to it having a name substantially similar to the entity’s name. 1994, c. 11, s. 21 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 13 (2) and the following substituted:

Exception for affiliates

(3)  Clauses (1) (d) and (e) do not apply with respect to a credit union that is affiliated with another entity if the Superintendent is satisfied that the entity consents to it having a corporate name substantially similar to the entity’s name. 2007, c. 7, Sched. 7, s. 13 (2).

See: 2007, c. 7, Sched. 7, ss. 13 (2), 192 (2).

Change of name

(4)  If a credit union has acquired a name contrary to subsection (1), the Superintendent may issue a certificate of amendment to the articles changing the name of the credit union. 1994, c. 11, s. 21 (4); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 13 (2) and the following substituted:

Change of corporate name

(4)  If a credit union has acquired a corporate name contrary to subsection (1), the Superintendent may, by order, issue a certificate of amendment to the articles changing the name of the credit union. 2007, c. 7, Sched. 7, s. 13 (2).

See: 2007, c. 7, Sched. 7, ss. 13 (2), 192 (2).

Same

(5)  Before issuing a certificate of amendment, the Superintendent shall give the credit union an opportunity to be heard. 1994, c. 11, s. 21 (5); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 13 (2) and the following substituted:

Procedural rules

(5)  Section 240.1 applies with respect to an order under subsection (4). 2007, c. 7, Sched. 7, s. 13 (2).

See: 2007, c. 7, Sched. 7, ss. 13 (2), 192 (2).

Reserving a name

22.  (1)  A person may reserve a corporate name for a period of ninety days or less upon making an application to the Superintendent in a form approved by the Superintendent and paying the fee established by the Minister. 1994, c. 11, s. 22 (1); 1997, c. 19, s. 5 (1); 1997, c. 28, s. 53.

Effect of reservation

(2)  During the period that the name is reserved, a body corporate is not entitled to acquire the name or a similar name without the prior written consent of the person for whose use and benefit the name is reserved. 1994, c. 11, s. 22 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 22 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 14 and the following substituted:

Reserving a corporate name

22.  (1)  A person may reserve a corporate name for a period of up to 90 days by making an application to the Superintendent and paying the fee established by the Minister. 2007, c. 7, Sched. 7, s. 14.

Effect of reservation

(2)  During the period that the corporate name is reserved, a body corporate is not entitled to acquire the name or a similar name without the written consent of the person for whose use and benefit the name is reserved. 2007, c. 7, Sched. 7, s. 14.

Renewal of reservation of corporate name

(3)  Within 30 days before the expiry of the reservation of a corporate name under subsection (1), the person who reserved the name may apply for a renewal of the reservation for a further period of not more than 90 days by submitting an application for the renewal to the Superintendent and paying the fee established by the Minister. 2007, c. 7, Sched. 7, s. 14.

Corporate seal

22.1  A credit union may, but need not, have a corporate seal. 2007, c. 7, Sched. 7, s. 14.

See: 2007, c. 7, Sched. 7, ss. 14, 192 (2).

Location of head office

23.  (1)  A credit union shall have its head office in Ontario at the place indicated in its articles.

Change

(2)  A credit union may by articles of amendment change the location of its head office to another place in Ontario. 1994, c. 11, s. 23.

Objects and Powers

Objects

24.  (1)  The object of a credit union is to provide on a co-operative basis financial services primarily for its members. 1994, c. 11, s. 24 (1).

Co-operative basis

(2)  A credit union shall operate on a co-operative basis such that,

(a) membership is voluntary and is open to those that fall within its bond of association;

(b) its business is carried on primarily for the benefit of its members;

(c) the net income that accrues from its business is,

(i) used to provide services for its members,

(ii) used to develop its business,

(iii) used to increase its reserves or retained earnings,

(iv) distributed to its members and shareholders, or

(v) used for another purpose approved by the members; and

(d) each member has only one vote at its general meetings or in respect of elections of its directors and officers. 1994, c. 11, s. 24 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (d) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 15 (1) and the following substituted:

(d) each member has only one vote at its general meetings or in respect of elections of its directors.

See: 2007, c. 7, Sched. 7, ss. 15 (1), 192 (2).

Exception

(3)  Clause (2) (d) does not apply with respect to section 35. 1994, c. 11, s. 24 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 15 (2) and the following substituted:

Exception

(3)  Clause (2) (d) does not prevent a member from voting as a proxy holder as allowed under section 217.3. 2007, c. 7, Sched. 7, s. 15 (2).

See: 2007, c. 7, Sched. 7, ss. 15 (2), 192 (2).

Powers

25.  (1)  A credit union has the capacity of a natural person and, subject to this Act, the rights, powers and privileges of a natural person.

Powers outside Ontario

(2)  A credit union may exercise its powers outside of Ontario to the extent permitted under the laws of the applicable jurisdiction.

Extra-provincial powers

(3)  A credit union may accept extra-provincial powers and rights. 1994, c. 11, s. 25.

Acting outside powers

26.  (1)  No act of a credit union and no transfer of real or personal property to or by a credit union before or after this section comes into force, that is otherwise lawful, is invalid because the credit union was without capacity or power to do the act or make or receive the transfer, but a lack of capacity or power may be asserted,

(a) in a proceeding against the credit union by a member under subsection (2);

(b) in a proceeding by the credit union, whether acting directly or through a receiver, liquidator, trustee or their legal representative or through members in a representative capacity, against a director or officer or former director or officer of the credit union; or

(c) as a cause for the cancellation of the certificate of incorporation of the credit union.

Restraining order

(2)  A member of a credit union may apply to court for an order restraining the credit union from doing any act on the ground that the credit union lacks capacity to do so.

Granting order

(3)  Subject to subsection (4), the court may, if it considers it to be just and equitable, grant the order.

Where contract

(4)  If the act or transfer that the member seeks to restrain is to be done under a contract to which the credit union is a party,

(a) all the parties to the contract are parties to the proceedings;

(b) the court may,

(i) grant the order and set aside the contract, and

(ii) award compensation to the credit union or other parties to the contract for any damages or loss, other than anticipated profits from the contract, sustained by them because the order is granted and the contract is set aside. 1994, c. 11, s. 26.

Miscellaneous

Indoor management rule

27.  (1)  A credit union or a guarantor of an obligation of one shall not assert against a person dealing with the credit union or with a person who has acquired rights from the credit union any of the following matters:

1. The articles or by-laws have not been complied with.

2. The individuals named in the most recent notice filed under the Corporations Information Act or named in the articles, whichever is more current, are not the directors of the credit union.

3. The location of its head office indicated in a notice filed under the Corporations Information Act, as named in the by-laws, or named in the articles, whichever is more current, is not the head office of the credit union.

4. A person held out by the credit union as a director, officer or agent has not been duly appointed or does not have authority to exercise the powers and perform the duties that are customary in the business of the credit union or usual for the director, officer or agent.

5. 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.

6. Financial assistance was not authorized.

7. The sale, lease, exchange or disposition of property of the credit union was not authorized under section 204.

Exception

(2)  Subsection (1) does not apply if the person has or ought to have knowledge of the matter by virtue of his, her or its position with or relationship to the credit union. 1994, c. 11, s. 27 (1, 2).

No deemed notice

(3)  No person is affected by or is deemed to have knowledge of the contents of a document concerning a credit union by reason only that the document has been filed with the Superintendent or is available for inspection at an office of the credit union. 1994, c. 11, s. 27 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, Part III is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 16 by adding the following sections:

Financial years

27.1  (1)  The financial year of a credit union must end on December 31. 2007, c. 7, Sched. 7, s. 16.

Existing financial years with different year ends

(2)  The following apply if, on the day this section comes into force, a credit union’s financial year ends on a date other than December 31:

1. The credit union’s financial year need not be changed.

2. If the credit union’s financial year is changed, it must be changed so that it ends on December 31. 2007, c. 7, Sched. 7, s. 16.

Special rule not to apply to amalgamated credit unions

(3)  Subsection (2) does not apply to a credit union formed by the amalgamation of two or more credit unions after the day this section comes into force; in such a case, the financial year of the amalgamated credit union must end on December 31. 2007, c. 7, Sched. 7, s. 16.

Corporations Act not to apply

27.2  The Corporations Act does not apply to credit unions. 2007, c. 7, Sched. 7, s. 16.

See: 2007, c. 7, Sched. 7, ss. 16, 192 (2).

PART IV
MEMBERSHIP

Who May Be Member

Membership

28.  (1)  Subject to the provisions of this Act and its articles, membership in a credit union is governed by its by-laws. 1994, c. 11, s. 28 (1).

Same

(2)  The by-laws shall prescribe the number of membership shares that a person or entity must subscribe for to become a member. 1994, c. 11, s. 28 (2).

Holding membership shares

(3)  Members must hold the number of membership shares prescribed by the by-laws. 1994, c. 11, s. 28 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 28 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 17 and the following substituted:

Membership

28.  (1)  Membership in a credit union is governed by the credit union’s by-laws, subject to the provisions of this Act and the credit union’s articles. 2007, c. 7, Sched. 7, s. 17.

Minimum membership shares required

(2)  To be a member, a person or entity must hold the minimum number of membership shares required under the by-laws of the credit union. 2007, c. 7, Sched. 7, s. 17.

Member who ceases to hold the minimum

(3)  A member who ceases to hold enough shares to be a member shall, nonetheless, continue to be a member of the credit union for the purposes of this Act, subject to any limitations in the by-laws of the credit union, including limitations on the rights that member may exercise. 2007, c. 7, Sched. 7, s. 17.

Ground for expulsion

(4)  For greater certainty, subsection (3) does not prevent holding fewer than the minimum number of shares from being set out in the by-laws of the credit union as a ground for expulsion under subsection 47 (1). 2007, c. 7, Sched. 7, s. 17.

See: 2007, c. 7, Sched. 7, ss. 17, 192 (2).

Becoming a member

29.  (1)  Each incorporator of a credit union who has subscribed for a membership share in the credit union becomes a member upon the effective date of incorporation.

Subscription deemed application

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

Applicants for membership

(3)  Subject to subsection (1), no person shall become a member of a credit union until the person’s application for membership has been approved by the board or an employee authorized by the board and the applicant has complied fully with the by-laws governing admission of members. 1994, c. 11, s. 29.

Membership limitation

30.  (1)  Subject to subsection (2), the by-laws of every credit union shall provide that the membership of the credit union is limited to persons, related persons or entities who come within a bond of association. 1994, c. 11, s. 30 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 18 (1) and the following substituted:

Limitation on membership

(1)  The by-laws of every credit union shall provide that the membership of the credit union is limited to persons, related persons and entities who come within a bond of association and shall specify the nature of the bond of association. 2007, c. 7, Sched. 7, s. 18 (1).

See: 2007, c. 7, Sched. 7, ss. 18 (1), 192 (2).

Interpretation

(2)  A bond of association exists among persons or entities who,

(a) have a common bond of occupation or association;

(b) reside or work within a municipality, neighbourhood or other reasonably well-defined community; or

(c) either have,

(i) a common bond of occupation or association, or

(ii) reside or work within a municipality, neighbourhood or other reasonably well-defined community. 1994, c. 11, s. 30 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 18 (1). See: 2007, c. 7, Sched. 7, ss. 18 (1), 192 (2).

Same

(3)  Despite subsection (1), the by-laws may provide that an employee of a credit union may become a member. 1994, c. 11, s. 30 (3).

Same

(4)  The Superintendent, if satisfied that the credit union is meeting prudential lending and investing standards and the capital adequacy and liquidity requirements set out in this Act and the regulations and is being operated in a satisfactory manner, may approve an amendment to the by-laws changing the bond of association subject to such conditions as the Superintendent sees fit. 1994, c. 11, s. 30 (4); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 18 (2). See: 2007, c. 7, Sched. 7, ss. 18 (2), 192 (2).

Same

(5)  The credit union shall, at the request of the Superintendent, provide to the Superintendent such information that he or she believes will help in making a determination under subsection (4). 1994, c. 11, s. 30 (5); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 18 (2). See: 2007, c. 7, Sched. 7, ss. 18 (2), 192 (2).

Approval needed

(6)  Before an application is made under this section, the proposed amendment must be approved by the board and ratified by a special resolution passed at a meeting of members called for that purpose. 2002, c. 18, Sched. H, s. 3 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (6) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 18 (2). See: 2007, c. 7, Sched. 7, ss. 18 (2), 192 (2).

Same

(7)  By-laws to which this section applies are subject to the approval of the Superintendent. 1994, c. 11, s. 30 (7); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (7) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 18 (2). See: 2007, c. 7, Sched. 7, ss. 18 (2), 192 (2).

Admissions outside bond of association

31.  (1)  If the credit union’s by-laws permit it to do so, the board may admit, as a member of the credit union, any person or entity who does not come within the bond of association in the following circumstances:

1. The number of members who do not come within the bond of association does not exceed 3 per cent of the number of members in the credit union.

2. The admission of specific members who do not come within the bond of association is approved by the board.

3. Members who do not come within the bond of association must be identified as such in the membership register. 1994, c. 11, s. 31 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 3 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 19 and the following substituted:

3. Members who do not come within the bond of association must be identified as such in the register under section 230.

See: 2007, c. 7, Sched. 7, ss. 19, 192 (2).

Same

(2)  A person or entity admitted as a member who does not come within the bond of association has all the rights and obligations of membership. 1994, c. 11, s. 31 (2).

Retaining membership

32.  (1)  If authorized by the by-laws, a member who no longer falls within the bond of association may retain membership in the credit union.

Exception

(2)  Section 31 does not apply to members who retain their membership under subsection (1). 1994, c. 11, s. 32.

Register of members

33.  (1)  Every person or entity whose name is registered in the register of members is entitled to,

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 20 by striking out the portion before clause (a) and substituting the following:

Record, information relating to membership

(1)  Every person or entity whose name is registered in the register under section 230 is entitled to,

See: 2007, c. 7, Sched. 7, ss. 20, 192 (2).

(a) a record specifying the amount paid upon membership shares, deposits and loans by the person or entity; and

(b) such other information as may be prescribed by the by-laws of the credit union. 1994, c. 11, s. 33 (1).

Same

(2)  The record referred to in clause (1) (a) is admissible in evidence as proof, in the absence of evidence to the contrary, of membership and of the information entered therein. 1994, c. 11, s. 33 (2).

Corporate and partnership members

34.  Her Majesty the Queen in right of Ontario or in right of Canada or a corporation including a municipality as defined in the Municipal Affairs Act, an unincorporated association or a partnership registered under the Business Names Act or a predecessor thereof may become a member of a credit union on such conditions as are prescribed. 1994, c. 11, s. 34.

Voting

Note: On a day to be named by proclamation of the Lieutenant Governor, the heading is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 21. See: 2007, c. 7, Sched. 7, ss. 21, 192 (2).

One vote

35.  (1)  A member of a credit union has only one vote at a membership meeting. 1994, c. 11, s. 35 (1).

Proxies permitted

(2)  No member of a credit union shall vote by proxy except when the member is Her Majesty the Queen in right of Ontario or in right of Canada, a corporation including a municipality defined in the Municipal Affairs Act, an unincorporated association, or a partnership registered under the Business Names Act or a predecessor thereof. 1994, c. 11, s. 35 (2).

Limit on proxies

(3)  No person may cast more than one vote by proxy on any one matter at a membership meeting. 1994, c. 11, s. 35 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 35 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 21. See: 2007, c. 7, Sched. 7, ss. 21, 192 (2).

Mail balloting

36.  (1)  The by-laws of a credit union may allow members to vote in an election of directors or on any matter requiring approval of the members in person by mail ballot, ballot in each branch or electronic means. 1994, c. 11, s. 36 (1).

Same

(2)  The by-laws may set out the conditions that apply to a ballot cast by mail or electronic means. 1994, c. 11, s. 36 (2).

Regulations

(3)  The Lieutenant Governor in Council may make regulations governing mail balloting, balloting in each branch and balloting by electronic means. 1994, c. 11, s. 36 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 36 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 21. See: 2007, c. 7, Sched. 7, ss. 21, 192 (2).

Rights and Liabilities

Liability of members

37.  The members of a credit union are not, by reason only of holding membership shares of a credit union, liable for any liability, act or default of the credit union except as otherwise provided by this Act. 1994, c. 11, s. 37.

Not bound by trust

38.  A credit union is not bound to see to the execution of any trust, whether express, implied or constructive, to which any membership share or deposit is subject. 1994, c. 11, s. 38.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 38 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 22 and the following substituted:

Not bound by trust

38.  (1)  A credit union is not bound to see to the execution of any trust to which any membership share is subject. 2007, c. 7, Sched. 7, s. 22.

Application

(2)  Subsection (1) applies whether the trust is express, implied or constructive. 2007, c. 7, Sched. 7, s. 22.

See: 2007, c. 7, Sched. 7, ss. 22, 192 (2).

Membership shares in trust

39.  (1)  A member, in addition to holding membership shares in the member’s own name, may subscribe for and hold membership shares and may make deposits in trust for a named beneficiary. 1994, c. 11, s. 39 (1).

Same

(2)  The beneficiary shall be deemed to be a member of the credit union. 1994, c. 11, s. 39 (2).

Same

(3)  The beneficiary is not entitled to notice of meetings or to vote at meetings. 1994, c. 11, s. 39 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 39 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 22 and the following substituted:

Trusts for named beneficiaries

39.  (1)  A credit union may accept deposits from a member in trust for a named beneficiary only if,

(a) the member holds, in trust for the beneficiary, the minimum number of membership shares required under subsection 28 (2);

(b) the member and the beneficiary are related persons;

(c) the deposits are money the member is required to hold in accordance with subsection 57 (1) of the Law Society Act; or

(d) the deposits are required or governed under an Act and are prescribed for the purposes of this clause. 2007, c. 7, Sched. 7, s. 22.

Deposit is separate for deposit insurance purposes

(2)  A deposit of a member in trust for a named beneficiary shall be deemed, for the purpose of paragraph 2 of subsection 270 (2), to be a deposit separate from any other deposit of the member. 2007, c. 7, Sched. 7, s. 22.

Exercise of rights of membership shares held in trust

(3)  The following apply with respect to membership shares held by a member in trust for a beneficiary:

1. The member shall exercise the rights attached to the shares, subject to paragraph 2.

2. At a meeting of members, the member does not have an additional vote as a result of holding the membership shares in trust. 2007, c. 7, Sched. 7, s. 22.

Disclosure of beneficiary

(4)  The member shall disclose to the credit union such personal information concerning the beneficiary as the credit union requires to comply with all applicable laws. 2007, c. 7, Sched. 7, s. 22.

Failure to disclose

(5)  A credit union may refuse to accept or maintain a deposit made by a member in trust for a named beneficiary if the member refuses or fails to provide the information referred to in subsection (4). 2007, c. 7, Sched. 7, s. 22.

See: 2007, c. 7, Sched. 7, ss. 22, 192 (2).

Joint accounts

40.  Two or more members may hold their membership shares and deposits in a joint account and, in the absence of written notice to the contrary, payment by the credit union to any of the members or to the survivor or any of the survivors of the members of any money standing to the credit of the joint share or deposit account discharges the credit union from any further liability for such payment. 1994, c. 11, s. 40.

Members under age of 18 years

41.  (1)  A person under the age of eighteen years may be a member of a credit union. 1994, c. 11, s. 41 (1).

Rights

(2)  A member under the age of eighteen years may,

(a) enjoy all the rights of a member;

(b) execute all instruments necessary to be executed; and

(c) give all acquittances necessary to be given. 1994, c. 11, s. 41 (2).

Limits

(3)  A member under the age of eighteen years is not entitled to vote unless permitted to do so by the by-laws. 1994, c. 11, s. 41 (3).

Right to borrow

(4)  Subject to the by-laws, a member under the age of eighteen years does not have the right to borrow any amount in excess of his or her deposits in the credit union unless,

(a) a joint and several obligation is signed by the member and by a person eighteen years of age or over; or

(b) the loan is guaranteed by the Government of Canada or a provincial or municipal government. 1994, c. 11, s. 41 (4).

Deposits

(5)  A member under the age of eighteen years may deposit money with a credit union in his or her own name, and the money so deposited may be repaid to or to the order of the member, and he or she may give a valid discharge therefor, despite his or her minority. 1994, c. 11, s. 41 (5).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 41 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 23 and the following substituted:

Members under the age of 18 years

41.  If permitted by the by-laws of a credit union, a person under the age of 18 years may be a member of the credit union, subject to such conditions and restrictions as may be set out in the by-laws. 2007, c. 7, Sched. 7, s. 23.

See: 2007, c. 7, Sched. 7, ss. 23, 192 (2).

Death, etc.

Transmission of shares

42.  (1)  Subject to section 43 and, where the death occurred on or before the 10th day of April, 1979, subject to The Succession Duty Act, being chapter 449 of the Revised Statutes of Ontario, 1970, if a transmission of a share in a credit union takes place by virtue of any testamentary act or instrument, or in consequence of an intestacy, if the probate of the will or letters of administration or document testamentary, or other judicial or official instrument under which the title, whether beneficial or as trustee, or the administration or control of the personal estate of the deceased is claimed to vest, purports to be granted by any court or authority in any country, the probate of will or letters of administration or document testamentary or other judicial or official instrument or an authenticated copy thereof, or an official extract therefrom, may, together with a declaration in writing showing the nature of the transmission and signed and executed by the person claiming by virtue thereof, be produced and deposited with the secretary or officer named by the board of the credit union for the purpose of receiving it. 1994, c. 11, s. 42 (1).

Proof

(2)  The production and deposit specified in subsection (1) is sufficient authority to the credit union to pay the amount or value of any obligation on shares, in pursuance of and in conformity with the letters probate, letters of administration or other instrument. 1994, c. 11, s. 42 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 42 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 24 and the following substituted:

Limited payment re deceased member

42.  (1)  If a member of a credit union dies and the credit union makes a payment of an amount described in subsection (2) to such person as the credit union is satisfied is entitled to receive the amount, the payment discharges any obligation of the credit union and its board in respect of and to the extent of the amount paid even if the payment is made without letters probate or letters of administration being taken out. 2007, c. 7, Sched. 7, s. 24.

Type of payments

(2)  The payment referred to in subsection (1) is a payment of the following:

1. An amount not exceeding the prescribed amount payable from the amount on deposit in the name of the deceased or in consideration for the membership shares of the deceased.

2. An amount not exceeding the prescribed amount payable from any money that is received by the credit union under any policy of insurance on the life of the deceased. 2007, c. 7, Sched. 7, s. 24.

Restrictions

(3)  Subsection (1) applies only if the credit union pays the amount in good faith and the credit union receives, before the payment,

(a) a statutory declaration attesting to the person’s entitlement to receive the amount; or

(b) such other evidence of the person’s entitlement to the amount as the credit union considers to be appropriate in the circumstances. 2007, c. 7, Sched. 7, s. 24.

Credit union can require more

(4)  Nothing in this section prevents the credit union from requiring additional documentation or evidence as the credit union considers appropriate. 2007, c. 7, Sched. 7, s. 24.

Recovery from recipient

(5)  Subsection (1) does not affect any right of a person claiming to be entitled to recover the amount from the person to whom it was paid. 2007, c. 7, Sched. 7, s. 24.

No limit on other powers, requirements

(6)  For greater certainty, this section does not prevent a credit union from making a payment or transfer as otherwise allowed or required by law. 2007, c. 7, Sched. 7, s. 24.

If deceased member was trustee

(7)  If a member of a credit union dies holding membership shares or money on deposit in trust for a named beneficiary, the credit union may pay the amount of, or transfer, the membership shares or deposit and any interest or dividends on them,

(a) to the executor or administrator of the estate of the deceased member; or

(b) to the beneficiary if there is no executor or administrator of the estate of the deceased member or, if the beneficiary is a minor, to the beneficiary’s parent or guardian. 2007, c. 7, Sched. 7, s. 24.

See: 2007, c. 7, Sched. 7, ss. 24, 192 (2).

Payment of money re deceased member

43.  (1)  If a member of a credit union dies, the credit union may pay,

(a) an amount not exceeding a prescribed amount out of the amount on deposit in the name of the deceased or for the membership shares of the deceased; and

(b) an amount not exceeding a prescribed amount out of any money that is received by the credit union under any policy of insurance on the life of the deceased,

to any person who the credit union is satisfied, by statutory declaration attested to not sooner than thirty days after the death, is entitled. 1994, c. 11, s. 43 (1).

Effect of payment

(2)  A payment made under subsection (1) discharges any obligation of the credit union or its board in respect of the money paid but does not affect the right of any other person claiming to be entitled to recover the money from the person to whom it was paid. 1994, c. 11, s. 43 (2).

Deposits or membership shares in trust

(3)  If a member of a credit union dies holding membership shares or money on deposit in his or her name in trust for a named beneficiary, the credit union may pay the amount of the membership shares or deposit and any interest or dividends thereon to the executor or administrator of the estate of the deceased member, subject to the trust or, if there is no executor or administrator, to the beneficiary or, if the beneficiary is a minor, to his or her parent or guardian. 1994, c. 11, s. 43 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 43 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 24. See: 2007, c. 7, Sched. 7, ss. 24, 192 (2).

Liens and Credits

Note: On a day to be named by proclamation of the Lieutenant Governor, the heading is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 25 and the following substituted:

Liens

See: 2007, c. 7, Sched. 7, ss. 25, 192 (2).

Lien for liability

44.  A credit union has a lien on the deposits and membership shares of a member for any liability to it by the member, and may set off any sum standing to the credit of the member on the books of the credit union towards the payment of the liability. 1994, c. 11, s. 44.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 44 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 25 and the following substituted:

Lien for liability

44.  (1)  A credit union has a lien on the deposits and membership shares of a member for any liability to it by the member, and may set off any sum standing to the credit of the member on the books of the credit union towards the payment of the liability. 2007, c. 7, Sched. 7, s. 25.

Limitation, member’s share account

(2)  Despite subsection (1), a credit union shall not apply any service charges or other deductions against a member’s share account except upon the termination of the membership. 2007, c. 7, Sched. 7, s. 25.

See: 2007, c. 7, Sched. 7, ss. 25, 192 (2).

Note: Section 45 comes into force on a day to be named by proclamation of the Lieutenant Governor.

Unclaimed credits

45.  (1)  Within thirty days after money held by a credit union to the credit of a depositor becomes an unclaimed credit, the credit union shall pay to the Minister the amount owing to the depositor, including interest, if any, in accordance with the agreement between the credit union and the depositor. 1994, c. 11, s. 45 (1).

Same

(2)  Money held by a credit union to the credit of a depositor becomes an unclaimed credit on the day seven years after the day on which the fixed term ended, in the case of a deposit for a fixed term, and, in any other case, on the day seven years after the day on which the last transaction by the depositor took place on the depositor’s account or a statement of account was last requested or acknowledged by the depositor, whichever is latest. 1994, c. 11, s. 45 (2).

Obligation discharged

(3)  Payment to the Minister discharges the credit union from all liability in respect of the money held. 1994, c. 11, s. 45 (3).

Payment by Minister

(4)  The Minister shall pay the amount received under subsection (1) to a person claiming to be entitled to it upon being furnished with satisfactory evidence of the person’s entitlement. 1994, c. 11, s. 45 (4).

Repeal

(5)  If the Unclaimed Intangible Property Act is in force on the day this section comes into force, this section is repealed on that day; otherwise this section is repealed on the day the Unclaimed Intangible Property Act comes into force. 1994, c. 11, s. 45 (5).

See: 1994, c. 11, s. 396 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 45 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 25. See: 2007, c. 7, Sched. 7, ss. 25, 192 (2).

Withdrawals and Expulsions

Withdrawal of members

46.  (1)  A member of a credit union may withdraw from the credit union at any time by giving notice in accordance with the by-laws. 1994, c. 11, s. 46 (1).

Same

(2)  A deceased member shall be deemed to have given notice to the credit union of intention to withdraw on the day of his or her death. 1994, c. 11, s. 46 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 46 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 26 by adding the following subsection:

Rights of withdrawing member

(3)  The by-laws of a credit union shall set out the rights of a withdrawing member which shall include the right to receive payment for the member’s membership shares, subject to subsection 62 (3), and the return of any money on deposit and property held by the credit union. 2007, c. 7, Sched. 7, s. 26.

See: 2007, c. 7, Sched. 7, ss. 26, 192 (2).

Expulsion of members

47.  (1)  A member may be expelled, by a resolution passed by a majority of the board at a meeting duly called for that purpose not later than ninety days before the date set for the annual or general meeting of the credit union, from membership in a credit union for,

(a) misconduct in the affairs of the credit union;

(b) failure to abide by the conditions of membership set out in the by-laws; or

(c) failure to pay an indebtedness in accordance with the conditions of repayment. 1994, c. 11, s. 47 (1).

Notice of misconduct

(2)  A resolution under subsection (1) is not valid unless,

(a) prior written notice, setting out the grounds upon which the member is to be expelled, is given to the member at least ten days before the meeting of the board called to consider the resolution expelling that member; and

(b) an opportunity is given to the member to appear either personally or by a person authorized under the Law Society Act to represent the member to make submissions at the meeting of the board called to consider the resolution expelling the member. 1994, c. 11, s. 47 (2); 2006, c. 21, Sched. C, s. 106 (1).

Notice of decision

(3)  The secretary of the credit union shall, within five days after the meeting of the board, notify the member of the decision of the board by registered letter addressed to the member at the member’s last known address. 1994, c. 11, s. 47 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 47 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 27 (1) and the following substituted:

Expulsion of members

47.  (1)  A member of a credit union may be expelled from membership, in accordance with the by-laws, by a resolution of the board on the grounds set out in the by-laws. 2007, c. 7, Sched. 7, s. 27 (1).

Member rights relating to expulsion

(2)  The by-laws of a credit union shall provide for the following rights:

1. The right of a member to receive advance notice of any meeting of the board at which the board will consider a resolution to expel the member.

2. The right of the member not to be expelled without being given an opportunity to appear at the meeting of the board to make submissions and to be represented at the meeting by legal counsel or an agent.

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 2 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 27 (2) by striking out “by legal counsel or an agent” and substituting “by a person authorized under the Law Society Act to represent the member”. See: 2007, c. 7, Sched. 7, ss. 27 (2), 192 (2).

3. The right of an expelled member to appeal the decision of the board at the next general meeting of the members.

4. The right of the expelled member to be reinstated as a member of the credit union if, at the next general meeting, the members, by a majority of the votes cast at the meeting, set aside the resolution of the board.

5. The right of the expelled member to receive payment for the member’s membership shares, subject to subsection 62 (3), and the return of any money on deposit and property held by the credit union. 2007, c. 7, Sched. 7, s. 27 (1).

Procedures to be set out in by-laws

(3)  The by-laws of a credit union shall set out the following:

1. The procedures to be followed by the board to provide the advance notice referred to in paragraph 1 of subsection (2).

2. The procedures to be followed relating to the appeal referred to in paragraph 3 of subsection (2). 2007, c. 7, Sched. 7, s. 27 (1).

Notice of decision

(4)  If the board passes a resolution expelling a member, the credit union shall, within five days after the resolution is passed, notify the member of the decision of the board by registered letter addressed to the member at the member’s last known address. 2007, c. 7, Sched. 7, s. 27 (1).

See: 2007, c. 7, Sched. 7, ss. 27 (1), 192 (2).

Payment to withdrawing and expelled member

48.  (1)  Subject to section 62, all amounts paid to the credit union on membership shares and deposits by a withdrawing or expelled member shall, after deducting all amounts due from the member to the credit union, be paid to the member within ninety days after the member gives notice of intention to withdraw or is expelled. 1994, c. 11, s. 48 (1).

Same

(2)  If a credit union does not pay money to a withdrawing or expelled member within ninety days after the notice of the member’s intention to withdraw or the decision to expel the member, the credit union shall notify the Superintendent and the deposit insurer of the intended withdrawal or expulsion and advise them of the reasons for not paying. 1994, c. 11, s. 48 (2); 1997, c. 28, s. 53.

Same

(3)  Despite subsection (1), a credit union may pay a withdrawing or expelled member in accordance with the conditions of payment under a contract with the member. 1994, c. 11, s. 48 (3).

Same

(4)  A withdrawing or expelled member is entitled to receive any dividend, interest or rebate of loan interest paid or payable to other members of the credit union as at the date of the member’s withdrawal or expulsion on the same conditions that the board of directors have made applicable to all members of the credit union. 1994, c. 11, s. 48 (4).

Notice of withdrawal

(5)  Subject to subsection (1), a member who has given notice of withdrawal, or is expelled from a credit union, has no further rights as a member in the credit union, but the member is not, by the withdrawal or expulsion, released from any remaining obligation to the credit union. 1994, c. 11, s. 48 (5).

Extension of time

(6)  If, in the opinion of the board, the payments in accordance with subsections (1), (3) and (4) would not be in the best interests of the credit union, the board may, by resolution, suspend the payments for a time longer than ninety days, if approved by the Superintendent, and on such conditions as the Superintendent may approve. 1994, c. 11, s. 48 (6); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 48 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 27 (1). See: 2007, c. 7, Sched. 7, ss. 27 (1), 192 (2).

Appeal from expulsion

49.  (1)  If a resolution to expel a member is passed, the member may appeal the decision of the board at the next annual or general meeting of members and the members may, by majority of the votes cast at the meeting, confirm, vary or set aside the resolution. 1994, c. 11, s. 49 (1).

Notice

(2)  A member who wants to appeal a resolution to expel must give notice of the intention to appeal to the board within twenty-one days after receiving the notice of expulsion. 1994, c. 11, s. 49 (2).

Notice of representations

(3)  If written representations from a member to be expelled are received at least seven days before the mailing of the notice of the annual or general meeting, the board shall, at the expense of the credit union, include with the notice of the meeting, a notice that those representations are available for inspection by members at the head office and at the branches of the credit union. 2002, c. 18, Sched. H, s. 3 (3).

Made available

(4)  The board shall make the representations available to members at the head office and the branches of the credit union. 1994, c. 11, s. 49 (4).

Limit on length

(5)  The representations must be no longer than 2,000 words in length. 1994, c. 11, s. 49 (5).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 49 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 27 (1). See: 2007, c. 7, Sched. 7, ss. 27 (1), 192 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 28 by adding the following heading immediately before section 50:

Representative Actions by Members

See: 2007, c. 7, Sched. 7, ss. 28, 192 (2).

Members may maintain representative actions

50.  (1)  Subject to subsection (2), a member of a credit union may maintain an action in a court of competent jurisdiction in a representative capacity for the member and all other members of the credit union suing for and on behalf of the credit union to enforce any right, duty or obligation owed to the credit union under this Act or under any other statute or rule of law or equity that could be enforced by the credit union itself, or to obtain damages for any breach of any such right, duty or obligation.

Court order required

(2)  An action under subsection (1) shall not be started until the member has obtained an order of the court permitting the start of the action.

Application to court

(3)  A member may, upon at least seven days notice to the credit union, apply to the court for an order referred to in subsection (2).

Court order

(4)  The court may make the order upon such conditions as the court thinks fit if the court is satisfied that,

(a) the member was a member of the credit union at the time of the transaction or other event giving rise to the cause of action;

(b) the member has made reasonable efforts to cause the credit union to start or prosecute diligently the action on its own behalf; and

(c) the member is acting in good faith and it is apparently in the interests of the credit union or its members that the action be started.

Costs

(5)  At any time while an action started under this section is pending, the plaintiff may apply to the court for an order for the payment to the plaintiff by the credit union of reasonable interim costs, including solicitor’s and counsel fees and disbursements.

Accountability for costs

(6)  The plaintiff is accountable to the credit union for the interim costs if the action is dismissed on final disposition at the trial or on appeal.

Action, court approval

(7)  An action started under this section shall not be discontinued, settled or dismissed for want of prosecution without the approval of the court.

Same

(8)  If the court determines that the interests of the members or any class of members may be substantially affected by a discontinuance, settlement or dismissal, the court, may direct that notice in manner, form and content satisfactory to the court shall be given, at the expense of the credit union or any other party to the action as the court directs, to the members or class of members whose interests the court determines may be affected. 1994, c. 11, s. 50.

PART V
CAPITAL STRUCTURE

Shares

Classes of shares

51.  (1)  The articles of a credit union must provide for a class of shares known as membership shares and may provide for additional classes of shares. 1994, c. 11, s. 51 (1).

Transition

(2)  The articles of every credit union in existence on the day before this subsection comes into force shall be deemed to provide for a class of shares known as membership shares. 1994, c. 11, s. 51 (2).

Transition, class of share

(3)  A share, issued by a credit union before this subsection comes into force, that a member holds as a condition of membership in a credit union shall be deemed to be a membership share and any other share issued before this subsection comes into force shall, subject to subsection (10), be deemed to be a deposit subject to the conditions established by the board if it has not been converted by the board into another class of shares other than membership shares. 1994, c. 11, s. 51 (3).

Same

(4)  If the board converts the shares described in subsection (3), the credit union must file articles of amendment. 1994, c. 11, s. 51 (4).

Same

(5)  The articles of amendment under subsection (4) may be authorized by a resolution of the directors. 1994, c. 11, s. 51 (5).

Nature of shares

(6)  The shares of a credit union are personal property. 1994, c. 11, s. 51 (6).

Form

(7)  Shares are without nominal or par value and, unless they are membership shares, they must be in registered form. 1994, c. 11, s. 51 (7).

Transition, par value shares

(8)  Shares with a nominal or par value issued by a credit union before this subsection comes into force shall be deemed to be shares without nominal or par value. 1994, c. 11, s. 51 (8).

Same, rights re par value

(9)  If a right of a member in a share issued before this subsection comes into force was expressed in terms of the nominal or par value of the share, the right shall be deemed to be the same right expressed without reference to the nominal or par value. 1994, c. 11, s. 51 (9).

Application

(10)  A share other than a share held as a condition of membership in a credit union shall not be deemed to be a deposit until one year after subsection (3) comes into force. 1994, c. 11, s. 51 (10).

Insurability

(11)  A share held as a condition of membership in a credit union that the board has not converted to another class of share is not insured until it is deemed to be a deposit. 1994, c. 11, s. 51 (11).

Not insurable

(12)  Shares are not insurable by the Corporation. 1994, c. 11, s. 51 (12).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 51 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 29 and the following substituted:

Classes of shares

51.  (1)  The articles of a credit union must provide for a class of shares known as membership shares and may provide for additional classes of shares, including patronage shares referred to in section 53. 2007, c. 7, Sched. 7, s. 29.

Nature of shares

(2)  The shares of a credit union are personal property. 2007, c. 7, Sched. 7, s. 29.

Form

(3)  The shares of a credit union are without nominal or par value and, if they are not membership shares or patronage shares, must be in registered form. 2007, c. 7, Sched. 7, s. 29.

See: 2007, c. 7, Sched. 7, ss. 29, 192 (2).

Membership shares

52.  (1)  Membership shares confer on their holder equal rights including equal rights to receive dividends declared on the shares and to receive the remaining property of the credit union on dissolution. 1994, c. 11, s. 52 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 30 and the following substituted:

Membership shares

(1)  Membership shares confer on the holder the right to receive dividends declared on the shares and to receive the remaining property of the credit union on dissolution. 2007, c. 7, Sched. 7, s. 30.

See: 2007, c. 7, Sched. 7, ss. 30, 192 (2).

Redemption

(2)  Subject to this Act, the conditions under which membership shares may be redeemed, including the manner and time of payment for redeemed shares, shall be as set out in the articles of the credit union. 1994, c. 11, s. 52 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 30 and the following substituted:

Number of shares that member can hold

(2)  Subject to any prescribed limit or limit set out in the by-laws of the credit union, a member may hold more than the minimum number of membership shares required under subsection 28 (2) to be a member. 2007, c. 7, Sched. 7, s. 30.

See: 2007, c. 7, Sched. 7, ss. 30, 192 (2).

Same

(3)  Subject to this Act and the articles, the credit union shall redeem membership shares when a member withdraws or is expelled. 1994, c. 11, s. 52 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 30 and the following substituted:

Transfer prohibited

(3)  The holder of a membership share may not transfer an interest in the share to a person other than the credit union or another credit union and any transaction that purports to make such a transfer is void. 2007, c. 7, Sched. 7, s. 30.

See: 2007, c. 7, Sched. 7, ss. 30, 192 (2).

Transfer prohibited

(4)  A member may not transfer an interest in a membership share to a person other than the credit union and any transaction that purports to make such a transfer is void. 1994, c. 11, s. 52 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 30. See: 2007, c. 7, Sched. 7, ss. 30, 192 (2).

Certificates not mandatory

(5)  The by-laws of a credit union may provide that membership share certificates need not be issued but, if this is the case, the credit union shall give each member who requests one a statement of the number of membership shares held by the member. 1994, c. 11, s. 52 (5).

Certificates

(6)  Membership share certificates issued after this subsection comes into force must include such information as may be prescribed. 1994, c. 11, s. 52 (6).

Other shares

53.  (1)  If the articles provide for classes of shares other than membership shares, the articles must set out,

(a) the rights, privileges, restrictions and conditions attaching to the shares of each such class; and

(b) the maximum number, if any, of shares of any such class that the credit union is authorized to issue. 1994, c. 11, s. 53 (1).

Restrictions

(2)  Shares, other than membership shares, do not confer on their holder the right to vote at meetings of the credit union except as permitted under this Act or the right to receive any of the remaining property of the credit union on dissolution. 1994, c. 11, s. 53 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 53 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 31 and the following substituted:

Patronage shares

53.  (1)  The articles of a credit union may provide for a class of shares known as patronage shares to be payable to members as a dividend under section 65 or as a patronage return under section 66. 2007, c. 7, Sched. 7, s. 31.

Nature of share

(2)  A patronage share does not confer on the holder the right to vote at meetings of the members of the credit union, the right to notice of any meeting of members of the credit union, the right to receive dividends or the right to receive the remaining property of the credit union on dissolution. 2007, c. 7, Sched. 7, s. 31.

Transfer prohibited

(3)  The holder of a patronage share may not transfer an interest in the share to a person other than the credit union or another credit union and any transaction that purports to make such a transfer is void. 2007, c. 7, Sched. 7, s. 31.

Rights of classes

53.1  (1)  For each class of shares, the articles must set out,

(a) the rights, privileges, restrictions and conditions attaching to the shares of the class; and

(b) the maximum number, if any, of shares of the class that the credit union is authorized to issue. 2007, c. 7, Sched. 7, s. 31.

Restrictions

(2)  Shares, other than membership shares, do not confer on their holder the right to vote at meetings of the members of the credit union except as permitted under this Act or the right to receive any of the remaining property of the credit union on dissolution. 2007, c. 7, Sched. 7, s. 31.

See: 2007, c. 7, Sched. 7, ss. 31, 192 (2).

Shares in series

54.  (1)  The articles of a credit union may authorize the issue of any class of shares, other than membership shares, in one or more series and may fix the number of shares in, and determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series. 1994, c. 11, s. 54 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 32 (1) by striking out “determine” and substituting “set out”. See: 2007, c. 7, Sched. 7, ss. 32 (1), 192 (2).

Same

(2)  The articles may authorize the board to fix the maximum number, if any, of shares in each series and to determine the designation, rights, privileges, restrictions and conditions attaching to the shares of each series, subject to the limitations set out in the articles. 1994, c. 11, s. 54 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 32 (2) by adding “and the limitations under this Act” at the end. See: 2007, c. 7, Sched. 7, ss. 32 (2), 192 (2).

Series participation

(3)  If any cumulative dividend or amounts payable on return of capital in respect of a series of shares are not paid in full, the shares of all series of the same class participate rateably in respect of accumulated dividends and return of capital. 1994, c. 11, s. 54 (3).

Voting rights

(4)  If voting rights are attached to any series of a class of shares, the shares of every other series of that class have the same voting rights. 1994, c. 11, s. 54 (4).

Restriction on series

(5)  No rights, privileges, restrictions or conditions attached to a series of shares confer on the series a priority in respect of dividends or return of capital over any other series of shares of the same class that are then outstanding. 1994, c. 11, s. 54 (5).

Information to Superintendent

(6)  Before issuing shares in series, the board must file with the Superintendent articles of amendment in the form approved by the Superintendent designating the series and setting out the rights, privileges, restrictions and conditions of the shares. 1994, c. 11, s. 54 (6); 1997, c. 19, s. 5 (2); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (6) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 32 (3) and the following substituted:

Information to Superintendent

(6)  Before issuing shares in series, the credit union must file with the Superintendent articles of amendment designating the series and setting out the rights, privileges, restrictions and conditions attaching to the shares. 2007, c. 7, Sched. 7, s. 32 (3).

See: 2007, c. 7, Sched. 7, ss. 32 (3), 192 (2).

Authorization

(7)  Articles of amendment under subsection (6) may be authorized by a resolution of the directors. 1994, c. 11, s. 54 (7).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (7) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 32 (3). See: 2007, c. 7, Sched. 7, ss. 32 (3), 192 (2).

Proxies

55.  (1)  Part VIII of the Business Corporations Act applies, with necessary modifications, with respect to proxies for voting by shareholders in respect of shares other than membership shares as if the credit union were incorporated under that Act. 1994, c. 11, s. 55 (1).

Same

(2)  For the purposes of subsection (1), any reference in Part VIII of the Business Corporations Act to “offering corporation” shall be deemed to be a reference to the “credit union” and, if the credit union is not an “offering corporation” as defined in section 1 of that Act, any reference in Part VIII of that Act to the “Commission” shall be deemed to be a reference to the “Superintendent”. 1994, c. 11, s. 55 (2); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 55 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 33. See: 2007, c. 7, Sched. 7, ss. 33, 192 (2).

Pre-emptive right

56.  (1)  If the articles so provide, a credit union shall not issue shares of a class, other than membership shares, unless the shares have first been offered to shareholders holding shares of that class. 1994, c. 11, s. 56 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 34 by adding “or patronage shares” after “membership shares”. See: 2007, c. 7, Sched. 7, ss. 34, 192 (2).

Same

(2)  Those shareholders have a pre-emptive right to acquire the offered shares in proportion to their holdings of the shares of that class, at the same price and on the same conditions as the shares are to be offered to others. 1994, c. 11, s. 56 (2).

Exception

(3)  A shareholder has no pre-emptive right in respect of shares that are to be issued,

(a) as a share dividend; or

(b) pursuant to the exercise of conversion privileges, options or rights previously granted by the credit union. 1994, c. 11, s. 56 (3).

Same

(4)  A shareholder has no pre-emptive right in respect of shares that are to be issued,

(a) if the issuance of shares to the shareholder is prohibited under this Act; or

(b) if, to the knowledge of the board, the offer of shares to a shareholder whose recorded address is outside Ontario ought not to be made unless the appropriate authority in that jurisdiction is provided with information in addition to that submitted to the shareholders at the most recent annual meeting. 1994, c. 11, s. 56 (4).

Conversion privileges

57.  (1)  A credit union may issue conversion privileges, options or rights to acquire its securities, other than membership shares, and shall set out the applicable conditions,

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 35 by adding “or patronage shares” after “membership shares” in the portion before clause (a). See: 2007, c. 7, Sched. 7, ss. 35, 192 (2).

(a) in the documents that evidence the conversion privileges, options or rights; or

(b) in the securities to which the conversion privileges, options or rights are attached. 1994, c. 11, s. 57 (1).

Transferable rights

(2)  Conversion privileges, options and rights to acquire securities of a credit union may be made transferable or non-transferable, and options and rights to acquire such securities may be made separable or inseparable from the securities to which they are attached. 1994, c. 11, s. 57 (2).

Reserved shares

(3)  If a credit union has granted privileges to convert its securities into shares or into shares of another class or series, or has issued or granted options or rights to acquire shares, and if the articles limit the number of authorized shares, the credit union shall reserve and continue to reserve sufficient authorized shares to meet the exercise of the conversion privileges, options and rights. 1994, c. 11, s. 57 (3).

Issuing Shares

Power to issue shares

58.  (1)  A credit union may issue shares at such times, to such persons and for such consideration as the board may determine.

Restrictions re shares

(2)  A credit union may issue shares only in accordance with this Act and the articles and by-laws of the credit union. 1994, c. 11, s. 58.

Consideration

59.  (1)  A credit union shall not issue any share until the credit union has received full payment for it in cash or, with the approval of the Superintendent, in property. 1994, c. 11, s. 59 (1); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 36 (1) by adding “other than a patronage share” after “share”. See: 2007, c. 7, Sched. 7, ss. 36 (1), 192 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 59 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 36 (2) by adding the following subsection:

Exception for certain asset purchases

(1.1)  Subsection (1) does not apply to the issue of shares by a credit union if the issue is part of a transaction in which the credit union (the “purchaser credit union”) acquires the assets of another credit union (the “vendor credit union”) and, as part of that transaction, shareholders of the vendor credit union are to be issued with shares of the purchaser credit union. 2007, c. 7, Sched. 7, s. 36 (2).

See: 2007, c. 7, Sched. 7, ss. 36 (2), 192 (2).

Prohibition re commission

(2)  No person shall charge or accept payment of a commission on the purchase or sale of a membership share of a credit union. 1994, c. 11, s. 59 (2).

Same

(3)  No person described in clause 76 (a) or (b) shall charge or accept payment of a commission on the purchase or sale of a security of a credit union. 1994, c. 11, s. 59 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 36 (3). See: 2007, c. 7, Sched. 7, ss. 36 (3), 192 (2).

Shares non-assessable

60.  Shares issued by a credit union are non-assessable and no person is liable to the credit union or to its creditors in respect of his or her shares. 1994, c. 11, s. 60.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 60 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 37 by striking out “his or her” and substituting “the person’s”. See: 2007, c. 7, Sched. 7, ss. 37, 192 (2).

Redemption and Cancellation of Shares

Holding own shares

61.  (1)  Except as permitted under this Act or prescribed by regulation, a credit union shall not,

(a) hold shares of the credit union;

(b) permit a subsidiary to hold a greater number of membership shares than the minimum number required for membership in the credit union; or

(c) permit a subsidiary to hold any other shares of the credit union.

Holding as personal representative

(2)  A credit union may hold its shares in the capacity of a personal representative and may permit a subsidiary to do so, but only if neither the credit union nor any subsidiary has a beneficial interest in the shares. 1994, c. 11, s. 61 (1, 2).

Security interest

(3)  A credit union may hold its shares by way of a security interest and may permit a subsidiary to do so if the security interest is nominal or immaterial when measured by criteria established by the credit union that have been approved in writing by the Superintendent. 1994, c. 11, s. 61 (3); 1997, c. 28, s. 53.

Transitional provision

(4)  Nothing in this section precludes a credit union or any of its subsidiaries from holding a security interest held immediately before this Part comes into force.

Exception

(5)  Section 28 of the Business Corporations Act does not apply to prevent a subsidiary of a credit union from holding membership shares in a credit union that is its holding body corporate. 1994, c. 11, s. 61 (4, 5).

Purchase and redemption of shares

62.  (1)  A credit union may purchase or redeem its shares only in accordance with this section and with its articles. 1994, c. 11, s. 62 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 38 and the following substituted:

Purchase and redemption of shares

(1)  A credit union may purchase or redeem its shares only in accordance with this section and the articles and by-laws of the credit union. 2007, c. 7, Sched. 7, s. 38.

See: 2007, c. 7, Sched. 7, ss. 38, 192 (2).

Same

(2)  A credit union may purchase, for the purpose of cancellation, any of its shares or redeem any of its redeemable shares at a price not exceeding the redemption price of the share calculated according to a formula stated in its articles or, in the case of shares other than membership shares, according to the conditions attaching to the shares. 1994, c. 11, s. 62 (2).

Restrictions

(3)  A credit union shall not make any payment to purchase or redeem its shares if there are reasonable grounds for believing that the credit union is, or the payment would cause it to be, in contravention of section 84. 1994, c. 11, s. 62 (3).

Donations

(4)  A credit union may accept a share surrendered to it as a gift but may not extinguish or reduce a liability in respect of an amount unpaid on the share except in accordance with section 72. 1994, c. 11, s. 62 (4).

Cancellation of shares

63.  A credit union shall cancel its shares or fractions of its shares that it has purchased, redeemed or otherwise acquired. 1994, c. 11, s. 63.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 63 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 39 and the following substituted:

Cancellation of shares

63.  A credit union shall cancel its shares or fractions of its shares that it has purchased, redeemed or otherwise acquired, other than through the realization of security. 2007, c. 7, Sched. 7, s. 39.

See: 2007, c. 7, Sched. 7, ss. 39, 192 (2).

Sale of shares

64.  (1)  Despite section 63, if a credit union acquires any of its shares through the realization of security, the credit union may sell or otherwise dispose of them within six months after the day of the realization. 1994, c. 11, s. 64 (1).

Same

(2)  If a subsidiary of a credit union acquires shares of the credit union through the realization of security, the credit union may cause the subsidiary to sell or otherwise dispose of them within six months after the day of the realization. 1994, c. 11, s. 64 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 64 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 39 and the following substituted:

Shares acquired through realization of security

64.  (1)  If a credit union acquires any of its shares through the realization of security, the credit union shall sell, cancel or otherwise dispose of them within six months after the day of the realization. 2007, c. 7, Sched. 7, s. 39.

Same

(2)  If a subsidiary of a credit union acquires shares of the credit union through the realization of security, the credit union shall cause the subsidiary to sell or otherwise dispose of them within six months after the day of the realization. 2007, c. 7, Sched. 7, s. 39.

See: 2007, c. 7, Sched. 7, ss. 39, 192 (2).

Dividends

Note: On a day to be named by proclamation of the Lieutenant Governor, the heading is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 40 and the following substituted:

Dividends and Patronage Returns

See: 2007, c. 7, Sched. 7, ss. 40, 192 (2).

Declaration of dividend

65.  (1)  The board may declare, subject to the by-laws, and the credit union may pay a dividend in money or property. 1994, c. 11, s. 65 (1).

Same

(2)  The board may declare and the credit union may pay a dividend by issuing fully paid shares or options or rights to acquire fully paid shares, except membership shares. 1994, c. 11, s. 65 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 65 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 40 and the following substituted:

Declaration of dividend

65.  (1)  The board may declare, subject to the by-laws, and the credit union may pay a dividend. 2007, c. 7, Sched. 7, s. 40.

Form of dividend

(2)  A dividend may be paid,

(a) in cash;

(b) by issuing patronage shares;

(c) by issuing fully paid shares, other than membership shares, or options or rights to acquire fully paid shares, other than membership shares, in any class or series of shares;

(d) in a combination of two or more forms of dividends described in clauses (a), (b) and (c); or

(e) in property, with the approval of the Superintendent. 2007, c. 7, Sched. 7, s. 40.

See: 2007, c. 7, Sched. 7, ss. 40, 192 (2).

Declaration of patronage return

66.  (1)  The board may declare, subject to the by-laws, and the credit union may pay, a patronage return to its members in proportion to the business done by each member with or through the credit union. 1994, c. 11, s. 66 (1).

Form of payment

(2)  A patronage return may be paid in money or property or by issuing fully paid shares or options or rights to acquire fully paid shares, except membership shares, and may include rebates of interest paid by members in respect of loans during that fiscal year. 1994, c. 11, s. 66 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 41 and the following substituted:

Form of patronage return

(2)  A patronage return may be paid,

(a) in cash;

(b) by issuing patronage shares;

(c) by issuing fully paid shares, other than membership shares, or options or rights to acquire fully paid shares, other than membership shares, in any class or series of shares; or

(d) in a combination of two or more forms of patronage returns described in clauses (a), (b) and (c). 2007, c. 7, Sched. 7, s. 41.

Rebate of interest

(3)  A patronage return may include a rebate of interest paid by members during a financial year in respect of loans from the credit union. 2007, c. 7, Sched. 7, s. 41.

See: 2007, c. 7, Sched. 7, ss. 41, 192 (2).

Restriction on dividends, etc.

67.  The board shall not declare, and the credit union shall not pay, a dividend or patronage return if there are reasonable grounds for believing that the credit union is, or the payment would cause it to be, in contravention of section 84. 1994, c. 11, s. 67.

Stated Capital

Stated capital account

68.  (1)  A credit union shall maintain a separate stated capital account for each class and series of shares it issues. 1994, c. 11, s. 68 (1).

Addition to account

(2)  A credit union shall record in the appropriate stated capital account the full amount of any consideration it receives for any shares it issues. 1994, c. 11, s. 68 (2).

Transition

(3)  A credit union that exists when this subsection comes into force shall record in the stated capital account maintained for membership shares an amount equal to the aggregate amount paid up on the membership shares less any amount deemed converted to a deposit under subsection 51 (3). 1994, c. 11, s. 68 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 42. See: 2007, c. 7, Sched. 7, ss. 42, 192 (2).

Same

(4)  An amount unpaid in respect of a membership share issued before this subsection comes into force and paid after it comes into force must be recorded in the stated capital account maintained for membership shares. 1994, c. 11, s. 68 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 42. See: 2007, c. 7, Sched. 7, ss. 42, 192 (2).

Adjustment due to conversion

69.  (1)  On a conversion of outstanding shares, other than membership shares, of a credit union into shares of another class or series, the credit union shall,

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 43 by striking out the portion before clause (a) and substituting the following:

Adjustment due to conversion

(1)  On a conversion of outstanding shares, other than membership shares or patronage shares, of a credit union into shares of another class or series, the credit union shall,

See: 2007, c. 7, Sched. 7, ss. 43, 192 (2).

(a) deduct from the stated capital account maintained for the class or series of shares converted an amount equal to the result obtained by multiplying the stated capital of the shares of that class or series by the number of shares of that class or series converted, and dividing by the number of outstanding shares of that class or series immediately before the conversion; and

(b) record the result obtained under clause (a) and any additional consideration received on the conversion in the stated capital account maintained for the class or series of shares into which the shares have been converted. 1994, c. 11, s. 69 (1).

Stated capital of convertible shares

(2)  For the purposes of subsection (1) and subject to the articles, if a credit union issues two classes of shares and there is attached to each class a right to convert a share of one class into a share of the other class and a share is so converted, the amount of stated capital attributable to a share in either class is the aggregate of the stated capital of both classes divided by the number of outstanding shares of both classes immediately before the conversion. 1994, c. 11, s. 69 (2).

Conversion or change of shares

(3)  Shares issued by a credit union and converted into shares of another class or series become issued shares of the class or series into which the shares have been converted. 1994, c. 11, s. 69 (3).

Definition

(4)  In this section,

“conversion” of a share includes a change made under subsection 311 (1) into another class or series. 1994, c. 11, s. 69 (4).

Addition due to debt conversion

70.  On conversion of a debt obligation of a credit union into shares, the credit union shall,

(a) deduct from the liabilities of the credit union the nominal value of the debt obligation; and

(b) record the result obtained under clause (a) and any additional consideration received for the conversion in the stated capital account maintained for the class or series of shares into which the debt obligation has been converted. 1994, c. 11, s. 70.

Reduction due to purchase, etc.

71.  (1)  On a purchase, redemption or other acquisition of shares or fractions of shares by a credit union, the credit union shall deduct from the stated capital account maintained for the applicable class or series of shares an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series by the number of shares purchased, redeemed or acquired and dividing by the number of shares of that class or series outstanding immediately before the purchase, redemption or acquisition.

Exception

(2)  This section does not apply with respect to shares acquired as described in subsection 61 (2) or acquired through the realization of security and sold in accordance with subsection 64 (1). 1994, c. 11, s. 71.

Reduction by special resolution

72.  (1)  The stated capital of a credit union may be reduced by special resolution. 1994, c. 11, s. 72 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 44 (1) and the following substituted:

Reduction by special resolution

(1)  The stated capital of a credit union may be reduced by special resolution of the members of the credit union. 2007, c. 7, Sched. 7, s. 44 (1).

See: 2007, c. 7, Sched. 7, ss. 44 (1), 192 (2).

Contents of special resolution

(2)  The special resolution must specify each stated capital account to be affected by the reduction. 1994, c. 11, s. 72 (2).

Approval

(3)  The special resolution has no effect until it is approved in writing by the Superintendent. 1994, c. 11, s. 72 (3); 1997, c. 28, s. 53.

Conditions for approval

(4)  The Superintendent may not approve the special resolution unless an application for his or her approval is made within three months after the resolution is passed and a copy of the resolution, together with a notice of intention to apply for approval, has been published in The Ontario Gazette. 1994, c. 11, s. 72 (4); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, the French version of subsection (4) is re-enacted by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 44 (2). See: 2007, c. 7, Sched. 7, ss. 44 (2), 192 (2).

Information

(5)  An application for approval must include such information and documents as the Superintendent may require. 1994, c. 11, s. 72 (5); 1997, c. 28, s. 53.

Restriction

(6)  A credit union shall not reduce its stated capital by special resolution if there are reasonable grounds for believing that the credit union is, or the reduction would cause it to be, in contravention of section 84. 1994, c. 11, s. 72 (6).

Reducing capital account

(7)  A credit union shall adjust its stated capital account or accounts in accordance with any special resolution referred to in subsection (1). 1994, c. 11, s. 72 (7).

Recovery by action

73.  (1)  If money has been paid or property distributed as a consequence of a reduction of capital made contrary to section 72, a creditor of the credit union may apply to a court for an order compelling the member, shareholder or other person to pay the money or deliver the property to the credit union. 1994, c. 11, s. 73 (1).

Shares held by personal representative

(2)  A person holding shares as a personal representative who is registered on the records of the credit union as a member or shareholder and described as the personal representative for a named person is not personally liable under subsection (1) but the named person is liable. 1994, c. 11, s. 73 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 45 and the following substituted:

Shares held by personal representative

(2)  A person holding shares as a personal representative who is registered in the register under section 230 as a member or shareholder and described as the personal representative for a named person is not personally liable under subsection (1), but the named person is liable. 2007, c. 7, Sched. 7, s. 45.

See: 2007, c. 7, Sched. 7, ss. 45, 192 (2).

(3)  Repealed: 2002, c. 24, Sched. B, s. 25.

Remedy preserved

(4)  This section does not affect any liability that arises under section 153. 1994, c. 11, s. 73 (4).

Transfer of Securities

Application of Securities Transfer Act, 2006

74.  The Securities Transfer Act, 2006 applies, with necessary modifications, with respect to the transfer of securities, other than membership shares. 2006, c. 8, s. 142.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 74 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 46 by adding “or patronage shares” after “membership shares”. See: 2007, c. 7, Sched. 7, ss. 46, 192 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 47 by adding the following section:

Restrictions on transfer of securities

74.1  (1)  A security issued under circumstances described in clause 75 (1) (a) shall not be transferred except to another member of the credit union or to a prescribed person. 2007, c. 7, Sched. 7, s. 47.

Same

(2)  The transfer of a security that is permitted under subsection (1) shall be made in the prescribed manner and subject to the prescribed conditions. 2007, c. 7, Sched. 7, s. 47.

Same

(3)  The transfer of a security that is permitted under subsection (1) is effective when the transfer is recorded in the register under section 230. 2007, c. 7, Sched. 7, s. 47.

See: 2007, c. 7, Sched. 7, ss. 47, 192 (2).

Offering Statement

Selling securities

75.  (1)  A credit union may sell its securities to a member or accept from a member, directly or indirectly, consideration for its securities if,

(a) the credit union has obtained a receipt under section 78 for an offering statement respecting the securities and the receipt has not been revoked or expired; or

(b) the credit union has provided the Superintendent with a copy of receipts from the Ontario Securities Commission under the Securities Act for a preliminary prospectus and a prospectus respecting the offering of the securities. 1994, c. 11, s. 75 (1); 1997, c. 28, s. 53.

When Securities Act does not apply

(2)  The Securities Act does not apply to securities sold or disposed of by a credit union pursuant to a receipt, under section 78, for an offering statement. 1994, c. 11, s. 75 (2).

Exception

(3)  Subsection (1) and the Securities Act do not apply with respect to the issuance of,

(a) membership shares; or

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (a) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 48 and the following substituted:

(a) membership shares;

See: 2007, c. 7, Sched. 7, ss. 48, 192 (2).

(b) shares, other than membership shares, under section 65 or 66. 1994, c. 11, s. 75 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (b) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 48 and the following substituted:

(b) patronage shares; or

(c) shares under section 65 or 66.

See: 2007, c. 7, Sched. 7, ss. 48, 192 (2).

Interpretation

(4)  When, in subsection (1), credit union is read to mean league, a member of a league includes a member of a credit union that is a member of the league. 1994, c. 11, s. 75 (4).

Permitted sellers

76.  Securities sold under the circumstances described in clause 75 (1) (a) may be sold by,

(a) the directors, officers and employees of the issuing credit union;

(b) in the case of an issuing league, the directors, officers and employees of the league or of a credit union that is a member of the league; or

(c) a person registered under the Securities Act as a securities dealer, investment dealer or broker. 1994, c. 11, s. 76.

Note: On a day to be named by proclamation of the Lieutenant Governor, the French version of clause (c) is re-enacted by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 49. See: 2007, c. 7, Sched. 7, ss. 49, 192 (2).

Offering statement

77.  (1)  Application for a receipt for an offering statement is made by filing with the Superintendent a copy of the offering statement and paying the applicable fee. 1994, c. 11, s. 77 (1); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 50 (1) and the following substituted:

Offering statement

(1)  Application for a receipt for an offering statement is made by filing with the Superintendent a copy of the offering statement and paying the fee established by the Minister. 2007, c. 7, Sched. 7, s. 50 (1).

See: 2007, c. 7, Sched. 7, ss. 50 (1), 192 (2).

Contents

(2)  The offering statement must contain such information as may be prescribed and must be in a form approved by the Superintendent. 1994, c. 11, s. 77 (2); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 50 (1) and the following substituted:

Contents

(2)  The offering statement must contain such information as may be prescribed. 2007, c. 7, Sched. 7, s. 50 (1).

See: 2007, c. 7, Sched. 7, ss. 50 (1), 192 (2).

Standard of disclosure

(3)  The offering statement must provide full, true and plain disclosure of all material facts relating to the securities that the credit union proposes to issue. 1994, c. 11, s. 77 (3).

Certificate

(4)  The offering statement must be accompanied by the disclosure certificate in a form approved by the Superintendent signed by the chief executive officer and the chief financial officer of the credit union and by the chair of the board. 1994, c. 11, s. 77 (4); 1997, c. 19, s. 5 (3); 1999, c. 12, Sched. I, s. 2 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 50 (2) and the following substituted:

Certificate

(4)  The offering statement must be accompanied by a disclosure certificate signed by the chair of the board and the chief executive officer, certifying that the offering statement satisfies the requirements of subsections (2) and (3). 2007, c. 7, Sched. 7, s. 50 (2).

See: 2007, c. 7, Sched. 7, ss. 50 (2), 192 (2).

Additional material

(5)  The Superintendent may require,

(a) the credit union to provide additional documents, reports and other material; and

(b) that the information contained in the material referred to in clause (a) form part of the offering statement. 1994, c. 11, s. 77 (5); 1997, c. 28, s. 53.

Examination

(6)  Before issuing a receipt, the Superintendent may require the credit union to permit an examination of its affairs, at its own expense, by a person authorized in writing by the Superintendent. 1994, c. 11, s. 77 (6); 1997, c. 28, s. 53.

Receipt for offering statement

78.  (1)  The Superintendent shall issue a receipt for an offering statement unless it appears to him or her that,

(a) the statement or any document accompanying it,

(i) fails to comply in any substantial respect with this Act or the regulations,

(ii) contains any statement, promise, estimate or forecast that is misleading, false or deceptive,

(iii) contains an extract from an opinion or statement of an expert that does not fairly represent the opinion or statement, or

(iv) conceals or omits to state any material facts necessary in order to make any statement contained in the offering statement not misleading in light of the circumstances in which it was made;

(b) the proceeds from the sale of the securities are insufficient, together with the other resources of the credit union, to accomplish the purpose of the issue that is stated in the offering statement; or

(c) it would not be in the public interest to issue a receipt for the offering statement. 1994, c. 11, s. 78 (1); 1997, c. 28, s. 53.

Same

(2)  The Superintendent may refuse to issue or may revoke a receipt for an offering statement in any of the following circumstances:

1. The credit union is not complying with section 84.

2. The credit union is under the supervision of a stabilization authority.

3. The credit union is under the administration of the deposit insurer. 1994, c. 11, s. 78 (2); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 51 and the following substituted:

Refusal to issue, revocation

(2)  The Superintendent may refuse to issue or may revoke a receipt for an offering statement in any of the following circumstances:

1. The credit union is in contravention of section 84.

2. The credit union is subject to the supervision of the Corporation or under the administration of the Corporation. 2007, c. 7, Sched. 7, s. 51.

See: 2007, c. 7, Sched. 7, ss. 51, 192 (2).

Same

(3)  Before refusing to issue a receipt, the Superintendent shall give the applicant an opportunity to be heard. 1994, c. 11, s. 78 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 51 and the following substituted:

Same

(3)  Before refusing to issue a receipt or revoking a receipt, the Superintendent shall give the applicant an opportunity to make written submissions. 2007, c. 7, Sched. 7, s. 51.

See: 2007, c. 7, Sched. 7, ss. 51, 192 (2).

Same

(4)  A decision to refuse to issue a receipt must be given in writing and must include the reasons for the refusal. 1994, c. 11, s. 78 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 51 and the following substituted:

Same

(4)  A decision to refuse to issue a receipt or a decision to revoke a receipt must be given in writing and must include the reasons for the refusal or revocation. 2007, c. 7, Sched. 7, s. 51.

See: 2007, c. 7, Sched. 7, ss. 51, 192 (2).

Expiry of receipt

(5)  A receipt for an offering statement expires six months after it is issued. 1994, c. 11, s. 78 (5).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 51 and the following substituted:

Expiry of receipt

(5)  A receipt for an offering statement expires on the earlier of,

(a) the date that is six months after the day it is issued; and

(b) the date on which the offering of securities contemplated by the offering statement for which the receipt is granted is closed in accordance with the offering statement. 2007, c. 7, Sched. 7, s. 51.

See: 2007, c. 7, Sched. 7, ss. 51, 192 (2).

Renewal of receipt

79.  (1)  Application for renewal of the receipt for an offering statement may be made by filing with the Superintendent a copy of the statement in a form approved by the Superintendent and paying the applicable fee. 1994, c. 11, s. 79 (1); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 52 and the following substituted:

Renewal of receipt

(1)  Application for renewal of the receipt for an offering statement may be made by filing an application with the Superintendent with a copy of the statement and paying the fee established by the Minister. 2007, c. 7, Sched. 7, s. 52.

See: 2007, c. 7, Sched. 7, ss. 52, 192 (2).

Time for application

(2)  Application for renewal must be made before the receipt for the offering statement expires. 1994, c. 11, s. 79 (2).

Receipt

(3)  Section 78 applies, with necessary modifications, with respect to the renewal of a receipt. 1994, c. 11, s. 79 (3).

Material change

80.  (1)  If there is a material change in the facts set out in an offering statement, the credit union shall file with the Superintendent,

(a) an amendment to the offering statement, if no receipt has been issued for the statement; or

(b) a statement of material change, if a receipt has been issued for the offering statement and the receipt has not been revoked or expired. 1994, c. 11, s. 80 (1); 1997, c. 28, s. 53.

Time

(2)  The credit union shall give the Superintendent the amendment or statement of material change promptly and, in any event, within ten days after the date on which the material change occurred. 1994, c. 11, s. 80 (2); 1997, c. 28, s. 53.

Notice to persons

(3)  The credit union shall give a copy of the amendment or statement of material change to every person to whom it gave a copy of the offering statement. 1994, c. 11, s. 80 (3).

Replacement statement

(4)  A credit union may, and if requested to do so by the Superintendent, shall file with the Superintendent a new offering statement instead of one or more statements of material change. 1994, c. 11, s. 80 (4); 1997, c. 28, s. 53.

Contents

(5)  Sections 77 and 78 apply with respect to a statement of material change as if it were an offering statement.

Exclusion

(6)  In this section,

“material change” does not include such types of change as may be prescribed. 1994, c. 11, s. 80 (5, 6).

Distribution of statements

81.  (1)  A credit union shall give a copy of an offering statement or statement of material change to each member that requests a copy of one. 1994, c. 11, s. 81 (1).

Same

(2)  A person who offers a security in a credit union for sale shall give a copy of the offering statement and statement of material change, if any, to a prospective purchaser upon request and to a purchaser. 1994, c. 11, s. 81 (2).

Withdrawal from purchase

(3)  An agreement of purchase and sale in respect of securities is not binding on the purchaser if the person from whom the purchaser purchases the security receives written or telegraphic notice of the purchaser’s intention not to be bound by the agreement not later than midnight on the second day, exclusive of Saturdays and holidays after receipt by the purchaser of the latest offering statement. 1994, c. 11, s. 81 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 53 and the following substituted:

Withdrawal from purchase

(3)  An agreement of purchase and sale in respect of securities is not binding on the purchaser if the person from whom the purchaser has agreed to purchase the security receives written notice of the purchaser’s intention not to be bound by the agreement not later than midnight on the second business day after receipt by the purchaser of the latest offering statement and any statement of material change. 2007, c. 7, Sched. 7, s. 53.

Same

(4)  Subsection (3) applies with necessary modifications in respect of a person who is subscribing for securities to be issued by a credit union. 2007, c. 7, Sched. 7, s. 53.

Receipt by fax, etc., considered written notice

(5)  Without limiting how else a written notice may be given, a written notice is considered to be received by a recipient for the purposes of subsection (3) if the recipient receives the notice by facsimile or electronic means. 2007, c. 7, Sched. 7, s. 53.

Business day

(6)  In subsection (3),

“business day” means a day that is not,

(a) Saturday, or

(b) Sunday or any other holiday, other than Easter Monday and Remembrance Day. 2007, c. 7, Sched. 7, s. 53.

See: 2007, c. 7, Sched. 7, ss. 53, 192 (2).

Effect of misrepresentation

82.  (1)  If an offering statement or a statement of material change contains a misrepresentation, a purchaser of a security shall be deemed to have relied upon the misrepresentation if it was a misrepresentation when the purchase was made. 1994, c. 11, s. 82 (1).

Exception

(2)  Subsection (1) does not apply if the purchaser knew about the misrepresentation when purchasing the security. 1994, c. 11, s. 82 (2).

Right of action

(3)  The purchaser has a right of action for damages against,

(a) the credit union;

(b) every person, other than an employee of a credit union, who sells the security on behalf of the credit union;

(c) every director of the credit union at the time the offering statement or statement of material change was filed with the Superintendent;

(d) every person whose consent has been filed pursuant to a requirement of the regulations but only with respect to reports, opinions or statements that have been made by them; and

(e) every person who signed the offering statement or statement of material change other than the persons included in clauses (a) to (d). 1994, c. 11, s. 82 (3); 1997, c. 28, s. 53.

Same

(4)  If the purchaser purchased the security from a credit union, the purchaser may elect to exercise a right of rescission against the credit union, in which case the purchaser has no right of action for damages against the credit union. 1994, c. 11, s. 82 (4).

Defence

(5)  A person who signed the disclosure certificate in a form approved by the Superintendent or a director is not liable under this section if he or she proves one of the following:

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 54 (1) by striking out the portion before paragraph 1 and substituting the following:

Defence

(5)  A person who signed the disclosure certificate required under subsection 77 (4) or a director is not liable under this section if the person proves one of the following:

See: 2007, c. 7, Sched. 7, ss. 54 (1), 192 (2).

1. The offering statement or statement of material change was filed with the Superintendent without the person’s knowledge or consent. As soon as the person became aware that it had been filed with the Superintendent, the person advised the Superintendent that it was filed with the Superintendent without the person’s knowledge or consent.

2. The person was not aware of the misrepresentation when the offering statement or material change statement was filed with the Superintendent. After the receipt for the statement was issued but before the purchaser bought the security, the person immediately after he or she became aware of the misrepresentation advised the Superintendent that he or she withdrew consent to filing the statement with the Superintendent.

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 2 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 54 (2) and the following substituted:

2. The person was not aware of the misrepresentation when the offering statement or material change statement was filed with the Superintendent. After the receipt for the statement was issued but before the purchaser bought the security, the person immediately after the person became aware of the misrepresentation advised the Superintendent that the person withdrew consent to the filing of the statement with the Superintendent.

See: 2007, c. 7, Sched. 7, ss. 54 (2), 192 (2).

3. The person had no reasonable grounds to believe, and did not believe, that there had been a misrepresentation. 1994, c. 11, s. 82 (5); 1997, c. 19, s. 5 (3); 1997, c. 28, s. 53; 1999, c. 12, Sched. I, s. 2 (4).

Interpretation

(6)  In this section,

“misrepresentation” means,

(a) an untrue statement of material fact, or

(b) an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. 1994, c. 11, s. 82 (6).

Restrictions on transfer of securities

83.  (1)  Securities issued pursuant to clause 75 (1) (a) may not be transferred except to another member of the credit union or to a prescribed person. 1994, c. 11, s. 83 (1).

Same

(2)  A transfer of securities under subsection (1) shall be made in the manner and subject to the prescribed conditions. 1994, c. 11, s. 83 (2).

Same

(3)  A transfer of securities under subsection (1) is effective when the transfer is recorded in the credit union’s register of securities. 1994, c. 11, s. 83 (3).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 83 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 55 and the following substituted:

Restriction on Commission for Purchase or Sale

No commission by directors, officers, employees

83.  None of the following persons shall charge or accept payment of a commission on the purchase or sale of a security of a credit union:

1. The directors, officers and employees of the credit union.

2. The related persons of a director, officer or employee of the credit union.

3. If the credit union is a member of a league, the directors, officers and employees of the league. 2007, c. 7, Sched. 7, s. 55.

See: 2007, c. 7, Sched. 7, ss. 55, 192 (2).

PART VI
CAPITAL AND LIQUIDITY

Adequacy of capital and liquidity

84.  (1)  A credit union shall maintain, in relation to its operations, adequate and appropriate forms of capital and liquidity. 1994, c. 11, s. 84 (1).

Same

(2)  A credit union shall comply with the regulations governing adequate capital and liquidity. 1994, c. 11, s. 84 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 84 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 56 by adding the following subsections:

Forming of groups relating to capital requirements

(3)  Subject to the regulations and with the approval of the Corporation, two or more credit unions may enter into an agreement with a league to form a group for the purposes of assisting the credit unions in satisfying the requirements of this section relating to capital. 2007, c. 7, Sched. 7, s. 56.

Revocation of approval

(4)  The Corporation may, by order, revoke its approval under subsection (3) on a prescribed ground. 2007, c. 7, Sched. 7, s. 56.

Procedural rules

(5)  Section 240.1 applies with respect to an order under subsection (4). 2007, c. 7, Sched. 7, s. 56.

See: 2007, c. 7, Sched. 7, ss. 56, 192 (2).

Additional requirements

85.  (1)  The Superintendent may order a credit union,

(a) to increase its capital; or

(b) to provide additional liquidity in such forms and amounts as the Superintendent may require. 1994, c. 11, s. 85 (1); 1997, c. 28, s. 53.

Circumstances

(2)  Despite a credit union’s compliance with the regulations governing adequate capital and liquidity, the Superintendent may impose the requirements set out in subsection (1),

(a) if there are reasonable grounds to believe that the credit union is not complying with the requirements of this Act and the regulations concerning the management of risk in making loans and investments and in the general management of credit union business;

(b) if the Superintendent considers that imposing the requirement is necessary to protect the interests of members, shareholders or depositors; or

(c) if the Superintendent considers that imposing the requirement is necessary to ensure the financial security and integrity of the credit union. 1994, c. 11, s. 85 (2); 1997, c. 28, s. 53.

Compliance

(3)  The credit union shall comply with the requirement within such time as the Superintendent specifies in the order. 1994, c. 11, s. 85 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 85 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 57 and the following substituted:

Capital and liquidity policies

85.  (1)  A credit union shall establish capital and liquidity policies for the credit union consistent with the regulations governing adequate capital and liquidity and the credit union shall adhere to those policies. 2007, c. 7, Sched. 7, s. 57.

Policies to be prudent

(2)  The capital and liquidity policies of a credit union shall consist of policies, standards and procedures that a reasonable and prudent person would apply in order to ensure the financial soundness of the credit union, avoid undue risk of loss and obtain a reasonable return. 2007, c. 7, Sched. 7, s. 57.

Approval and review by board

(3)  The capital and liquidity policies of a credit union are subject to the approval of the board and the board shall review the policies at least once each year. 2007, c. 7, Sched. 7, s. 57.

Order if policies inadequate, etc.

(4)  If the Corporation considers the capital and liquidity policies of the credit union to be inadequate or imprudent, the Corporation may order the credit union to amend them in accordance with the order. 2007, c. 7, Sched. 7, s. 57.

Procedural rules

(5)  Section 240.1 applies with respect to an order under this section. 2007, c. 7, Sched. 7, s. 57.

Appeal to Tribunal

(6)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4. 2007, c. 7, Sched. 7, s. 57.

See: 2007, c. 7, Sched. 7, ss. 57, 192 (2).

Variation of requirements

86.  (1)  A credit union may apply to the Superintendent for a variation of the requirements under section 84. 1994, c. 11, s. 86 (1); 1997, c. 28, s. 53.

Application

(2)  An application must be in a form approved by the Superintendent and must describe how and when the credit union will meet the requirements under section 84. 1994, c. 11, s. 86 (2); 1997, c. 28, s. 53.

Variation

(3)  The Superintendent may grant the variation subject to any terms he or she considers appropriate if he or she considers that granting the variation is in the interest of the members of the credit union and that the credit union will meet the requirements under section 84 within a reasonable time. 1994, c. 11, s. 86 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 86 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 57 and the following substituted:

Additional requirements

86.  (1)  The Corporation may order a credit union,

(a) to increase its capital; or

(b) to provide additional liquidity in such forms and amounts as the Corporation may require. 2007, c. 7, Sched. 7, s. 57.

Circumstances

(2)  Despite a credit union’s compliance with the regulations governing adequate capital and liquidity, the Corporation may impose the requirements set out in subsection (1),

(a) if there are reasonable grounds to believe that the credit union is not complying with the requirements of this Act and the regulations concerning the management of risk in making loans and investments and in the general management of credit union business;

(b) if the Corporation considers that imposing the requirement is necessary to protect the interests of members, shareholders or depositors; or

(c) if the Corporation considers that imposing the requirement is necessary to ensure the financial security and integrity of the credit union. 2007, c. 7, Sched. 7, s. 57.

Compliance

(3)  The credit union shall comply with the order within such time as the Corporation specifies in the order. 2007, c. 7, Sched. 7, s. 57.

Time for compliance if member of a group

(4)  If the credit union is in a group formed under subsection 84 (3), the time for compliance specified under subsection (3) for an order under clause (1) (a) must be at least 30 days after the copy of the order is given to the credit union under section 240.2. 2007, c. 7, Sched. 7, s. 57.

Procedural rules

(5)  Section 240.1 applies with respect to an order under this section. 2007, c. 7, Sched. 7, s. 57.

Appeal to Tribunal

(6)  The credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4. 2007, c. 7, Sched. 7, s. 57.

See: 2007, c. 7, Sched. 7, ss. 57, 192 (2).

Appeal of decision

87.  (1)  A credit union may appeal a decision of the Superintendent under section 85 by making written submissions to the Tribunal, within 15 days after receiving the Superintendent’s decision. 1997, c. 28, s. 56.

No automatic stay on appeal

(2)  An appeal of the Superintendent’s decision does not stay the operation of the decision. 1994, c. 11, s. 87 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 87 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 57 and the following substituted:

Variation of requirements

87.  (1)  A credit union may apply to the Corporation for a variation of the requirements under section 84. 2007, c. 7, Sched. 7, s. 57.

Application

(2)  An application must be in a form approved by the Corporation and must describe how and when the credit union will meet the requirements under section 84. 2007, c. 7, Sched. 7, s. 57.

Variation

(3)  The Corporation may grant the variation subject to any terms it considers appropriate if it considers that granting the variation is in the interest of the members of the credit union and that the credit union will meet the requirements under section 84 within a reasonable time. 2007, c. 7, Sched. 7, s. 57.

See: 2007, c. 7, Sched. 7, ss. 57, 192 (2).

Valuation of asset

88.  If the Superintendent has appraised the value of an asset held by a credit union or a subsidiary and the value determined by the Superintendent varies materially from the value placed by the credit union or the subsidiary on the asset, the Superintendent shall send to the credit union, its auditor, its audit committee and the stabilization authority for the credit union a written notice of the value of the asset as determined by the Superintendent. 1994, c. 11, s. 88; 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 88 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 57 and the following substituted:

Valuation of asset

88.  If the Corporation has appraised the value of an asset held by a credit union or a subsidiary and the value determined by the Corporation varies materially from the value placed by the credit union or the subsidiary on the asset, the Corporation shall send to the credit union, its auditor and its audit committee a written notice of the value of the asset as determined by the Corporation. 2007, c. 7, Sched. 7, s. 57.

See: 2007, c. 7, Sched. 7, ss. 57, 192 (2).

Report re adequacy

89.  A credit union shall provide a report in a form approved by the Superintendent concerning its compliance with section 84 to such persons and at such times as required by the Superintendent. 1994, c. 11, s. 89; 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 89 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 57 and the following substituted:

Report re adequacy

89.  A credit union shall provide a report in a form approved by the Corporation concerning its compliance with section 84 to such persons and at such times as required by the Corporation. 2007, c. 7, Sched. 7, s. 57.

Notification if credit union insolvent

89.1  If the Corporation believes that a credit union is unable to provide for the payment of its liabilities as they become due, the Corporation shall immediately notify the Superintendent in writing. 2007, c. 7, Sched. 7, s. 57.

See: 2007, c. 7, Sched. 7, ss. 57, 192 (2).

Provision for losses and accrued interest

90.  A credit union shall make monthly provision for doubtful loans and establish reserves as prescribed. 1994, c. 11, s. 90; 1999, c. 12, Sched. I, s. 2 (5).

PART VII
GOVERNING THE CREDIT UNION

Directors

Qualifications of directors

91.  Only a natural person who meets the following criteria is eligible to be a director of a credit union:

1. He or she is a member of the credit union.

2. He or she is at least eighteen years of age.

3. He or she is a Canadian citizen or a person lawfully admitted to Canada for permanent residency who is ordinarily resident in Canada. 1994, c. 11, s. 91.

Disqualified individuals

92.  (1)  The following individuals are disqualified from being directors of a credit union:

1. One whose membership in any credit union has been terminated, other than voluntarily.

2. One who a court has decided is of unsound mind.

3. One who is an undischarged bankrupt or who has been discharged as a bankrupt in the five years preceding the date on which he or she may be elected as director.

4. One who is more than ninety days in arrears in the payment of a debt owed to the credit union unless the credit union has agreed to extend the time for repayment.

5. One who has been convicted, in the five years preceding the date on which he or she may be elected as a director, of an offence described in subsection (4) and who has not received a pardon for the offence.

6. One whose membership in a professional association has been terminated, in the five years preceding the date on which he or she may be elected as director, for professional misconduct.

7. An employee of the credit union or a league in which the credit union is a member, or an employee’s spouse, parent or child.

8. A professional adviser to the credit union.

9. An employee of the deposit insurer or stabilization authority for the credit union.

10. A public servant employed under Part III of the Public Service of Ontario Act, 2006 whose employment duties include regulating credit unions.

11. One who does not complete a prescribed training program as required by the regulations. 1994, c. 11, s. 92 (1); 1999, c. 6, s. 19 (3); 2005, c. 5, s. 18 (3); 2006, c. 35, Sched. C, s. 21.

Exception

(2)  Despite paragraph 7 of subsection (1), an individual is not disqualified from becoming a director solely because,

(a) he or she provides, without remuneration, services to the credit union that are ordinarily provided by an employee; or

(b) he or she is the parent or child of an employee of the credit union and the employee is not an officer of the credit union. 1994, c. 11, s. 92 (2).

(3)  Spent: 1994, c. 11, s. 92 (3).

Type of offence

(4)  The offence must be one that,

(a) is related to the qualifications, functions or duties of a director of a body corporate;

(b) involves theft or fraud punishable by a term of imprisonment for five years or more;

(c) involves a contravention or failure to comply with this Act, a predecessor of this Act or an Act governing a subsidiary of the credit union; or

(d) involves a contravention or failure to comply with the Securities Act. 1994, c. 11, s. 92 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 92 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 58 (1) and the following substituted:

Disqualified individuals

92.  (1)  The following individuals are disqualified from being directors of a credit union:

1. One whose membership in any credit union has been terminated, other than voluntarily.

2. One who a court has decided is of unsound mind.

3. One who is an undischarged bankrupt or who has been discharged as a bankrupt in the five years preceding the date on which he or she may be elected as director.

4. One who is unable to obtain a bond of an insurer licensed under the Insurance Act to write surety and fidelity insurance.

5. One who is more than 90 days in arrears in the payment of a debt owed to the credit union unless the credit union has agreed to extend the time for repayment.

6. One who is a listed person within the meaning of the United Nations Suppression of Terrorism Regulations under the United Nations Act (Canada).

7. One who has been convicted, in the five years preceding the date on which he or she may be elected as a director, of an offence described in subsection (3) and who has not received a pardon for the offence.

8. One whose membership in a professional association has been terminated, in the five years preceding the date on which he or she may be elected as director, for professional misconduct.

9. An employee of the credit union or a league in which the credit union is a member or his or her spouse, parent or child.

10. A professional advisor who provides services to the credit union in his or her professional capacity or who has provided such services in the three years preceding the date on which he or she may be elected as a director.

11. An employee of the Corporation.

12. A public servant employed in regulating credit unions.

Note: On a day to be named by proclamation of the Lieutenant Governor, paragraph 12 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 58 (2) and the following substituted:

12. A public servant employed under Part III of the Public Service of Ontario Act, 2006 whose employment duties include regulating credit unions.

See: 2007, c. 7, Sched. 7, ss. 58 (2), 192 (2).

13. One who has not met the training requirements or qualifications for directors established by the credit union.

14. One who has not met any reasonable condition or qualification set out in the by-laws of the credit union. 2007, c. 7, Sched. 7, s. 58 (1).

Exception

(2)  An individual is not an employee for the purposes of paragraph 9 of subsection (1) solely because he or she provides, without remuneration, services to the credit union or league that are ordinarily provided by an employee. 2007, c. 7, Sched. 7, s. 58 (1).

Type of offence

(3)  An offence referred to in paragraph 7 of subsection (1) is an offence that,

(a) is related to the qualifications, functions or duties of a director of a body corporate;

(b) involves theft or fraud;

(c) involves a contravention or failure to comply with this Act, a predecessor of this Act or an Act governing a subsidiary of the credit union; or

(d) involves a contravention or failure to comply with the Securities Act. 2007, c. 7, Sched. 7, s. 58 (1).

See: 2007, c. 7, Sched. 7, ss. 58 (1), 192 (2).

Number of directors

93.  (1)  A credit union may, by by-law, change the number of its directors. 1994, c. 11, s. 93 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 59 and the following substituted:

Number of directors

(1)  Subject to subsection (2), the number of directors shall be as provided in the by-laws. 2007, c. 7, Sched. 7, s. 59.

See: 2007, c. 7, Sched. 7, ss. 59, 192 (2).

Minimum

(2)  A credit union must have a minimum of five directors. 1994, c. 11, s. 93 (2).

Election of board

94.  (1)  Directors must be elected in the manner provided in the by-laws.

Election in rotation

(2)  The by-laws may provide for the election and retirement of directors in rotation.

Voting

(3)  A member who votes at an election of directors shall cast a number of votes equal to the number of directors to be elected but the member may not cast more than one vote for one candidate. 1994, c. 11, s. 94.

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 60 by adding the following sections:

Disclosure of interest by candidates

94.1  (1)  A person who is a candidate for director of a credit union shall disclose, before the election, everything the person would have to disclose under section 146 if the person were a director. 2007, c. 7, Sched. 7, s. 60.

Clarification, existing directors, etc.

(2)  For greater certainty,

(a) subsection (1) applies in relation to the re-election of a director as well as to the election of a person who is not already a director;

(b) the obligation to disclose under subsection (1) is in addition to any requirement to disclose under section 146 and applies even if a disclosure has already been made under that section; and

(c) a general notice described in subsection 146 (6) is not sufficient disclosure of an interest in a contract for the purposes of subsection (1). 2007, c. 7, Sched. 7, s. 60.

Disclosure to board

(3)  A disclosure required under subsection (1) shall be made in writing to the board of the credit union. 2007, c. 7, Sched. 7, s. 60.

Notice to members

(4)  The board shall give the members notice of the disclosure before the election is held. 2007, c. 7, Sched. 7, s. 60.

How notice to members given

(5)  The by-laws of the credit union may specify how the board shall give notice of the disclosure under subsection (4). 2007, c. 7, Sched. 7, s. 60.

Chair of board

94.2  The directors shall elect or appoint a chair of the board from among themselves. 2007, c. 7, Sched. 7, s. 60.

See: 2007, c. 7, Sched. 7, ss. 60, 192 (2).

Term of office, directors

95.  (1)  Directors hold office for such term as the by-laws provide. 1994, c. 11, s. 95 (1).

If election delayed

(2)  If an election is not held within the period set out in a credit union’s by-laws, the directors continue in office until their successors are elected. 1994, c. 11, s. 95 (2).

First directors

(3)  Each of the persons named as first directors in the articles is a director until replaced by a person duly elected or appointed in his or her stead. 1994, c. 11, s. 95 (3).

Maximum number

(4)  The by-laws may provide for a maximum number of consecutive terms for directors. 1994, c. 11, s. 95 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 61 and the following substituted:

Maximum number

(4)  The by-laws shall provide for a maximum number of consecutive terms for directors. 2007, c. 7, Sched. 7, s. 61.

See: 2007, c. 7, Sched. 7, ss. 61, 192 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, the Act is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 62 by adding the following section:

Term of office, chair

95.1  (1)  The chair of the board shall hold office for such term as the by-laws provide. 2007, c. 7, Sched. 7, s. 62.

Maximum number

(2)  The by-laws shall provide for a maximum number of consecutive terms for the chair of the board. 2007, c. 7, Sched. 7, s. 62.

See: 2007, c. 7, Sched. 7, ss. 62, 192 (2).

Quorum

96.  A majority of the board constitutes a quorum. 1994, c. 11, s. 96.

Vacancies

97.  (1)  If a vacancy occurs in the board and a quorum of directors remains, the directors remaining in office may appoint a qualified individual to fill the vacancy until the next annual meeting of the credit union. 1994, c. 11, s. 97 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 63 and the following substituted:

Vacancies

(1)  If a vacancy occurs in the board and a quorum of directors remains, the directors remaining in office may appoint a qualified individual to fill the vacancy until the next annual meeting of the members of the credit union. 2007, c. 7, Sched. 7, s. 63.

See: 2007, c. 7, Sched. 7, ss. 63, 192 (2).

Same, no quorum

(2)  If there is not a quorum of directors in office, the remaining directors shall promptly call a general meeting of the members to fill the vacancies; in default of this or if there are no remaining directors, any member may call the meeting. 1994, c. 11, s. 97 (2).

Ceasing to hold office

98.  (1)  A director ceases to hold office,

(a) at the end of the annual meeting at which his or her term of office expires or upon the election of a successor;

(b) when he or she dies or resigns;

(c) when he or she becomes ineligible to hold office under section 91 or 92;

(d) when he or she is removed from office under section 99, 100 or 101;

(e) when the deposit insurer replaces the board and appoints a person to assume the powers of the board under subsection 295 (1). 1994, c. 11, s. 98 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, clause (e) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 64 (1) and the following substituted:

(e) when the Corporation replaces the board and appoints a person to assume the powers of the board under subsection 295 (1).

See: 2007, c. 7, Sched. 7, ss. 64 (1), 192 (2).

Date of resignation

(2)  A director’s resignation becomes effective when the credit union receives the director’s written resignation or at the time specified in the resignation, whichever is later. 1994, c. 11, s. 98 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 98 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 64 (2) by adding the following subsection:

Notice if no quorum of directors

(3)  The credit union shall notify the Superintendent if, after a director ceases to hold office, there is not a quorum of directors in office. 2007, c. 7, Sched. 7, s. 64 (2).

See: 2007, c. 7, Sched. 7, ss. 64 (2), 192 (2).

Removal by board

99.  If a director fails to attend three consecutive board meetings without, in the opinion of the board, reasonable cause or fails to perform any of the duties allotted to him or her as a director, the board may, by resolution, declare the director’s position vacant. 1994, c. 11, s. 99.

Removal by members

100.  (1)  The members of a credit union may remove a director before his or her term of office expires. 1994, c. 11, s. 100 (1).

Vote

(2)  A director is removed from office by a special resolution passed at a general meeting of the members duly called for that purpose. 2002, c. 18, Sched. H, s. 3 (4).

Notice

(3)  The notice calling the meeting must state that the purpose of the meeting is to remove the director named in the notice. 1994, c. 11, s. 100 (3).

Right to make representations

(4)  At the meeting, the director is entitled to make such representations about the resolution for his or her removal. 1994, c. 11, s. 100 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 65 (1) and the following substituted:

Right to make representations

(4)  At the meeting, the director is entitled to speak to the resolution calling for his or her removal and may do so personally or through legal counsel or an agent. 2007, c. 7, Sched. 7, s. 65 (1).

See: 2007, c. 7, Sched. 7, ss. 65 (1), 192 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 65 (2) by striking out “through legal counsel or an agent” and substituting “through a person authorized under the Law Society Act to represent the member”. See: 2007, c. 7, Sched. 7, ss. 65 (2), 192 (2).

Right to representation

(5)  The director may be represented at the meeting by a person authorized under the Law Society Act to represent him or her. 2006, c. 21, Sched. C, s. 106 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, subsection 65 (1). See: 2007, c. 7, Sched. 7, ss. 65 (1), 192 (2).

Replacement

(6)  If the members remove the director from office, they shall elect another director at the same meeting to hold office in his or her stead for the remainder of his or her term of office. 1994, c. 11, s. 100 (6).

Removal by Superintendent

101.  (1)  This section applies if the Superintendent has reasonable grounds to believe that a director of a credit union may not be fit, as to character or competence, to hold office as a director. 1994, c. 11, s. 101 (1); 1997, c. 28, s. 53.

Request for material

(2)  The Superintendent may require the credit union to give him or her such information and material as the Superintendent may consider necessary to decide upon the fitness of an individual to be a director and the credit union shall do so within twenty days after the request is made. 1994, c. 11, s. 101 (2); 1997, c. 28, s. 53.

Notice of hearing

(3)  The Superintendent must notify the director and the credit union within forty-five days after the request if the Superintendent intends to hold a hearing concerning the fitness of the director to hold office. 1994, c. 11, s. 101 (3); 1997, c. 28, s. 53.

Vacancy declared

(4)  After giving the credit union and director an opportunity to be heard, the Superintendent may declare the director’s position vacant if the Superintendent determines that the director is not fit to hold office. 1994, c. 11, s. 101 (4); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, section 101 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 66 and the following substituted:

Removal by Superintendent

101.  (1)  The Superintendent may, by order, remove a director of a credit union if the Superintendent is of the opinion that the director is not suitable to hold office as a director on the basis of the character or competence of the director. 2007, c. 7, Sched. 7, s. 66.

Risk of prejudice

(2)  In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the members, depositors and creditors of the credit union have been or are likely to be prejudiced by the director’s holding office. 2007, c. 7, Sched. 7, s. 66.

Procedural rules

(3)  Section 240.1 applies with respect to an order under this section. 2007, c. 7, Sched. 7, s. 66.

Appeal to Tribunal

(4)  The director who is subject to an order under this section may appeal the order to the Tribunal in accordance with section 240.4. 2007, c. 7, Sched. 7, s. 66.

See: 2007, c. 7, Sched. 7, ss. 66, 192 (2).

Statement re opposition

102.  (1)  In the following circumstances, a director is entitled to give the credit union a written statement setting out why he or she opposes any proposed action or resolution by the directors or members:

1. If the director learns of a meeting of the board or members called for the purpose of removing him or her from office.

2. If a vacancy in the director’s position is about to be filled following his or her resignation or removal.

3. If the director’s term of office has expired or is about to expire. 1994, c. 11, s. 102 (1).

Circulation of statement

(2)  The credit union shall, within thirty days after receipt of the statement, send a copy of the statement to the Superintendent and a notice to every member stating that a copy of the statement is available on request. 1994, c. 11, s. 102 (2); 1997, c. 28, s. 53.

Same

(3)  In addition to a delivery permitted under section 335, a notice under this section may be delivered by publishing the notice in a newspaper that circulates in the community in which the head office of the credit union is located. 1994, c. 11, s. 102 (3).

Immunity

(4)  A credit union and a person acting on its behalf does not incur any liability by reason only of sending the statement as required by subsection (2). 1994, c. 11, s. 102 (4).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 102 is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 66 and the following substituted:

Statement re opposition

102.  (1)  A director who opposes any proposed action or resolution by the directors or members is entitled to give the credit union a written statement setting out why he or she opposes the proposed action or resolution. 2007, c. 7, Sched. 7, s. 66.

Circulation of statement

(2)  The credit union shall, within 30 days after receipt of the statement, send a copy of the statement to the Superintendent. 2007, c. 7, Sched. 7, s. 66.

Immunity

(3)  A credit union and a person acting on its behalf do not incur any liability by reason only of sending the statement as required by subsection (2). 2007, c. 7, Sched. 7, s. 66.

See: 2007, c. 7, Sched. 7, ss. 66, 192 (2).

Statement on resignation

103.  (1)  A director who resigns is entitled to give the credit union a written statement setting out his or her reasons for resigning. 1994, c. 11, s. 103 (1).

Information to Superintendent

(2)  The Superintendent may require the director to give him or her such information relating to the resignation as the Superintendent specifies and the director shall promptly do so. 1994, c. 11, s. 103 (2); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 67 and the following substituted:

Information to Superintendent and Corporation

(2)  The Superintendent or the Corporation may require the director to provide such information relating to the resignation as the Superintendent or the Corporation, as the case may be, specifies and the director shall promptly do so. 2007, c. 7, Sched. 7, s. 67.

See: 2007, c. 7, Sched. 7, ss. 67, 192 (2).

Statement re disagreement

(3)  If a director resigns as a result of a disagreement with the other directors or the officers of a credit union, the director shall give the credit union and the Superintendent a written statement setting out the nature of the disagreement. 1994, c. 11, s. 103 (3); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (3) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 67 and the following substituted:

Statement re disagreement

(3)  If a director resigns as a result of a disagreement with the other directors or the officers of a credit union, the director shall give the credit union, the Superintendent and the Corporation a written statement setting out the nature of the disagreement. 2007, c. 7, Sched. 7, s. 67.

See: 2007, c. 7, Sched. 7, ss. 67, 192 (2).

Circulation of statement

(4)  The credit union shall, within thirty days after receipt of the statement under subsection (3), send a copy of the statement to the Superintendent and a notice to every member stating that a copy of the statement is available on request. 1994, c. 11, s. 103 (4); 1997, c. 28, s. 53.

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (4) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 67 and the following substituted:

Advising members that statement available

(4)  The credit union shall, within 30 days after receipt of the statement under subsection (3), advise every member that a copy of the statement is available on request. 2007, c. 7, Sched. 7, s. 67.

See: 2007, c. 7, Sched. 7, ss. 67, 192 (2).

Same

(5)  In addition to a delivery permitted under section 335, a notice under this section may be delivered by publishing the notice in a newspaper that circulates in the community in which the head office of the credit union is located. 1994, c. 11, s. 103 (5).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (5) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 67 and the following substituted:

Method of advising members

(5)  The advising of the members under subsection (4) may be by deliveries permitted under section 335 or by such other method as is provided for in the credit union’s by-laws. 2007, c. 7, Sched. 7, s. 67.

See: 2007, c. 7, Sched. 7, ss. 67, 192 (2).

Immunity

(6)  A credit union and a person acting on its behalf does not incur any liability by reason only of sending the statement as required by subsection (4). 1994, c. 11, s. 103 (6).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (6) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 67 and the following substituted:

Duty to give copy of statement

(6)  The credit union shall give a copy of the statement to every member who requests it. 2007, c. 7, Sched. 7, s. 67.

Immunity

(7)  A credit union and a person acting on its behalf do not incur any liability by reason only of advising the members under subsection (4) or giving a copy of the statement to a member. 2007, c. 7, Sched. 7, s. 67.

See: 2007, c. 7, Sched. 7, ss. 67, 192 (2).

Powers and Duties of the Board

Duties of the board

104.  (1)  The board shall manage or supervise the management of the business and affairs of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations or the by-laws. 1994, c. 11, s. 104 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (1) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 68 and the following substituted:

Duties of the board

(1)  The board shall manage or supervise the management of the business and affairs of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations, the by-laws of the Corporation respecting credit unions or the by-laws of the credit union. 2007, c. 7, Sched. 7, s. 68.

See: 2007, c. 7, Sched. 7, ss. 68, 192 (2).

Specific duties

(2)  Without limiting the generality of subsection (1), the directors shall,

(a) establish investment and lending policies, standards and procedures in accordance with section 190;

(b) establish procedures to resolve conflicts of interest, including techniques for the identification of potential conflict situations and for restricting the use of confidential information; and

(c) designate a committee of the board to monitor the procedures. 1994, c. 11, s. 104 (2).

Note: On a day to be named by proclamation of the Lieutenant Governor, subsection (2) is repealed by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 68 and the following substituted:

Board, etc., not to manage day to day activities

(2)  The board, a committee of the board or a director shall not directly manage, or be involved in, the day to day activities of the credit union. 2007, c. 7, Sched. 7, s. 68.

See: 2007, c. 7, Sched. 7, ss. 68, 192 (2).

First directors

(3)  The first directors of a credit union named in the articles have all the powers and duties and are subject to all the liabilities of directors. 1994, c. 11, s. 104 (3).

By-law powers

105.  (1)  The board may pass by-laws governing the conduct of the affairs of the credit union. 1994, c. 11, s. 105 (1).

Note: On a day to be named by proclamation of the Lieutenant Governor, section 105 is amended by the Statutes of Ontario, 2007, chapter 7, Schedule 7, section 69 by adding the following subsection:

Required matters

(1.1)  The by-laws of a credit union shall provide for the following matters:

1. The appointment of officers of the credit union and the establishment of their duties.

2. The calling of meetings of the board, including the minimum number of times the board must meet each financial year if the minimum number of times exceeds the prescribed minimum number of times, the place or places where meetings of the board may be held and the manner in which notice of the meetings must be given. 2007, c. 7, Sched. 7, s. 69.

See: 2007, c. 7, Sched. 7, ss. 69, 192 (2).

Same

(2)  The board shall pass by-laws, subject to this Act and the regulations, governing prescribed matters if they are not provided for by this Act or the regulations or set out in the articles. 1994, c. 11, s. 105 (2).

Limitation

(3)  By-laws that are contrary to this Act, the regulations or the articles of the credit union are void. 1994, c. 11, s. 105 (3).

Same

(4)  By-laws that relieve a person of obligations or requirements under this Act or the regulations are void. 1994, c. 11, s. 105 (4).

Restrictive by-laws

(5)  A by-law may impose greater restrictions in respect of a matter than are imposed under this Act or the regulations. 1994, c. 11, s. 105 (5).

Remuneration of directors

106.  The procedure for setting the remuneration of directors and members of committees shall be established by by-law. 1994, c. 11, s. 106.

When by-law effective

107.  (1)  A by-law is not effective until it is passed by the board and confirmed, with or without variation, by a special resolution passed at a general meeting of the members duly called for that purpose or by such greater proportion of the votes cast as the articles may provide. 2002, c. 18, Sched. H, s. 3 (5).