BILL C-38 - First Reading

Restriction on leasing	550. An authorized foreign bank shall not engage in Canada in any personal property leasing activity in which a financial leasing entity as defined in subsection 464(1) is not permitted to engage.
1999, c. 28, s. 35(1)	137. Section 552 of the Act is repealed.
1999, c. 28, s. 35(1)	138. Subsection 553.1(1) of the Act is replaced by the following:
Restriction on partnerships	553.1 (1) Except with the approval of the Superintendent, an authorized foreign bank may not, in respect of its business in Canada, be a general partner in a limited partnership or a partner in a general partnership.
1999, c. 28, s. 35(1)	139. Subsection 556(3) of the Act is replaced by the following:
Execution of trust	(3) An authorized foreign bank is not, in respect of its business in Canada, bound to see to the execution of any trust to which a deposit made under the authority of this Act is subject.
Payment when authorized foreign bank has notice of trust	(4) Subsection (3) applies regardless of whether the trust is express or arises by the operation of law, and it applies even when the authorized foreign bank has notice of the trust if it acts on the order of or under the authority of the holder or holders of the account into which the deposit is made.
1999, c. 28, s. 35(1)	140. The headings before section 559 of the Act are replaced by the following:
	Accounts
1999, c. 28, s. 35(1)	140.1 Subsection 560(2) of the Act is replaced by the following:
Exception	(2) Subsection (1) does not apply in respect of an interest-bearing deposit account that is opened with a deposit in excess of $150,000 or any greater amount that is prescribed.
1999, c. 28, s. 35(1)	141. (1) The portion of subsection 564(1) of the Act before paragraph (a) is replaced by the following:
Disclosure required on opening a deposit account	564. (1) Subject to subsections (2) to (4) , 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 in writing to the individual who requests the opening of the account
1999, c. 28, s. 35(1)	(2) Subsections 564(2) to (5) of the Act are replaced by the following:
Exception	(2) If 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 in writing of the amount of the charge.
Exception	(3) If an authorized foreign bank has a deposit account in the name of a customer and the customer by telephone requests the opening of another deposit account in the name of the customer, the authorized foreign bank shall not open such an account unless it provides the customer orally with any information prescribed at or before the time the account is opened.
Disclosure in writing	(4) If an authorized foreign bank opens an account under subsection (3), it shall, not later than seven business days after the account is opened, provide to the customer in writing the agreement and information referred to in subsection (1).
Right to close account	(5) A customer may, within 14 business days after a deposit account is opened under subsection (3), close the account without charge and in such case is entitled to a refund of any charges related to the operation of the account, other than interest charges, incurred while the account was open.
Regulations	(6) For the purposes of subsection (4), the Governor in Council may make regulations prescribing circumstances in which, and the time when, the agreement and information will be deemed to have been provided to the customer.
1999, c. 28, s. 35(1)	142. The heading before section 567 of the Act is converted from roman type to italics.
	143. Section 567 of the Act, as enacted by subsection 35(4) of An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts, being chapter 28 of the Statutes of Canada, 1999, is replaced by the following:
Definition of ``cost of borrowing''	567. For the purposes of this section and sections 567.1 to 574, ``cost of borrowing'' in respect of a loan made by an authorized foreign bank means
	(a) the interest or discount applicable to the loan;
	(b) any amount charged in connection with the loan that is payable by the borrower to the authorized foreign bank; and
	(c) any charge prescribed to be included in the cost of borrowing.
	For those purposes, however, ``cost of borrowing'' does not include any charge prescribed to be excluded from the cost of borrowing.
	144. The Act is amended by adding the following before section 573:
	Complaints
1999, c. 28, s. 35(1)	145. (1) Paragraph 573(1)(a) of the Act is replaced by the following:
	(a) establish procedures for dealing with complaints made by persons having requested or received products or services from the authorized foreign bank;
	(2) If this section comes into force before paragraph 573(1)(a) of the Act, as enacted by subsection 35(9) of An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts, being chapter 28 of the Statutes of Canada, 1999, comes into force, then subsection 35(9) of that Act is repealed.
1999, c. 28, s. 35(1)	(3) Subsection 573(2) of the Act is replaced by the following:
Procedures to be filed with Commissioner	(2) An authorized foreign bank shall file with the Commissioner a copy of its procedures established under paragraph (1)(a) .
	146. The Act is amended by adding the following after section 573:
Obligation to be member	573.1 An authorized foreign bank shall be a member of any body corporate that is designated under subsection 455.1(1).
1999, c. 28, s. 35(1)	147. (1) Section 574 of the Act is replaced by the following:
Information on contacting Agency	574. (1) An authorized foreign bank shall, in the prescribed manner, provide a person requesting or receiving a product or service from it with prescribed information on how to contact the Agency if the person has a complaint about an arrangement referred to in subsection 570(3), a payment, credit or charge card, the disclosure of or manner of calculating the cost of borrowing in respect of a loan, or about any other obligation of the authorized foreign bank under a consumer provision.
Report	(2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act , respecting
	(a) procedures for dealing with complaints established by authorized foreign banks pursuant to paragraph 573(1)(a); and
	(b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from an authorized foreign bank.
	(2) If this section comes into force before subsection 574(1) of the Act, as enacted by subsection 35(10) of An Act to amend the Bank Act, the Winding-up and Restructuring Act and other Acts relating to financial institutions and to make consequential amendments to other Acts, being chapter 28 of the Statutes of Canada, 1999, then subsection 35(10) of that Act is repealed.
1999, c. 28, s. 35(1)	148. (1) Subsections 576.1(1) to (3) of the Act are replaced by the following:
Restriction on tied selling	576.1 (1) An authorized foreign bank shall not impose undue pressure on, or coerce, a person to obtain a product or service from a particular person, including the authorized foreign bank and any of its affiliates, as a condition for obtaining another product or service from the authorized foreign bank.
Favourable authorized foreign bank product or service tied to other sale	(2) For greater certainty, an authorized foreign bank may offer a product or service to a person on more favourable terms or conditions than the authorized foreign bank would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from any particular person.
Favourable other sale tied to authorized foreign bank product or service	(3) For greater certainty, an affiliate of an authorized foreign bank may offer a product or service to a person on more favourable terms or conditions than the affiliate would otherwise offer, where the more favourable terms and conditions are offered on the condition that the person obtain another product or service from the authorized foreign bank.
	(2) Section 576.1 of the Act is amended by adding the following after subsection (4):
Disclosure	(4.1) An authorized foreign bank shall disclose the prohibition on coercive tied selling set out in subsection (1) in a statement in plain language that is clear and concise, displayed and available to customers and the public at all of its branches.
	149. The Act is amended by adding the following after section 576.1:
Regulations re disclosure	576.2 The Governor in Council may, subject to any other provisions of this Act relating to the disclosure of information, make regulations respecting the disclosure of information by authorized foreign banks or any prescribed class of authorized foreign banks, including regulations respecting
	(a) the information that must be disclosed, including information relating to
	(i) any product or service or prescribed class of products or services offered by them,
	(ii) any of their policies, procedures or practices relating to the offer by them of any product or service or prescribed class of products or services,
	(iii) anything they are required to do or to refrain from doing under a consumer provision, and
	(iv) any other matter that may affect their dealings with customers or the public;
	(b) the manner, place and time in which and the persons to whom information is to be disclosed; and
	(c) the content and form of any advertisement by authorized foreign banks or any prescribed class of authorized foreign banks relating to any matter referred to in paragraph (a).
1999, c. 28, s. 35(1)	150. Section 579 of the Act is replaced by the following:
Effect of writ, etc.	579. (1) Subject to subsections (3) and (4), the following documents are binding on property belonging to a person and in the possession of a authorized foreign bank, or on money owing to a person by reason of a deposit account in a authorized foreign bank, only where the document or a notice of it is served at the branch of the authorized foreign bank that has possession of the property or that is the branch of account in respect of the deposit account, as the case may be:
	(a) a writ or process originating a legal proceeding or issued in or pursuant to a legal proceeding;
	(b) an order or injunction made by a court;
	(c) an instrument purporting to assign, perfect or otherwise dispose of an interest in the property or the deposit account; or
	(d) a notice of a support order or support provision.
Notices	(2) Any notification sent to a authorized foreign bank with respect to a customer of the authorized foreign bank, other than a document referred to in subsection (1) or (3), constitutes notice to the authorized foreign bank and fixes the authorized foreign bank with knowledge of its contents only if sent to and received at the branch of the authorized foreign bank that is the branch of account of an account held in the name of that customer.
Support orders and support provisions	(3) A notice of a support order or support provision may be served at an office of a authorized foreign bank designated by the regulations in respect of a province if the order or provision can be enforced under the laws of that province.
Effect of service	(4) A notice of a support order or support provision served under subsection (3) at a designated office of a authorized foreign bank in a province does not have effect until the second day following the day of service.
Regulations	(5) The Governor in Council may make regulations
	(a) designating, in relation to any authorized foreign bank, a place in any province for the service of notices of support orders and support provisions under subsection (3);
	(b) prescribing the manner in which a authorized foreign bank shall publicize the locations of designated offices of the authorized foreign bank; and
	(c) respecting the information that must accompany notices of support orders and support provisions.
Definitions	(6) The definitions in this subsection apply in this section.
``designa- ted office'' « bureau désigné »	``designated office'' means a place designated under subsection (3);
``support order'' « ordonnance alimentaire »	``support order'' means an order or judgment or interim order or judgment for family financial support, or any process under the laws of a province for the enforcement of any such order or judgment;
``support provision'' « disposition alimentaire »	``support provision'' means a provision of an agreement relating to the payment of maintenance or family financial support.
1999, c. 28, s. 35(1)	151. Subparagraph 582(1)(b)(i) of the Act is replaced by the following:
	(i) five million dollars, and
1999, c. 28, s. 35(1)	152. Subsection 594(1) of the Act is replaced by the following:
Auditor's report to principal officer	594. (1) The auditor of an authorized foreign bank shall make a report to the principal officer of the authorized foreign bank in writing on the annual return not later than five months after the end of the financial year in respect of which the annual return is prepared.
1999, c. 28, s. 35(1)	153. (1) Paragraph 597(1)(b) of the Act is replaced by the following:
	(b) accounting records respecting its business in Canada;
	(2) Section 597 of the Act is amended by adding the following after subsection (6):
Electronic access	(7) An authorized foreign bank may make the information contained in records referred to in subsection (1) available to persons by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing the records in intelligible written form within a reasonable time.
1999, c. 28, s. 35(1)	154. Subsection 606(1) of the Act is replaced by the following:
Confidential information	606. (1) Subject to sections 608 and 609, all information regarding the business or affairs of an authorized foreign bank, or regarding a person dealing with an authorized foreign bank, that is obtained by the Superintendent, or by any person acting under the direction of the Superintendent, as a result of the administration or enforcement of any Act of Parliament, and all information prepared from that information , is confidential and shall be treated accordingly.
1999, c. 28, s. 35(1)	155. Section 612 of the Act is replaced by the following:
Report respecting disclosure	612. The Superintendent shall prepare a report respecting the disclosure of information by authorized foreign banks and describing the state of progress made in enhancing the disclosure of information in the financial services industry. The report is to be included in the report referred to in section 40 of the Office of the Superintendent of Financial Institutions Act.

Accounts

Complaints