Deposit Acceptance

Deposit acceptance

556. (1) Subject to this Part, an authorized foreign bank may, without the intervention of any other person,

    (a) accept a deposit from any person whether or not the person is qualified by law to enter into contracts; and

    (b) pay all or part of the principal of the deposit and all or part of the interest on it to or to the order of that person.

Exception

(2) Paragraph (1)(b) does not apply if, before payment, the money deposited in the authorized foreign bank pursuant to paragraph (1)(a) is claimed by some other person

    (a) in any action or proceeding to which the authorized foreign bank is a party and in respect of which service of a writ or other process originating that action or proceeding has been made on the authorized foreign bank, or

    (b) in any other action or proceeding pursuant to which an injunction or order made by the court requiring the authorized foreign bank not to make payment of that money or make payment of it to some person other than the depositor has been served on the authorized foreign bank,

and, if a claim is made, the deposited money may be paid to the depositor with the consent of the claimant, or to the claimant with the consent of the depositor.

Execution of trust

(3) An authorized foreign bank is not bound to see to the execution of any trust, whether express or arising by operation of law, to which a deposit made under the authority of this Act is subject.

Unclaimed Balances

Unclaimed balances

557. (1) Where

    (a) a deposit has been made in Canada that is payable in Canada in Canadian currency and in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor during a period of ten years

      (i) from the day on which the fixed period terminated, in the case of a deposit made for a fixed period, and

      (ii) from the day on which the last transaction took place or a statement of account was last requested or acknowledged by the creditor, whichever is later, in the case of any other deposit, or

    (b) a cheque, draft or bill of exchange (including any of those instruments drawn by one branch of an authorized foreign bank on another of its branches but not including one issued in payment of a dividend on the capital of an authorized foreign bank) payable in Canada in Canadian currency has been issued, certified or accepted by an authorized foreign bank in Canada and no payment has been made in respect of it for a period of ten years after the date of issue, certification, acceptance or maturity, whichever is later,

the authorized foreign bank shall pay to the Bank of Canada not later than December 31 in each year an amount equal to the principal amount of the deposit or instrument, plus interest, if any, calculated in accordance with the terms of the deposit or instrument, and payment accordingly discharges the authorized foreign bank from all liability in respect of the deposit or instrument.

Particulars

(2) An authorized foreign bank shall, on making a payment pursuant to subsection (1), provide the Bank of Canada, for each deposit or instrument in respect of which the payment is made, with all the particulars of the deposit or instrument listed in subsection 602(3) or 603(2), as the case may be, current as of the day the payment is made.

Payment to claimant

(3) Subject to section 22 of the Bank of Canada Act, where payment has been made to the Bank of Canada under subsection (1) in respect of any deposit or instrument, and if payment is demanded or the instrument is presented at the Bank of Canada by the person who, but for that section, would be entitled to receive payment of the deposit or instrument, the Bank of Canada is liable to pay, at its agency in the province in which the deposit or instrument was payable, an amount equal to the amount so paid to it together with interest, if interest was payable under the terms of the deposit or instrument,

    (a) for a period not exceeding ten years from the day on which the payment was received by the Bank of Canada until the date of payment to the claimant; and

    (b) at any rate and computed in any manner that the Minister determines.

Enforcing liability

(4) The liability of the Bank of Canada under subsection (3) may be enforced by action against the Bank of Canada in the court in the province in which the deposit or instrument was payable.

Notice of unpaid amount

558. (1) An authorized foreign bank shall mail to each person

    (a) to whom a deposit referred to in paragraph 557(1)(a) is payable, or

    (b) to whom or at whose request an instrument referred to in paragraph 557(1)(b) was issued, certified or accepted,

at the person's recorded address, in so far as is known to the authorized foreign bank, a notice stating that the deposit or instrument remains unpaid.

When notice to be given

(2) The notice shall be given during the month of January next following the end of the first two-year period, and also during the month of January next following the end of the first five-year period,

    (a) after the fixed period has terminated, in the case of a deposit made for a fixed period;

    (b) in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor, in the case of any other deposit; and

    (c) in respect of which the instrument has remained unpaid, in the case of a cheque, draft or bill of exchange.

Interest and Charges

Accounts

Account charges

559. An authorized foreign bank shall not, directly or indirectly, charge or receive any sum for the keeping of an account unless the charge is made by express agreement between the authorized foreign bank and a customer or by order of a court.

Disclosure on opening account

560. (1) An authorized foreign bank shall not open or maintain an interest-bearing deposit account in Canada in the name of any natural person unless it discloses, in accordance with the regulations, to the person who requests the opening of the account, the rate of interest applicable to the account and how the amount of interest to be paid is to be calculated.

Exception

(2) Subsection (1) does not apply in respect of an interest-bearing deposit account that is opened with a balance in excess of one hundred thousand dollars or any greater amount that is prescribed.

Disclosure in advertise-
ments

561. No person shall authorize the publication, issue or appearance of any advertisement in Canada that indicates the rate of interest offered by an authorized foreign bank on an interest-bearing deposit or a debt obligation unless the advertisement discloses, in accordance with the regulations, how the amount of interest is to be calculated.

Disclosure regulations

562. The Governor in Council may make regulations respecting

    (a) the manner in which and the time at which disclosure is to be made by an authorized foreign bank of

      (i) interest rates applicable to debts of the authorized foreign bank and deposits with it, and

      (ii) the manner in which the amount of interest paid is to be calculated; and

    (b) any other matters or things that may be necessary to carry out the requirements of sections 560 and 561.

Definition of ``personal deposit account''

563. For the purposes of sections 564 to 566, ``personal deposit account'' means a deposit account in the name of one or more natural persons that is kept by that person or those persons for a purpose other than that of carrying on business.

Disclosure required on opening a deposit account

564. (1) Subject to subsection (2), an authorized foreign bank shall not open a deposit account in the name of a customer unless, at or before the time the account is opened, it provides the individual who requests the opening of the account with

    (a) a copy of the account agreement;

    (b) information about all charges applicable to the account;

    (c) information about how the customer will be notified of any increase in those charges and of any new charges applicable to the account;

    (d) information about the authorized foreign bank's procedures relating to complaints about the application of any charge applicable to the account; and

    (e) any other information that may be prescribed.

Exception

(2) Where a deposit account is not a personal deposit account and the amount of a charge applicable to the account cannot be established at or before the time the account is opened, the authorized foreign bank shall, as soon as is practicable after the amount is established, provide the customer in whose name the account is kept with a notice of the amount of the charge.

Manner of providing information

(3) The agreement or information to be provided under subsection (1) or (2) shall be provided in writing or in any manner that may be prescribed.

Information can be obtained in writing

(4) Whether or not the manner of providing the agreement or information is prescribed under subsection (3), the manner of providing the agreement or information to the individual shall be to provide it in writing if, at or before the time the account is opened, the individual requests the authorized foreign bank to provide it in writing.

Individual to be informed

(5) At or before the time the account is opened, the authorized foreign bank shall inform the individual that the agreement and the information will be provided in writing at the individual's request.

Disclosure of charges

565. An authorized foreign bank shall disclose, in the prescribed manner and at the prescribed time, to its customers and to the public, the charges applicable to deposit accounts with the authorized foreign bank and the usual amount, if any, charged by it for services normally provided to its customers and to the public.

No increase or new charges without disclosure

566. (1) An authorized foreign bank shall not increase any charge applicable to a personal deposit account with the authorized foreign bank or introduce any new charge applicable to a personal deposit account with the authorized foreign bank unless it discloses the charge in the prescribed manner and at the prescribed time to the customer in whose name the account is kept.

Mandatory disclosure

(2) An authorized foreign bank shall not increase any charge for any service that is prescribed in relation to a deposit account, other than a personal deposit account, with the authorized foreign bank, or introduce any new charge for any of those services unless the authorized foreign bank discloses the charge in the prescribed manner and at the prescribed time to the customer in whose name the account is kept.

Borrowing Costs

Definition of ``cost of borrowing''

567. For the purposes of this section and sections 568 to 574, ``cost of borrowing'' means, in respect of a loan made by an authorized foreign bank,

    (a) the interest or discount applicable to the loan; and

    (b) any charges in connection with the loan that are payable by the borrower to the authorized foreign bank or to any person from whom the authorized foreign bank receives any charges directly or indirectly and that are prescribed to be included in the cost of borrowing.

Disclosing borrowing costs

568. (1) An authorized foreign bank shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 569, has, in the prescribed manner, been disclosed by the authorized foreign bank or otherwise as prescribed to the borrower at or before the time when the loan is made.

Non-
application

(2) Subsection (1) does not apply in respect of

    (a) a loan in excess of two hundred and fifty thousand dollars or any other amount that may be prescribed, where the loan is secured by a mortgage on real property;

    (b) a loan in excess of one hundred thousand dollars or any other amount that may be prescribed, where the loan is not secured by a mortgage on real property; or

    (c) a loan that is one of a prescribed class of loans.

Calculating borrowing costs

569. The cost of borrowing shall be calculated, in the prescribed manner, on the basis that all obligations of the borrower are duly fulfilled and shall be expressed as a rate per annum and, in prescribed circumstances, as an amount in dollars and cents.

Additional disclosure

570. (1) Where an authorized foreign bank makes a loan in respect of which the disclosure requirements of section 568 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the authorized foreign bank shall disclose to the borrower, in accordance with the regulations,

    (a) whether the borrower has the right to repay the amount borrowed before the maturity of the loan and, if applicable,

      (i) particulars of the circumstances in which the borrower may exercise that right, and

      (ii) whether, in the event that the borrower exercises the right, any portion of the cost of borrowing is to be rebated, the manner in which the rebate is to be calculated or, if a charge or penalty will be imposed on the borrower, the manner in which the charge or penalty is to be calculated; and

    (b) in the event that an amount borrowed is not repaid at maturity or, if applicable, an instalment is not paid on the day the instalment is due to be paid, particulars of the charges or penalties to be paid by the borrower because of the failure to repay or pay in accordance with the contract governing the loan.

Disclosure re charge cards

(2) In addition to disclosing the costs of borrowing and any charges or penalties described in paragraph (1)(b) in respect of any loan obtained through the use of a payment, credit or charge card, an authorized foreign bank that issues one of those cards in Canada to a natural person shall, in accordance with the regulations, disclose to the person particulars of the person's rights and obligations and any charges for which the person is responsible by reason of accepting or using the card.

Disclosure in advertising

571. No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to loans offered to natural persons by an authorized foreign bank and purporting to indicate a rate of interest or other charges to be paid by the borrower, unless the advertisement discloses the cost of borrowing in accordance with the regulations.

Regulations re borrowing costs

572. The Governor in Council may make regulations

    (a) respecting the manner in which and the time at which the cost of borrowing and any rebate of the cost of borrowing are to be disclosed by an authorized foreign bank to a borrower;

    (b) respecting the manner of calculating the cost of borrowing;

    (c) respecting the circumstances under which the cost of borrowing is to be expressed as an amount in dollars and cents;

    (d) specifying any class of loans that are not to be subject to subsection 568(1) or 570(1) or section 571 or the regulations or any specified provisions of the regulations;

    (e) respecting the manner in which and the time at which any rights, obligations, charges or penalties referred to in sections 568 to 571 are to be disclosed;

    (f) prohibiting the imposition of any charge or penalty referred to in sections 570 and 571 or providing that the charge or penalty, if imposed, will not exceed a prescribed amount;

    (g) respecting the method of calculating the amount of rebate of the cost of borrowing, or the portion of the cost of borrowing referred to in subparagraph 570(1)(a)(ii); and

    (h) respecting any other matters or things that are necessary to carry out the purposes of sections 568 to 571.

Procedures for dealing with complaints

573. (1) An authorized foreign bank shall

    (a) establish procedures for dealing with complaints made by its customers about the application of charges applicable to deposit accounts or payment, credit or charge cards with the authorized foreign bank or the disclosure of or manner of calculating the cost of borrowing in respect of a loan made by the authorized foreign bank;

    (b) designate one of its officers or employees in Canada to be responsible for implementing those procedures; and

    (c) designate one or more of its officers or employees in Canada to receive and deal with those complaints.

Procedures to be filed with Superinten-
dent

(2) An authorized foreign bank shall file with the Superintendent a copy of the procedures it establishes pursuant to subsection (1).