CHAPTER 4
OF THE
ACTS OF 1994
1 This Act may be cited as the Credit Union Act. 1994, c. 4, s. 1.
2 The purposes of credit unions are, on a co-operative basis, to provide a comprehensive range of financial services that meet the needs of their members and to provide for the direction and democratic control of such services by residents of the Province. 1994, c. 4, s. 2.
(a) "affairs" means the relationship among a credit union or the Central, their subsidiaries and their respective members, directors and officers, but does not include the business carried on by the credit union, the Central or subsidiary;
(b) "articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of reorganization, articles of dissolution, articles of revival and any amendments thereto, and includes any enactment or ordinance by or under which a body corporate has been incorporated, and any letters patent, supplementary letters patent, certificate of incorporation, memorandum of association and any other document evidencing corporate existence;
(c) "associate" means a person, other than a member, who has rights as set out in the charter by-laws or this Act, in a credit union or the Central;
(d) "auditor" includes a partnership of auditors;
(e) "body corporate" includes a credit union or other body corporate wheresoever or howsoever incorporated;
(f) "bond of association" includes groups having a common bond of occupation or association, the residents within a well-defined neighbourhood, community or rural or urban district, including a rural trading area, employees of a common employer or members of bona fide fraternal, religious, co-operative, labour, rural, educational and similar organizations, and members of the immediate family of such persons;
(g) "capital account" means the full amount of the consideration received by a credit union or the Central for any shares issued;
(h) "Central" means The Credit Union Central of Nova Scotia continued by this Act;
(i) "charter by-law" means a by-law of a credit union or the Central that requires the approval of the Superintendent;
(j) "Corporation" means the Nova Scotia Credit Union Deposit Insurance Corporation established pursuant to Section 155;
(k) "court" means the Supreme Court of Nova Scotia;
(l) "credit union" includes, as the context may require, a "caisse populaire";
(m) "creditor" means a person, other than a depositor, to whom a credit union or the Central owes money and includes, as the context requires, the creditor's heirs, executors, administrators and assigns;
(n) "debt obligation" means a bond, debenture, note or other evidence of indebtedness or guarantee of a body corporate, whether secured or unsecured;
(o) "delegate" means an individual elected, in accordance with the charter by-laws, to represent a group of members at meetings of a credit union or the Central;
(p) "deposit" means money placed in an account in a credit union or the Central;
(q) "director" means a person occupying the position of director of a credit union or the Central;
(r) "immediate family" means the spouse, son, daughter, brother, sister, parent or grandparent of an individual;
(s) "incorporator" means a person who signs articles of incorporation;
(t) "individual" means a natural person;
(u) "member" means a person having rights through a membership interest in a credit union or the Central in accordance with the provisions of this Act and the articles or charter by-laws of the credit union or the Central and includes, as the context may require, a member's legal representative, an associate of a credit union and an associate member of the Central;
(v) "Minister" means the Minister of Housing and Consumer Affairs;
(w) "officer" includes the chair, vice-chair and secretary of a credit union, the Central or the Corporation;
(x) repealed 2004, c. 11, s. 1.
(y) "ordinary resolution" means a resolution passed by a majority of the votes cast by members or delegates who voted in respect of that resolution;
(z) "patronage refund" means an amount that, pursuant to this Act, is allocated among and credited or paid by a credit union or the Central to its members or associates, based upon the business done by each of them with or through the credit union or the Central;
(aa) "person" includes an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative;
(ab) "prescribed" means prescribed by the regulations;
(ac) "security" means a share or a debt obligation or a certificate evidencing a share or debt obligation;
(ad) "security interest" means an interest in or charge upon property of a credit union, the Central or the Corporation taken by a creditor to secure payment of a debt or performance of any obligation of the credit union, the Central or the Corporation, and includes a certificate evidencing a share or debt obligation;
(af) "special resolution" means a resolution passed by a majority of not less than two thirds of the votes cast by the persons who voted in respect of that resolution, or signed by all the persons entitled to vote on that resolution;
(ag) "subsidiary" means a body corporate in which a credit union or the Central controls a majority of the voting shares;
(ah) "Superintendent" means the Superintendent appointed pursuant to Section 256. 1994, c. 4, s. 3; 2004, c. 11, s. 1.
4 (1) This Act, except where it is otherwise expressly provided, applies to
(a) every credit union incorporated pursuant to this Act;
(b) every credit union incorporated pursuant to similar legislation of the Province in force before the coming into force of this Act;
(c) the Central continued pursuant to this Act; and
(d) the Corporation established pursuant to this Act.
(2) Where a provision of Part XI or XII is inconsistent with any other provision of this Act, the provision of that Part prevails. 1994, c. 4, s. 4.
5 (1) Any ten or more individuals, no one of whom
(a) is less than nineteen years of age; or
(b) has the status of an undischarged bankrupt,
may apply for incorporation as a credit union by sending to
(c) the Superintendent, in duplicate, articles of incorporation, a notice of registered office in the prescribed form and the proposed charter by-laws; and
(d) the Corporation, a proposed business plan.
(2) Upon receipt of a proposed business plan pursuant to clause (1)(d), the Corporation shall review the proposed business plan and make a recommendation to the Superintendent with respect to the proposed incorporation.
(3) The recommendation referred to in subsection (2) is not binding on the Superintendent. 2004, c. 11, s. 2.
6 (1) Articles of incorporation shall follow the prescribed form and shall set out, in respect of the proposed credit union,
(a) the name of the credit union;
(b) the location in the Province where the registered office is to be situated;
(c) the name in full and the residence address, giving the street and number, if any, of each first director;
(d) a statement of the proposed bond of association of the credit union, if any;
(e) the classes and any maximum number of shares that the credit union is authorized to issue other than common shares, if any, and if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares;
(f) if the right to transfer shares of the credit union is to be restricted, a statement that the right to transfer shares is restricted and the nature of the restrictions;
(g) any restrictions on the business that the credit union may carry on;
(h) a statement indicating whether associate status is permitted; and
(i) all other matters which, by this Act, are required to be dealt with in the articles.
(2) The articles may, in addition, set out any provisions permitted by this Act to be set out in the charter by-laws.
(3) The articles shall have attached thereto, in the prescribed form, the consent of a first director who is not an incorporator.
(4) The charter by-laws shall provide for such of the following matters as are applicable but are not set out in the articles:
(a) qualifications, conditions and method of applying for and terminating membership and associate status;
(b) the location of meetings of members, the mode of holding meetings and the quorum at meetings, the rights of voting and making, repealing or amending by-laws, the right of members to vote by ballot or mail, or both, and the manner, form and effect of votes at meetings;
(c) the election, term of office, removal of and filling of vacancies among directors, committee members and officers, their powers, duties and remuneration and the procedure and quorum at meetings of the board of directors;
(d) the division of the territory in which the credit union carries on its business into districts for the purpose of holding district meetings, the business that may be conducted and the procedures to be followed at the meetings;
(e) the establishment of the fiscal year end of the credit union;
(f) the incorporation and ownership of subsidiary companies by the credit union;
(g) the holding of a referendum on any matter of general concern to the members; and
(h) all other matters which, by this Act, are required to be dealt with in the charter by-laws. 1994, c. 4, s. 6.
7 The Superintendent may accept for filing and approval any articles and charter by-laws sent pursuant to Section 5 with respect to a proposed incorporation if
(a) the Superintendent is satisfied that the incorporation provides a public benefit and, without limiting the generality of the foregoing,
(ii) the proposed credit union will be organized and operated for the convenience and advantage of its members,
(iii) the proposed credit union will be organized and operated in a manner whereby the investments and deposits of members will be safeguarded without likelihood of claim upon the Corporation, and
(iv) the proposed bond of association, if any, is not objectionable;
(b) the articles are in compliance with the provisions of this Act; and
(c) the Superintendent approves the charter by-laws. 1994, c. 4, s. 7.
8 Upon acceptance for filing and approval of the articles and charter by-laws, the Superintendent shall issue a certificate of incorporation in accordance with Section 258. 1994, c. 4, s. 8.
9 A credit union comes into existence on the date shown in the certificate of incorporation. 1994, c. 4, s. 9.
10 (1) Every credit union shall include the words "credit union" or "caisse populaire" as part of its name and the word "Limited" or "Limitée" or the abbreviation "Ltd" or "Ltée" shall be the last word of the name.
(2) A credit union shall clearly identify itself and set out its name in legible characters in all contracts, invoices, negotiable instruments, orders for goods and services, advertising and all other representations to the public.
(3) Subject to Section 12 and the Partnerships and Business Names Registration Act, a credit union may carry on business under or identify itself by a name other than its full legal name.
(4) No person other than a credit union shall use the words "credit union" or "caisse populaire" or any derivative or abbreviation thereof as part of its name, or shall hold itself out as, or use part of its name or otherwise any word or abbreviation suggesting, indicating or implying that it is, or is carrying on business as, a credit union.
(5) Subsection (4) does not apply to
(a) a body corporate incorporated by or under the authority of an Act of the Parliament of Canada;
(b) a credit union incorporated pursuant to the laws of any other province and which is authorized pursuant to this Act to carry on business in the Province;
(c) the Central or the Corporation;
(d) a body corporate with the written authorization of the Superintendent. 1994, c. 4, s. 10; 2004, c. 11, s. 3.
11 The Superintendent may, upon the request in writing of any person and upon payment of the prescribed fee, reserve a name for the use and benefit of the persons desiring to form a credit union for a period of ninety days if the name is not contrary to Section 12. 1994, c. 4, s. 11.
12 (1) A credit union shall not have a name that
(a) is known to the Superintendent to be identical with the name of an existing or a dissolved credit union except as prescribed;
(b) subject to subsection (2), is known to the Superintendent to be the same as the name of a business or association or other body corporate;
(c) suggests or implies a connection with the Crown or any member of the Royal Family, or the Government of Canada, of the government of any province in Canada or any department, branch, bureau, service, agency or activity of that government, without the consent in writing of the appropriate authority;
(d) includes the word "Trust"; or
(e) the Superintendent, for any good and valid reason disapproves.
(2) A credit union shall not have a name that is similar to the name of any other business, association or body corporate if the use of that name by the credit union would, in the opinion of the Superintendent, be likely to confuse or mislead, unless the business, association or body corporate consents in writing to its name being given in whole or in part to the credit union and, if required by the Superintendent, the business, association or body corporate undertakes to dissolve or to change its name within six months after the incorporation of the credit union.
(3) Where a credit union is granted a name subject to an undertaking given pursuant to subsection (2) and the undertaking is not carried out within the specified time, the Superintendent may direct the credit union to which the name is granted to change its name to a name that complies with this Act and, if the credit union fails to comply with the directive within sixty days of the service thereof, the Superintendent may revoke the name of the credit union and assign to it a number and, until changed in accordance with Section 135, the name of the credit union is the number so assigned.
(a) comes into existence or is continued with a name; or
(b) upon an application to change its name, is granted a name,
that contravenes this Section, the Superintendent may direct that credit union to change its name.
(5) Where a credit union is directed pursuant to subsection (4) to change its name and fails within sixty days from the service of the directive to change its name to a name that complies with this Act, the Superintendent may revoke the name of the credit union and assign to it a number and, until changed in accordance with Section 125, the name of the credit union is the number so assigned.
(6) Where a credit union has had its name revoked and a number assigned to it pursuant to subsection (3) or (5), the Superintendent shall issue a certificate of amendment showing the new name of the credit union and shall forthwith give notice of such change of name in the Royal Gazette. 1994, c. 4, s. 12; 2004, c. 11, s. 4.
13 (1) Except as provided in this Section, a person who enters into a written contract in the name of or on behalf of a credit union before it comes into existence is personally bound by the contract and is entitled to the benefits thereof.
(2) A credit union may, within a reasonable time after it comes into existence by any action or conduct signifying its intention to be bound thereby, adopt a written contract made before it came into existence in its name or on its behalf and, upon the adoption,
(a) the credit union is bound by the contract and is entitled to the benefits thereof as if the credit union had been in existence at the date of the contract and had been a party thereto; and
(b) the person who purported to act in the name of or on behalf of the credit union ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.
(3) Except as provided in subsection (4), whether or not a written contract made before the coming into existence of a credit union is adopted by the credit union, a party to the contract may apply to the court for an order fixing obligations under the contract as joint and several or apportioning liability between or among the credit union and any person who purported to act in the name of or on behalf of the credit union, and upon the application the court may make any order it thinks fit.
(4) Where expressly so provided in the written contract, a person, who purported to act in the name of or on behalf of the credit union before it came into existence, is not in any event bound by the contract or entitled to the benefits thereof. 1994, c. 4, s. 13.
14 A credit union has the capacity and, subject to this Act, the rights, powers and privileges of a natural person. 1994, c. 4, s. 14.
15 Subject to this Act, a credit union may, with the approval of the Superintendent, carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside the Province to the extent that the laws of that jurisdiction permit. 1994, c. 4, s. 15.
16 (1) Subject to this Act, a credit union may carry on any business appertaining to the business of credit unions and may, without limiting the generality of the foregoing,
(a) receive deposits from and operate chequing services for its members; and
(b) make loans to its members.
(2) A credit union shall not provide any service referred to in clauses 1(a) and (b) to another credit union.
(3) A credit union shall not carry on any business other than that appertaining to the business of credit unions and, without limiting the generality of the foregoing, a credit union shall not
(a) engage in the provision of real estate brokerage services;
(b) except as authorized pursuant to the Cemetery and Funeral Services Act, execute the office of executor, administrator, guardian of a minor's estate or committee of a mentally incompetent person or provide services of a fiduciary nature commonly provided by a trust company;
(c) subject to subsection 38(1), act as a dealer, underwriter or adviser as defined in the Securities Act;
(d) undertake the business of insurance, except to the extent permitted by this Act or the regulations; or
(e) act as agent for any person in the placing of insurance and shall not lease or provide space in any branch of the credit union to any person engaged in the placing of insurance, except to the extent permitted by this Act or the regulations.
(4) Notwithstanding subsections (1) and (3), but subject to the regulations, a credit union may, in accordance with the regulations, enter into an arrangement with a financial institution or any other body corporate of a prescribed type for the provision of any service or services offered by that financial institution or other body corporate. 1994, c. 4, s. 16.
17 (1) A credit union shall not exercise pressure on a borrower to place insurance for the security of a credit union with any particular insurance agent, broker or company, but a credit union may require that an insurance company chosen by a borrower meet with its approval, which approval shall not be unreasonably withheld.
(2) Nothing in subsection (1) precludes a credit union from
(a) requiring that insurance be placed by a member for the security of a credit union; or
(b) entering into such group plans of insurance as may be prescribed with an insurance company, agent or broker for the security of a credit union or for the benefit of its employees. 1994, c. 4, s. 17.
19 (1) Subject to this Act, it is not necessary for a by-law to be passed in order to confer any particular power on a credit union or its directors.
(2) A credit union shall not carry on any business or exercise any power if it is restricted by its articles or this Act from carrying on that business or exercising that power and shall not exercise any of its powers in a manner contrary to its articles or this Act.
(3) No act of a credit union, including any transfer of property to or by a credit union, is invalid by reason only that the act or transfer is contrary to its articles or this Act. 1994, c. 4, s. 19.
20 No person is affected by or is deemed to have notice or 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. 4, s. 20.
21 A credit union or a guarantor of an obligation of the credit union may not assert against a person dealing with the credit union or with any person who has acquired rights from the credit union that
(a) this Act or the regulations or the articles or by-laws of the credit union have not been complied with;
(b) the persons named as directors in the most recent notice sent to the Superintendent pursuant to this Act are not the directors of the credit union;
(c) the place named in the most recent notice sent to the Superintendent pursuant to this Act is not the registered office of the credit union;
(d) a person held out by the credit union as a director, an officer or agent of the credit union has not been duly appointed or has no authority to exercise the powers or perform the duties that are customary in the business of the credit union or usual for that director, officer or agent;
(e) a document issued by a director, officer or agent of the credit union with actual or usual authority to issue the document is not valid or not genuine; or
(f) any financial assistance to members or directors or any sale, lease or exchange of all or substantially all of the property of the credit union was not authorized,
except where the person has or, by virtue of that person's position with or relationship to the credit union, ought to have knowledge of that fact. 1994, c. 4, s. 21.
22 (1) A credit union shall at all times have a registered office which shall be the principal place of business of the credit union in the location within the Province specified in its articles.
(2) The directors of a credit union shall establish and may change the address of the registered office in the location specified in the articles.
(3) A credit union shall send to the Superintendent, within fifteen days of any change, a notice in prescribed form of any change of address of its registered office.
(4) Where the location of the registered office of a credit union is changed by reason only of the annexation or amalgamation of the location in which the registered office is situate to or with another municipality, that change does not constitute and is not deemed to constitute a change within the meaning of subsection 125(1).
(5) A credit union may establish or relocate branch offices of the credit union as may be prescribed. 1994, c. 4, s. 22.
23 (1) A credit union shall prepare and maintain, at its registered office or subject to subsection (2) at any other place in the Province designated by the directors, records including
(a) the articles and the by-laws and all amendments thereto;
(b) the duly executed minutes of meetings and resolutions of members;
(c) a register of directors, officers and committee members setting out the names, addresses and other occupations, if any, of all persons who are or have been directors, officers of committee members of the credit union with the several dates on which each became or ceased to be a director, officer or committee member;
(d) a members register, and if applicable, an associates register, setting out the names and the latest known addresses of all members and associates;
(e) a shareholders register of holders of shares of a class other than common or surplus shares, setting out the names and the latest known addresses of the shareholders and the number of shares and other securities, if any, held by each;
(f) the accounting records and the duly executed minutes of meetings and resolutions of the directors and any committee thereof.
(2) Where a credit union, to the satisfaction of the Superintendent,
(a) shows the necessity of keeping any of the minutes, documents, registers, books of account and accounting records mentioned in subsection (1) at a place other than the registered office of the credit union; and
(b) gives assurance that those minutes, documents, registers, books of account and accounting records will, at all reasonable times, be open for inspection at the registered office of the credit union or some other place in the Province approved by the Superintendent by any person who is entitled to inspect them and who applies to the credit union for an inspection thereof,
the Superintendent may, by order, which may be subject to terms, permit the credit union to keep them at a place designated in the order other than the registered office.
(3) The Superintendent for any good and valid reason may, by order which may be subject to terms, vary or rescind an order made pursuant to subsection (2). 1994, c. 4, s. 23.
24 (1) Members and creditors of a credit union, their agents and legal representatives, may examine the records referred to in clauses 23(1)(a), (b) and (c) during the usual business hours of the credit union, and may take extracts therefrom upon payment of a reasonable fee.
(2) Where the affidavit referred to in subsection (4) is sent to the credit union, members of a credit union, their agents and legal representatives may examine the records referred to in clause 23(1)(d) during the usual business hours of the credit union and may, upon payment of a reasonable fee, receive from the credit union a copy of the members register.
(3) Where the affidavit referred to in subsection (4) is sent to the credit union, holders of shares of a class other than common or surplus shares, their agents and legal representatives may examine the records referred to in clause 23(1)(e) during the usual business hours of the credit union and may, upon payment of a reasonable fee, receive from the credit union a copy of the shareholders register.
(4) The affidavit required pursuant to subsection (2) or (3) shall
(a) state the name and address of the applicant;
(b) be made by a director or officer of the body corporate if the applicant is a body corporate; and
(c) state that the register will not be used by any person except in connection with matters relating to the affairs of the credit union.
(5) A person who uses a register for purposes not related to the affairs of the credit union is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars or to imprisonment for a term not exceeding six months, or to both.
(6) A credit union shall make available, and a member may examine, the members register at any meeting of members.
(7) The directors of a credit union or the duly authorized representative of the board of directors may examine the records referred to in clause 23(1)(f) at all reasonable times at no charge.
(8) The Superintendent shall have the right to inspect the records referred to in subsection 23(1) at all reasonable times. 1994, c. 4, s. 24.
25 (1) All registers and other records required by this Act to be prepared and maintained may be in a bound or loose-leaf form or in a photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.
(2) A credit union and its agents shall take reasonable precautions to
(a) prevent loss or destruction of;
(b) prevent falsification of entries in;
(c) facilitate detection and correction of inaccuracies in,
the registers and other records required by this Act to be prepared and maintained. 1994, c. 4, s. 25.
26 An instrument or agreement executed on behalf of a credit union by a director, an officer or an agent of the credit union is not invalid merely because a corporate seal is not affixed thereto. 1994, c. 4, s. 26.
27 (1) Common shares in a credit union shall have an issue price fixed by the articles, but the issue price shall not, in any event, be less than five dollars each.
(2) A credit union is not limited as to the number of common shares it may issue.
(3) A member of a credit union shall purchase and hold only one fully-paid common share, unless the charter by-laws of the credit union permit or require members to purchase and hold more than one fully-paid common share. 1994, c. 4, s. 27.
28 Where a credit union is incorporated prior to the commencement of this Act, an issued share of the credit union is deemed, for the purpose of this Act, to be a common share. 1994, c. 4, s. 28.
29 (1) In addition to common shares, the articles of a credit union may provide for the issuance of more than one class of shares, including surplus shares, and if the articles so provide, there shall be set out therein the maximum number of shares in each class other than common and surplus shares that the credit union is entitled to issue, the total consideration to be paid for each such class of shares, and the rights, privileges, restrictions and conditions, including dividends, attached to the shares of each such class.
(2) Common shares shall rank behind all other classes of shares issued by the credit union and holders of common shares shall not, upon the winding-up or liquidation of a credit union, be entitled to redeem, in whole or in part, any common shares until the amounts outstanding on all other classes of shares have been paid in full.
(3) The Superintendent may not permit a credit union to create a class of shares, other than common shares, if, in the opinion of the Superintendent, the issuance of such shares would
(a) not be consistent with the objects of a credit union generally;
(b) not be in the financial interests of the credit union; or
(c) increase the risk of a claim upon the Corporation. 1994, c. 4, s. 29.
30 A credit union is not required to issue share certificates for common or surplus shares. 1994, c. 4, s. 30.
31 (1) A share shall not be issued until the consideration for the share is fully paid in money, or in property or past services that is not less in value than the fair equivalent of the money that the credit union would have received if the share had been issued for money.
(2) A credit union shall not issue a share if the proposed consideration for such share consists, in whole or in part, of a promissory note or a promise to pay. 1994, c. 4, s. 31.
32 (1) After providing for all known liabilities, making allowance for doubtful accounts and making such other provisions as are required by this Act and the regulations and after providing for payment of dividends, if any, on all classes of shares, the directors of a credit union may allocate, as a patronage refund among, and credit to, its members any surplus arising from the operations of the credit union in each fiscal year, and each member shall be entitled to a share thereof proportionate to the business done by that member with or through the credit union in that fiscal year as computed by the directors at a rate approved by the resolution of the directors .
33 (1) A credit union may, in its charter by-laws, provide that in each fiscal year of the credit union the whole of any patronage refund or common or surplus share dividend credited to a member, or such part thereof as may be set out in the charter by-laws of the credit union, shall be applied to purchase, on behalf of the member, surplus shares of the credit union, up to such number as may be specified in the charter by-laws.
(2) A credit union may, in its charter by-laws, require its members to lend to it the whole, or such part as may be specified in the charter by-laws, of the patronage refunds or common or surplus share dividends to which the members may become entitled in any fiscal year, and the charter by-laws shall provide the terms upon which the loans are made including the method of their repayment and the rate of interest, if any, thereon.
(3) Loans made to a credit union pursuant to subsection (2) shall, with respect to the repayment of capital, in the event of a winding-up or dissolution of a credit union, rank ahead of the common shares of the credit union. 1994, c. 4, s. 33.
34 (1) A credit union shall not make any payment to purchase or redeem shares issued by it or repay any loan of patronage refunds, or common or surplus share dividends, if there are reasonable grounds for believing that
(a) the credit union is, or would thereby be, unable to pay its liabilities as they become due; or
(b) the realizable value of the credit union's assets is, or would thereby be, less than the aggregate of
(ii) the amount that would, at that time, be required to pay the holders of equity, that have a right to be paid, on a redemption, repayment or in a liquidation, rateably with or prior to the holders of the equity to be purchased, redeemed or repaid.
(2) Subject to subsection (1), no shares issued by a credit union, or any loan of patronage refunds or share dividends, may be redeemed or paid out at a price or an amount exceeding the issue price or the amount lent to the credit union, as the case may be. 1994, c. 4, s. 34.
35 Subject to subsection 36(1), a credit union may declare and pay such dividends upon its outstanding common or surplus shares as may be established by a resolution of the directors . 1994, c. 4, s. 35; 2004, c. 11, s. 7.
36 (1) A credit union shall not pay out a dividend on shares or pay out a patronage refund if there are reasonable grounds for believing that
(a) the credit union is, or would thereby be, unable to pay its liabilities as they become due;
(b) the realizable value of the credit union's assets is, or would thereby be, less than the aggregate of its liabilities and its equity other than retained surplus; or
(c) the equity of the credit union is, or would thereby be, less than the prescribed amount.
(2) Where, but for clause (1)(c), a credit union would be able to make any payments referred to in subsection (1), the Superintendent may, upon recommendation of the Corporation, authorize any payments referred to in subsection (1) upon such terms and conditions as the Superintendent deems advisable. 1994, c. 4, s. 36.
37 Unless the charter by-laws otherwise provide, no person shall hold more than ten per cent of the total number of issued shares of any class comprising the capital of the credit union. 1994, c. 4, s. 37.
38 (1) Subject to subsection (2), the Securities Act does not apply to the distribution of any securities of a credit union by the credit union, including shares of, and deposits in, a credit union.
(2) Where the Superintendent considers it to be in the public interest, the Superintendent may direct that the proposed issuance of securities by a credit union be subject to the Securities Act.
(3) The exemption set out in subsection (1) does not apply to the issue of securities by a subsidiary of a credit union. 1994, c. 4, s. 38.
39 (1) All shares in a credit union shall be non-voting except in the case of a class vote as provided for in subsection (2).
(2) The holders of shares of a class other than common or surplus shares are, unless the articles otherwise provide in the case of an amendment referred to in clauses (a), (b) and (e), entitled to vote separately as a class upon a proposal to amend the articles to
(a) increase or decrease any maximum number of authorized shares of the class, or increase any maximum number of authorized shares of any other class having rights or privileges equal or superior to the shares of that class;
(b) effect an exchange, reclassification or cancellation of all or part of the shares of the class;
(c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of the class and, without limiting the generality of the foregoing,
(ii) add, remove or change prejudicially any redemption rights,
(iii) reduce or remove any dividend preference or liquidation preference, or
(iv) add, remove or change prejudicially any conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a corporation, or sinking fund provisions;
(d) increase the rights or privileges of any other class of shares having rights or privileges equal or superior to the shares of that class;
(e) create a new class of shares equal or superior to the shares of that class;
(f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class;
(g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class; or
(h) constrain the issue or transfer of the shares of the class or extend or remove the constraint. 1994, c. 4, s. 39.
40 Subject to this Act, a member is not responsible for any act, default or liability whatsoever of the credit union or for any engagement, claim, payment, loss, injury, transaction, matter or thing whatsoever relating to or connected with the credit union. 1994, c. 4, s. 40.
41 Nothing in this Act curtails, abridges or defeats any remedy for the recovery from
(a) the borrower of money loaned by a credit union in contravention of this Act or the regulations; and
(b) the member of any amount withdrawn in excess of the amount standing to the member's credit in its deposit accounts. 1994, c. 4, s. 41.
42 In the event that a deposit account contains less than a prescribed amount and no business has been transacted in connection with such account over a prescribed period, the credit union shall be entitled to deal with such account in a prescribed manner. 1994, c. 4, s. 42.
43 (1) A member shall be entitled to the balance remaining in any deposit account maintained by the member at the credit union together with any accrued interest at any time during normal business hours of the credit union.
(2) A credit union may, in its sole discretion, require up to ninety days' notice in writing of a member's intention to withdraw deposits or to redeem any shares.
(3) Subsection (2) does not apply in those circumstances where a member has placed deposits with a credit union for a stated term or in an account on which a bill of exchange payable on demand may be drawn. 1994, c. 4, s. 43.
44 (1) Except where the credit union is itself the trustee, a credit union is not bound to see to the execution of any trust, whether express, implied or constructive, to which any share or deposits are subject, and where such an account is subject to a trust of which the credit union has notice, the cheque, bill of exchange, withdrawal slip or receipt of the person
(a) in whose name the account stands; or
(b) who is, according to the document creating the trust, entitled to deal therewith,
is, notwithstanding any such trust, sufficient authorization and a valid and binding discharge of the credit union, and the credit union is not bound to see to the application of any money paid upon or with respect to any such cheque, bill of exchange, withdrawal slip or receipt.
(2) Unless the instrument of trust permits, moneys on deposit in a credit union held by a trustee in trust for a named beneficiary, or otherwise, may not be charged to secure a loan or obligation.
(3) Where a member of a credit union dies and there is no executor of a will of the deceased member or administrator of the estate of the deceased member, the credit union may, upon receipt of an affidavit or such other proof of death or proof of claim as may be required by the credit union, pay a prescribed amount out of moneys standing to the credit of the deceased member to the person who appears to be entitled to the amount of the deceased member's interest and payment made pursuant to this Section releases the credit union from any further liability with respect to the moneys so paid. 1994, c. 4, s. 44.
45 A credit union shall establish loan policies governing all lending activities of the credit union as prescribed and may, in accordance with such loan policies and the regulations, make loans to its members, including directors, officers and employees. 1994, c. 4, s. 45.
46 A credit union shall report to the Central the existence of any deposit in excess of a prescribed amount. 1994, c. 4, s. 46.
47 (1) Notwithstanding anything contained in this Act to the contrary, a credit union has a lien on the deposits and shares of a member or other person to whose credit the deposits and shares stand in the records of the credit union together with interest or dividends thereon for any indebtedness due or accruing due to it by the member or other person or for any obligation in respect of the indebtedness, and the deposits and shares may not be withdrawn or redeemed unless the credit union consents.
(2) A credit union may apply the deposits and shares, and interest or dividends thereon on which it has a lien, to any indebtedness in default or to any obligation in respect of the indebtedness without notice to any person, and the exercise of the lien by application of the deposits, shares, interest and dividends does not constitute a realization of a security interest within the meaning of any enactment.
(3) For the purpose of subsection (2), an indebtedness is deemed to be in default where
(a) an amount of the principal or interest is not paid on the date upon which it becomes due and payable; or
(b) there has been a failure to observe or perform any obligation relating to the indebtedness. 1994, c. 4, s. 47.
48 No officer or employee of a credit union shall permit a withdrawal of funds from a deposit account of a member where the funds in such account are not sufficient to cover the withdrawal, except as may be prescribed. 1994, c. 4, s. 48.
49 (1) To meet withdrawals from deposit accounts, every credit union shall establish and maintain liquidity reserves as prescribed.
(2) All investments made by a credit union for the purpose of meeting liquidity reserve requirements shall be made in financial instruments as prescribed. 1994, c. 4, s. 49.
50 A credit union may only make investments, other than investments made for the purpose of maintaining liquidity reserves, as may be prescribed. 1994, c. 4, s. 50.
51 A credit union shall establish and maintain an allowance for doubtful accounts as prescribed. 1994, c. 4, s. 51.
52 (1) A credit union shall establish and maintain a level of equity as prescribed.
(2) For the purpose of this Part, the equity of a credit union includes
(a) the value of the consideration paid for all shares issued by the credit union;
(b) the value of the consideration paid for any other securities issued by the credit union that are
which shall include the amount of any loan by a member of a patronage refund or dividend; and
(c) the retained surplus or accumulated deficit of a credit union. 1994, c. 4, s. 52.
53 A credit union shall match the term and return of its investment and loans with the term and return of member deposits in the credit union as prescribed. 1994, c. 4, s. 53.
54 Subject to this Act and the regulations, a credit union shall maintain such types and minimum levels of insurance and bonding coverage as may be determined from time to time by the Corporation. 1994, c. 4, s. 54.
55 (1) Where the returns required to be filed by a credit union disclose, or where the Superintendent otherwise learns that the stated value of the assets of a credit union are greater than their realizable value, the Superintendent may require the credit union to take such steps as the Superintendent deems appropriate to ensure that the financial position of the credit union is accurately reflected in the records of the credit union.
(2) Where it appears to the Superintendent that the realizable value of the assets of a credit union are less than the aggregate of its liabilities and its equity, other than retained surplus and common shares, the Superintendent may
(a) prohibit the credit union from taking deposits or making payments to its members;
(b) limit payments made pursuant to clause (a) for such period as the Superintendent considers necessary to protect the interest of the members;
(c) take such other action as the Superintendent considers necessary for the protection of or in the interest of the members. 1994, c. 4, s. 55.
56 (1) The membership of a credit union consists of its incorporators and those persons whose applications for membership are approved by the board of directors or approved in the manner authorized by the board of directors in accordance with this Act and the charter by-laws of the credit union.
(2) The directors of a credit union may refuse to approve an application for membership where they are satisfied that it is not in the interest of the credit union to approve such application.
(3) A person under nineteen years of age may be accepted as a member of a credit union and shares may be held and moneys received by the credit union in that person's name or in the name of a trustee for that person, if the trustee is a member or is eligible to be a member of the credit union.
(4) A credit union may not be a member of another credit union. 1994, c. 4, s. 56; 2004, c. 11, s. 8.
57 (1) The articles of a credit union may provide that membership in the credit union is limited to groups having a bond of association.
(2) Where the articles of a credit union contain a provision pursuant to subsection (1), a member of the credit union who leaves the bond of association may nevertheless retain membership in the credit union and all the rights and privileges of a member. 1994, c. 4, s. 57.
58 (1) A credit union shall not permit persons to become associates of a credit union unless
(a) the credit union has provided for associate status in its articles; and
(b) the credit union has enacted a charter by-law pursuant to clause 6(4)(a).
(2) At no time shall the number of associates exceed one quarter of the number of members of the credit union.
(3) A credit union may not be an associate of another credit union.
(4) Subject to this Act, an associate of a credit union has all the rights and privileges and is subject to all of the obligations of a member of a credit union, except that an associate shall not
(a) vote at any meeting of members; or
(b) become an officer or a director of a credit union. 1994, c. 4, s. 58.
59 (1) Unless the charter by-laws otherwise provide, the directors, by a resolution passed by a majority of not less than three-quarters of the directors at a meeting called to consider the resolution, may terminate the membership of a member.
(2) The member whose membership is proposed to be terminated by a resolution of the directors pursuant to subsection (1) is entitled to at least seven days' notice of the meeting at which the resolution is to be considered, together with a statement of the grounds upon which the membership is proposed to be terminated, and is entitled to appear, either personally or by or with an agent or counsel, to make submissions at the meeting.
(3) Within seven days after the date on which the resolution referred to in subsection (1) is passed by the requisite majority, the credit union shall, in the same manner as that provided for the giving of notice of a meeting of members, notify the person whose membership was terminated of the resolution.
(4) A person whose membership is terminated pursuant to subsection (1) may appeal the decision of the directors at the next meeting of the members by sending a notice of appeal to the credit union within fourteen days after the date when notice was given pursuant to subsection (3).
(5) The meeting of members to which an appeal pursuant to subsection (4) is brought shall, by a majority vote, either confirm or set aside the resolution of the directors terminating the membership of a member.
(6) A meeting of members may, by special resolution, terminate the membership of a member.
(7) Subject to subsection (8), a person, the termination of whose membership is confirmed by a meeting of members pursuant to subsection (5) or whose membership has been terminated by a meeting of members pursuant to subsection (6), may appeal the termination to the Superintendent as prescribed, and the Superintendent may confirm or set aside the resolution terminating the membership.
(8) No person whose membership is terminated for failure to fulfil financial obligations to the credit union may appeal the termination to the Superintendent pursuant to subsection (7).
(9) A person who, in accordance with subsection (4) or (7), appeals a termination of membership shall, notwithstanding the resolution terminating membership, continue to be a member of the credit union until the termination is confirmed by the meeting of members pursuant to subsection (5) or by the Superintendent pursuant to subsection (7), as the case may be.
(10) A person whose membership is terminated upon an appeal to, or by special resolution of, a general meeting in accordance with this Section shall not again be admitted to membership in the credit union except by special resolution of a general meeting.
(11) This Section does not apply to associates. 1994, c. 4, s. 59.
60 (1) A member may withdraw from a credit union on such terms and conditions as this Act, the articles or the charter by-laws of the credit union may provide.
(2) No provisions in respect of terminated or withdrawing members affect the provisions of any contract between a terminated or withdrawing member and the credit union and, without restricting the generality of the foregoing, shall not affect the term for which any person has agreed to place deposits with the credit union. 1994, c. 4, s. 60.
61 Withdrawal from or termination of membership in a credit union does not release a person from any liability to the credit union. 1994, c. 4, s. 61.
62 (1) The members of a credit union may, subject to this Act and the articles of the credit union, at any annual meeting or general meeting called for the purpose, enact, amend or repeal charter by-laws in respect of those matters authorized or required by any provision of this Act.
(2) A by-law may be enacted, amended or repealed by the members of a credit union if
(a) approved by special resolution of the members; or
(b) written notice of the proposed enactment, amendment or repeal is forwarded to each member of the credit union with the notice of the meeting at which the enactment, amendment or repeal is to be considered, by a majority of the votes cast at the meeting.
(3) A charter by-law, amendment or repeal is effective upon the approval of the Superintendent or, in the event that the charter by-laws have been approved pursuant to subsection (5), upon enactment of the charter by-law by the credit union.
(4) repealed 2004, c. 11, s. 9.
(5) At the option of the credit union, a charter by-law and an amendment or repeal of a charter by-law may be submitted to the Superintendent for approval prior to the adoption thereof by the members of the credit union and
(a) the charter by-law must be adopted by the members of the credit union within thirty days of receipt of the approval of the Superintendent; and
(b) a certified copy of the adopted charter by-law must be filed with the Superintendent within thirty days of its adoption by the members of the credit union.
(6) Where a credit union fails to comply with the requirements of subsection (5), the charter by-law, amendment or repeal is void. 1994, c. 4, s. 62; 2004, c. 11, s. 9.
63 The articles and charter by-laws of a credit union bind the credit union and its members. 1994, c. 4, s. 63.
64 Meetings of the members of a credit union shall be held at the place within the Province provided in the charter by-laws or, in the absence of that provision, at the place within the Province that the directors may determine. 1994, c. 4, s. 64.
65 The directors of a credit union
(a) shall call an annual meeting of members which shall be held within four months after the fiscal year end of the credit union to consider the annual report of the directors, the financial statements and the auditor's report, to appoint the auditor, to elect directors and such other matters as may properly come before the meeting; and
(b) may at any time call a special meeting of members. 1994, c. 4, s. 65.
66 The record date for determining which members are entitled to receive notice of a meeting of members and vote at the meeting shall be at the close of business on the day immediately preceding the day on which the notice is given. 1994, c. 4, s. 66; 2004, c. 11, s. 10.
67 (1) Notice of the time and place of a meeting of members shall be given in accordance with the provisions of the charter by-laws or, in the absence of those provisions, not less than fourteen days nor more than thirty days before the meeting to each member entitled to vote at the meeting, and to the auditor of the credit union.
(2) Where a meeting of members is adjourned for less than seven days, it is not necessary, unless the charter by-laws otherwise provide, to give notice of the adjourned meeting other than by announcement at the earliest meeting that is adjourned.
(3) Where a meeting of members is adjourned by one or more adjournments for more than seven days, notice of the adjourned meeting shall be given in the same way as for an original meeting.
(a) at a special meeting of members; or
(b) at an annual meeting of members, except consideration of the annual report of the directors, the financial statements, the auditor's report, the election of directors, the re-appointment of the auditor and any other business authorized by the charter by-laws to be transacted at an annual meeting,
is deemed to be special business.
(5) The notice of a meeting of members at which special business is to be transacted shall include a statement of the nature of the business, in sufficient detail to permit the member receiving the notice to form a reasoned judgement thereon.
(6) Copies of the information referred to in subsection (5) shall be made available at the registered office of the credit union at least ten days before the meeting referred to in subsection (5). 1994, c. 4, s. 67; 2004, c. 11, s. 11.
68 A member or any other person entitled to attend a meeting of members may in any manner waive notice of the meeting, and the attendance of the member or other person at the meeting is itself a waiver of notice of the meeting, except where that person attends for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called. 1994, c. 4, s. 68.
69 (1) A member entitled to vote at a meeting of members may
(a) submit to the credit union notice of any matter that the member proposes to raise at the meeting, hereinafter referred to as a "proposal";
(b) discuss at the meeting any matter in respect of which the member would have been entitled to submit a proposal.
(2) A credit union shall give notice of the meeting at which a proposal is to be presented.
(2A) A member submitting a proposal shall provide a statement outlining the intent of the proposal in sufficient detail to permit members reviewing the proposal to form a reasonable judgement regarding the proposal.
(2B) Copies of a proposal referred to in subsection (1) and any supporting information shall be made available at the registered office of the credit union at least ten days before the meeting at which the proposal will be considered.
(3) If so requested by a member submitting a proposal, the credit union shall include in the notice or attach thereto a statement by the member of not more than two hundred words in support of the proposal, and the name and address of the member.
(4) repealed 2004, c. 11, s. 12.
(5) A credit union is not required to comply with subsections (2), (2A), (2B) and (3) if
(a) the proposal is not submitted to the credit union at least sixty days before the first anniversary date of the previous annual meeting of the members;
(b) it clearly appears that the proposal is submitted by the member primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the credit union or its directors, officers, members or other security holders, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes;
(c) the credit union, at the member's request, included a proposal in the notice of meeting of members held within two years preceding the receipt of the submission pursuant to subsection (1), and the member failed to present the proposal at that meeting;
(d) substantially the same proposal was submitted to the members in the notice of a meeting of members held within two years preceding the receipt of the member's request, and the proposal was defeated; or
(e) the rights conferred by this Section are being abused to secure publicity.
(6) No credit union or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this Section.
(7) Where a credit union refuses to include a proposal in a notice of meeting, the credit union shall, within ten days after receiving the proposal, notify the member submitting the proposal of its intention to omit the proposal from the notice and send to the member a statement of the reasons for the refusal.
(8) Upon the application of a member claiming to be aggrieved by a refusal pursuant to subsection (7), the court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.
(9) The credit union or any person claiming to be aggrieved by a proposal may apply to the court for an order permitting the credit union to omit the proposal from the notice of meeting, and the court, if it is satisfied that subsection (5) applies, may make the order.
(10) An applicant pursuant to subsection (8) or (9) shall give the Superintendent notice of the application, and the Superintendent is entitled to appear and be heard in person or by counsel. 1994, c. 4, s. 69; 2004, c. 11, s. 12.
70 (1) Unless the charter by-laws otherwise provide, a number of members equal to the number of directors plus five constitutes a quorum.
(2) Where a quorum is present at the opening of a meeting of members, the members present may, unless the charter by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.
(3) Where a quorum is not present at the opening of a meeting of members, the members present may adjourn the meeting to a fixed time and place but may not transact any other business.
(4) This Section does not apply to associates. 1994, c. 4, s. 70.
71 (1) A member of a credit union, nineteen years of age or over, may vote at a meeting of members.
(2) Subject to the provisions of subsections 39(1) and (2), a member of a credit union has only one vote on any question that may be voted on at a meeting of the credit union. 1994, c. 4, s. 71.
72 (1) Where a body corporate or association is a member of a credit union, the credit union shall recognize an individual authorized by resolution of the directors or governing body of the body corporate or association to represent it at meetings of members of the credit union.
(2) An individual authorized pursuant to subsection (1) may exercise, on behalf of the body corporate or association referred to in that subsection, all the powers the body corporate or association could exercise if it were an individual member. 1994, c. 4, s. 72.
73 (1) Unless the charter by-laws otherwise provide, no member, other than a member that is a body corporate or association, shall vote by proxy at any meeting of members of a credit union.
(2) Where the charter by-laws provide for voting by proxy, no person other than a member of a credit union may be appointed proxy and
(a) no member may vote more than one proxy;
(b) no member may represent more than one body corporate or association; and
(c) no member may both vote a proxy and represent a body corporate or association,
at a meeting of members of a credit union.
(3) This Section does not apply to associates. 1994, c. 4, s. 73.
74 (1) A credit union may, in its charter by-laws, provide that two or more individuals may jointly hold a membership in a credit union, but that membership is entitled to one vote only.
(2) The individuals making up a joint membership are entitled to one vote each where the joint membership meets the requirements of subsection 27(3) with respect to each of the individuals making up the joint membership. 1994, c. 4, s. 74.
75 A credit union may, by charter by-law, establish procedures to permit members to vote by mail ballot, in-branch ballot or by other means. 1994, c. 4, s. 75.
76 Every executor or administrator holding a membership or share in the credit union in the capacity of executor or administrator shall represent that membership or share at meetings of the credit union and may vote as a member or shareholder. 1994, c. 4, s. 76.
77 (1) Unless the charter by-laws otherwise provide, voting at a meeting of members shall be by show of hands, except where a ballot is demanded by a member entitled to vote at the meeting.
(2) A member may demand a ballot either before or after any vote by show of hands, and the result of the ballot shall be the decision of the members. 1994, c. 4, s. 77.
78 (1) Twenty-five members, who have the right to vote at a meeting sought to be held or such other number of members as the by-laws may provide, may, by written requisition, require the directors to call a special meeting of members for the purpose stated in the requisition.
(1A) The members referred to in subsection (1) shall identify themselves by providing to the directors their names, addresses and signatures.
(1B) The requisition referred to in subsection (1) shall include information with sufficient detail as to why the requisition is being made so that the directors and the members may form a reasonable judgement as to the intent of the requisition.
(2) The requisition referred to in subsection (1) may consist of several documents of like form, each signed by one or more members, and shall state the business to be transacted at the meeting, and shall be sent to the registered office of the credit union.
(3) Upon receiving the requisition referred to in subsection (1), the directors shall call a meeting of members to transact the business stated in the requisition, unless the business of the meeting as stated in the requisition includes a matter described in clauses 69(5)(b) to (e).
(4) Where the directors do not, within thirty days after receiving the requisition referred to in subsection (1), call a meeting, any member who signed the requisition may call the meeting.
(5) A meeting called pursuant to this Section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to this Act and the charter by-laws.
(6) Unless the members otherwise resolve at a meeting called pursuant to subsection (4), the credit union shall reimburse the members for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting. 1994, c. 4, s. 78; 2004, c. 11, s. 13.
79 (1) Where, for any reason, it is impracticable to call a meeting of members of a credit union in the manner in which meetings of members may be called, or to conduct the meeting in the manner prescribed by this Act and the charter by-laws, or if for any other reason the Superintendent thinks fit, the Superintendent may order a meeting to be called, and direct the manner of conducting the meeting and such meeting is for all purposes a meeting of members of the credit union duly called and conducted.
(2) Without restricting the generality of subsection (1), the Superintendent may order that the quorum required by this Act or the charter by-laws be varied or dispensed with at a meeting called, held and conducted pursuant to this Section. 1994, c. 4, s. 79.
80 (1) A credit union may, by charter by-law, establish a fixed number or a minimum and maximum number of directors but in no event shall the number of directors be less than five.
(a) exercise the powers of the credit union directly, or indirectly through the employees and agents of the credit union; and
(b) direct the management of the business and affairs of the credit union. 1994, c. 4, s. 80.
81 (1) The directors shall appoint from among themselves a chair and a vice-chair.
(2) The directors shall appoint a secretary who may or may not be a director and such other officers as the directors consider appropriate.
(3) In the absence of the chair and the vice-chair, the directors present at a duly constituted meeting of the directors may appoint from among the directors a person to preside at the meeting. 1994, c. 4, s. 81.
82 (1) A citizen of Canada who is nineteen years of age, a member of the credit union and satisfies the requirements set out in the charter by-laws of the credit union except
(b) an employee of a credit union, the Central or the Corporation;
(c) an auditor, or a partner of the auditor's firm, of that credit union;
(ca) a member who is in arrears for more than ninety days under a debt obligation to a credit union;
(d) the solicitor, or a partner of the solicitor's firm, of that credit union; or
(e) a civil servant whose official duties are concerned with the affairs of credit unions,
may be a director of the credit union.
(2) A non-individual shall not be a director of a credit union.
(3) Within a period specified by the Central,
(a) a person elected or appointed for the first time as a director of a credit union; or
(b) where required by the Central, every director of a credit union who has not completed a director training program,
shall complete a credit union director training program determined by the Central. 1994, c. 4, s. 82; 2004, c. 11, s. 14.
83 (1) Each director named in the articles holds office from the issue of the certificate of incorporation until the first meeting of members.
(2) The members of a credit union shall, by ordinary resolution at the first meeting of the members and at each succeeding annual meeting of the members at which an election of directors is required, elect directors to hold office for a term established in the charter by-laws, which term shall not exceed three years.
(3) Notwithstanding the provisions of subsection (2), the charter by-laws of a credit union may provide the manner in which members of a credit union elect directors for a district at a district meeting.
(4) It is not necessary that all directors elected at a meeting of members hold office for the same term.
(5) A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of members following that director's election.
(6) Notwithstanding anything contained in this Section, if directors are not elected at a meeting of the members, the incumbent directors continue in office until their successors are elected. 1994, c. 4, s. 83.
84 (1) A director of a credit union ceases to hold office when the director
(b) is removed from office in accordance with Section 85; or
(c) becomes disqualified pursuant to Section 82.
(2) The resignation of a director becomes effective at the time a written resignation is received by the credit union, or at the time specified in the resignation, whichever is later. 1994, c. 4, s. 84.
85 (1) The members of a credit union may, by ordinary resolution, at a special meeting remove any director from office.
(2) A vacancy created by the removal of a director from office may be filled at the meeting of the members at which the director is removed, or if not so filled, may be filled pursuant to Section 87. 1994, c. 4, s. 85.
(b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing the director from office; or
(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed or elected to fill the office of director in that person's stead, whether because of that person's resignation or removal or because that person's term of office has expired or is about to expire,
is entitled to submit to the credit union a written statement giving the reasons for the resignation or for opposing any action or resolution proposed for the purposes described in clauses (b) and (c).
(2) A credit union shall forthwith send a copy of the statement referred to in subsection (1) to every member and to the Superintendent.
(3) No credit union or person acting on its behalf incurs any liability by reason only of circulating a statement in compliance with subsection (2). 1994, c. 4, s. 86.
87 (1) Subject to subsection (4), a quorum of directors may fill a vacancy among the directors, except a vacancy resulting from an increase in, or the members' failure to elect, the fixed or minimum number of directors.
(2) Where a meeting of the members fails, for any reason, to elect the fixed or minimum number of directors, the directors elected at that meeting may exercise all the powers of directors if the number of directors so elected constitutes a quorum.
(3) Where there is a failure to elect the fixed or minimum number of directors at a meeting of members, the directors then in office shall forthwith call a meeting of members to fill the vacancy and, where they fail to call a meeting or there are no directors then in office, the meeting may be called by any member.
(4) The articles or charter by-laws may provide that a vacancy among the directors shall be filled only by a vote of the members.
(5) Where a vacancy among the directors is filled pursuant to subsection (1), the appointment shall be ratified at the next meeting of members. 1994, c. 4, s. 87.
88 (1) Within fifteen days after a change of directors occurs, a credit union shall send to the Superintendent a notice in the prescribed form setting out the change, and the Superintendent shall file the notice.
(2) An interested person or the Superintendent may apply to the court for an order requiring a credit union to comply with subsection (1) and, upon the application, the court may make the order and any further order it thinks fit.
(3) A director named in the articles or in a notice sent by the credit union to the Superintendent pursuant to subsection (1) and filed by the Superintendent is presumed for the purposes of this Act to be a director of the credit union. 1994, c. 4, s. 88.
89 (1) Unless the articles or charter by-laws otherwise provide, the directors of a credit union may meet at such place and upon such notice as the directors may determine.
(2) Unless the articles or charter by-laws otherwise provide, a majority of the directors constitutes a quorum at any meeting of directors and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.
(3) Unless the charter by-laws otherwise provide, a notice of a meeting of directors need not specify any matter that is to be dealt with at the meeting except
(a) any question or matter requiring the approval of the members;
(b) the filling of a vacancy among the directors;
(c) the issuance or redemption of any securities of the credit union other than common shares; or
(d) the approval of any financial statements of a kind referred to in Section 105.
(4) A director may in any manner waive notice of a meeting of directors and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called.
(5) Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.
(6) Subject to the charter by-laws, a director may, where all the directors participating in the meeting consent, participate in a meeting of directors or of a committee of directors by means of such telephone or other communications facilities as permit all persons participating in the meeting to hear each other, and a director participating in the meeting by such means is deemed for the purposes of this Act to be present at that meeting. 1994, c. 4, s. 89; 2004, c. 11, s. 15.
90 (1) The directors of a credit union may appoint committees and may delegate to those committees any of the powers of the directors.
(2) The members of a committee appointed by the directors shall be members of the credit union and the chair of the committee shall be a director of the credit union.
(3) A committee appointed by the directors shall keep minutes of its proceedings and shall submit to the directors at each meeting of directors the minutes of the committee's proceedings during the period since the last meeting of the directors.
(4) Notwithstanding subsection (1), a committee appointed by the directors has no authority to
(a) submit to the members any question or matter requiring approval of the members;
(b) fill a vacancy among the directors;
(ba) hire or establish the terms of employment of the general manager of the credit union;
(c) issue or redeem shares, except in the manner and on the terms authorized by the directors; or
(d) approve any financial statements referred to in Section 105. 1994, c. 4, s. 90; 2004, c. 11, s. 16.
91 The directors of a credit union shall establish, in accordance with the regulations, an audit committee and a credit committee, which committees shall perform such duties and have such powers as may be provided for in the regulations. 1994, c. 4, s. 91.
92 An act of a director or officer is valid, notwithstanding any irregularity in the election of or appointment or any defect in the qualifications of the director. 1994, c. 4, s. 92.
93 (1) A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors
(a) satisfies all requirements of this Act relating to meetings of directors or meetings of committees of directors or of a committee of directors, as the case may be;
(b) is as valid as if it had been passed at a meeting of directors or of a committee of directors, as the case may be; and
(c) is effective from the date specified in the resolution, which shall not be prior to the date on which the first director signed the resolution.
(2) A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or committee of directors, as the case may be. 1994, c. 4, s. 93.
94 (1) Directors of a credit union who vote for or consent to a resolution authorizing a payment contrary to Sections 34 and 36, or the payment of an indemnity contrary to Section 102, are jointly and severally liable to restore to the credit union any amount so distributed or paid and not otherwise recovered by the credit union.
(2) Where a loan or advance is made by a credit union to a member thereof in violation of this Act or the regulations, the person receiving the loan or advance and all directors and other officers and members of committees of the credit union who, with knowledge of the violation, make or approve the loan or advance, are jointly and severally liable to the credit union for the unpaid balance of the loan or advance with interest.
(3) A director, officer or member of a committee who satisfies a judgment rendered pursuant this Section is entitled to contribution from all other persons who, by virtue of this Act, are also liable.
(4) A director, officer or member of a committee who is liable pursuant to subsection (1) or (2) may apply to the court for an order compelling a member or other recipient to pay any money or deliver any property to the director, officer or member of a committee that was improperly paid or distributed to the member or other recipient.
(5) An action to enforce a liability imposed by subsections (1) and (2) may not be commenced after two years from the date of the resolution authorizing the thing complained of. 1994, c. 4, s. 94.
95 Where a director of a credit union becomes aware that
(a) the credit union is unable to make any lawful payment it is required to make, except with the result that
(ii) the realizable value of the credit union's assets would thereby be less than the aggregate of its liabilities and the capital account of all classes of shares of the credit union other than common shares; or
(b) the credit union is financially unsound or conducting its affairs in a manner that tends to increase the risk of a claim upon the Corporation,
the director shall, within seven days, give written notice thereof to the Superintendent. 1994, c. 4, s. 95.
96 (1) Without in any way limiting those matters which may be considered to be material in nature, a "material contract" in this Section includes a contract of any kind made by a credit union under which it
(a) employs a person as a full-time employee;
(b) retains the service of a person otherwise than as an employee; or
(c) disposes of or acquires property whether by sale, purchase, lease or otherwise, for consideration that exceeds five thousand dollars in value.
(2) A director or officer is deemed to have a material interest in a material contract in which any of the following persons is a party or in which they have a material interest:
(a) the spouse of the director or officer;
(b) the parent, child, grandparent, grandchild, brother or sister of the director or officer or of the spouse of the director or officer;
(c) the spouse of any person mentioned in clause (b).
(3) A director or officer is deemed to have a material interest in a material contract involving another person where the director or officer is
(a) a creditor of that person for a debt that is in excess of five thousand dollars;
(b) a guarantor of the debts of that person in an amount that is in excess of five thousand dollars;
(c) the owner or beneficial owner of not less than twenty per cent of the issued shares of any class of shares of that person;
(d) a partner of that person; or
(e) a director or officer of that person.
(4) In this Section, "officer" includes a committee member, general manager or agent of a credit union.
(5) For the purpose of this Section, a material contract does not include
(a) an arrangement by way of security for money lent to or obligations undertaken by a director, officer or employee of the credit union for the benefit of the credit union;
(b) a contract relating primarily to the remuneration of directors or officers of the credit union;
(c) a contract for indemnity or insurance pursuant to Section 102; or
(d) loans made to directors, officers or employees in the ordinary course of the credit union's business and in compliance with this Act and the regulations, the charter by-laws and the loan policies of the credit union.
(6) A director or officer of a credit union who
(a) is a party to a material contract or proposed material contract with the credit union; or
(b) has a material interest in a contract or proposed contract between a person and the credit union,
is deemed to have a conflict of interest with the credit union and shall disclose in writing to the credit union and request to have entered in the minutes of meetings of directors, the nature and extent of the interest and shall not participate in any vote conducted by the directors or of a committee of the credit union relating to the material contract or proposed material contract.
(7) The onus is upon the director or officer and the credit union to demonstrate
(a) that the terms of any loan in which the director or officer has a material interest are no more favourable than those offered by the credit union in the ordinary course of business; and
(b) for the purpose of subsection (1), that it is reasonable that the services or property be obtained or supplied and such services or property are normally provided to the public in the ordinary course of business by the director or officer.
(8) A director or officer shall make the disclosure required by subsection (6) forthwith upon the director or officer becoming aware of the conflict of interest in the manner prescribed by regulation.
(9) For the purpose of this Section, general notice to the directors by a director or officer, declaring that the director is a director or officer of or is to be regarded as having a material interest in any contract made with a person, is a sufficient declaration of interest in relation to any contract so made.
(10) A contract or transaction in which a director or officer has a conflict of interest is neither void nor voidable by reason only of that conflict of interest or by reason only that a director with a conflict of interest is present at or is counted to determine the presence of a quorum of a meeting of directors or a committee of directors that authorized the contract or transaction, if the director or officer disclosed the conflict of interest in accordance with this Section, did not participate in the vote to authorize such contract or transaction and the contract or transaction was approved by the directors or the members and it was reasonable and fair to the credit union at the time it was approved.
(11) Where a director votes on a resolution in which the director has declared a conflict of interest, the contract or transaction that is the subject of the resolution will only be valid if it is approved by not less than two thirds of the votes cast by the members at a special meeting of the credit union.
(12) Where a director or officer of a credit union fails to disclose a conflict of interest in accordance with this Section or participates in a vote which is not subsequently ratified by the members, the court may, upon the application of the credit union or a member of the credit union, set aside the contract or transaction on such terms as it sees fit.
(13) A director or officer of a credit union who, without reasonable cause, fails to disclose a conflict of interest in accordance with this Section is guilty of an offence and liable on summary conviction to a fine not exceeding five thousand dollars and such director or officer, on conviction, shall cease to hold office and shall not be eligible for election as a director or for appointment as an officer of a credit union for a period of five years after the date of the conviction. 1994, c. 4, s. 96.
97 An auditor shall promptly report to the board of directors and the Superintendent any breach of a provision of Section 96 of which the auditor is aware and, if the board of directors does not act to rectify the breach within a reasonable period of time, the auditor shall promptly report the failure to rectify to the Superintendent. 1994, c. 4, s. 97.
98 Subject to the articles and charter by-laws,
(a) the directors may designate the officers of the credit union, elect or appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the credit union except powers to
(ii) fill a vacancy among the directors,
(iii) issue or redeem securities, except in the manner and on the terms authorized by the directors, or
(iv) approve a financial statement of a kind referred to in Section 105;
(b) the directors may elect or appoint committees and delegate powers, duties and responsibilities to them, except powers to do anything referred to in clause (a);
(c) a director may become an officer of the credit union and may become a member of a committee; and
(d) two or more offices of the credit union may be held by the same person. 1994, c. 4, s. 98.
99 Subject to the articles and the by-laws, the directors of a credit union may fix the remuneration of the directors, officers, committee members, delegates and employees of the credit union. 1994, c. 4, s. 99.
100 (1) Every director and officer of a credit union, in exercising the powers and discharging the duties of a director or officer, shall
(a) act honestly and in good faith with the view to the best interest of the credit union; and
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
(2) Every director and officer of a credit union shall comply with this Act and the regulations, and the articles and charter by-laws of the credit union.
(3) No provision in a contract, the articles, the by-laws or a resolution relieves a director or officer from the duty to act in accordance with this Act and the regulations or relieves the director or officer from liability for a breach of this Act or the regulations.
(4) This Section is in addition to and not a derogation of any other enactment or rule of law relating to the duty or liability of directors or officers of a credit union. 1994, c. 4, s. 100.
101 (1) A director who is present at a meeting of directors is deemed to have consented to any resolution passed or action taken at the meeting, unless the director
(a) requests that the director's dissent be or the dissent is entered in the minutes of the meeting;
(b) sends a written dissent to the secretary of the meeting before the meeting is adjourned; or
(c) sends a dissent by registered mail to the registered office of the credit union immediately after the meeting is adjourned.
(2) A director who votes for or consents to a resolution is not entitled to dissent pursuant to subsection (1).
(3) A director who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented thereto unless, within seven days after becoming aware of the resolution, the director
(a) causes the director's dissent to be placed with the minutes of the meeting; or
(b) sends a dissent by registered mail to the registered office of the credit union.