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Bill C-38

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First Reading

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	(B) information that relates to the business of a permitted entity, as defined in subsection 386(1), or
	(C) any other prescribed information,
	(ii) providing advisory or other services in the design, development or implementation of information management systems,
	(iii) designing, developing or marketing computer software, and
	(iv) designing, developing, manufacturing or selling, as an ancillary activity to any activity referred to in any of subparagraphs (i) to (iii) that the association is engaging in, computer equipment integral to the provision of information services related to the business of financial institutions or to the provision of financial services;
	(h) with the prior written approval of the Minister, develop, design, hold, manage or otherwise deal with data transmission systems, information sites, communication devices or information platforms or portals that are used
	(i) to provide information that is primarily financial or economic in nature,
	(ii) to provide information that relates to the business of a permitted entity, as defined in subsection 386(1), or
	(iii) for a prescribed purpose or in prescribed circumstances; and
	(i) if it is a retail association,
	(i) act as a financial agent,
	(ii) provide investment counselling services and portfolio management services,
	(iii) issue payment, credit or charge cards and, in cooperation with others including other financial institutions, operate a payment, credit or charge card plan,
	(iv) promote merchandise and services to the holders of any payment, credit or charge card issued by the association,
	(v) engage in the sale of
	(A) tickets, including lottery tickets, on a non-profit public service basis in connection with special, temporary and infrequent non-commercial celebrations or projects that are of local, municipal, provincial or national interest,
	(B) urban transit tickets, and
	(C) tickets in respect of a lottery sponsored by the federal government or a provincial or municipal government or an agency of any such government or governments, and
	(vi) act as receiver, liquidator or sequestrator.
Specialized business management or advisory services	(2) A retail association may engage, under prescribed terms and conditions, if any are prescribed, in specialized business management or advisory services.
Restriction	(3) Except as authorized by or under this Act, an association shall not deal in goods or engage in any trade or business.
Regulations	(4) The Governor in Council may make regulations
	(a) respecting what an association may or may not do with respect to the provision of services and products referred to in paragraphs (1)(g) and (h) and subsection (2) ; and
	(b) imposing terms and conditions in respect of the provision of investment counselling and portfolio management services and the provision of services and products referred to in paragraphs (1)(g) and (h) and subsection (2) .
	296. Paragraph 377(a) of the Act is replaced by the following:
	(a) act as agent for any entity referred to in paragraph 375(1)(a), any member of a cooperative credit society or, if the association is a retail association , any other person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 386(1) or a prescribed entity and may enter into an arrangement with any person in respect of the provision of that service; or
	297. The Act is amended by adding the following after section 378:
Restriction on deposit taking	378.1 A retail association shall not accept deposits in Canada unless it is a member institution within the meaning of section 2 of the Canada Deposit Insurance Corporation Act.
	298. (1) The portion of subsection 379(1) of the Act before paragraph (a) is replaced by the following:
Restriction on guarantees	379. (1) An association shall not guarantee on behalf of any person the payment or repayment of any sum of money unless
1997, c. 15, s. 139	(2) Subsection 379(2) of the French version of the Act is replaced by the following:
Exception	(2) Dans les cas où la personne visée au paragraphe (1) est une filiale de l'association garante, celle-ci peut garantir une somme qui n'est pas fixe.
	(3) Subsection 379(3) of the Act is replaced by the following:
Exception	(3) Paragraph (1)(a) does not apply in respect of a guarantee given on behalf of a central, within the meaning of section 472, or a local cooperative credit society if the payment guaranteed represents the obligation of the central or the local cooperative credit society to settle for payment items in accordance with the by-laws and rules of the Canadian Payments Association.
	299. Sections 382 and 383 of the Act are replaced by the following:
Restriction on leasing	382. An association shall not engage in Canada in any personal property leasing activity in which a financial leasing entity , within the meaning of subsection 386(1), is not permitted to engage.
Restriction on residential mortgages	382.1 (1) A retail association shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance such a loan, if the amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the property, would exceed 75% of the value of the property at the time of the loan.
Exception	(2) Subsection (1) does not apply in respect of
	(a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or under which a different limit on the value of property on the security of which the association may make a loan is established;
	(b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;
	(c) the acquisition by the association from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the association to the entity against the issue of such securities; or
	(d) a loan secured by a mortgage where
	(i) the mortgage is taken back by the association on a property disposed of by the association, including where the disposition is by way of a realization of a security interest, and
	(ii) the mortgage secures payment of an amount payable to the association for the property.
Policies re security interests	383. (1) The directors of an association shall establish and the association shall adhere to policies regarding the creation of security interests in property of the association to secure obligations of the association and the acquisition by the association of beneficial interests in property that is subject to security interests.
Order to amend policies	(2) The Superintendent may, by order, direct an association to amend its policies as specified in the order.
Compliance	(3) An association shall comply with an order made under subsection (2) within the time specified in the order.
Regulations and guidelines	383.1 The Governor in Council may make regulations and the Superintendent may make guidelines respecting the creation by an association of security interests in its property to secure obligations of the association and the acquisition by the association of beneficial interests in property that is subject to security interests.
Exception	383.2 Sections 383 and 383.1 do not apply in respect of a security interest created by an association to secure an obligation of the association to the Bank of Canada or the Canada Deposit Insurance Corporation.
	300. Subsection 385(1) of the Act is replaced by the following:
Restriction on partnerships	385. (1) Except with the approval of the Superintendent, an association may not be a general partner in a limited partnership or a partner in a general partnership.
	301. The Act is amended by adding the following after section 385:
	Deposit Acceptance
Deposit acceptance	385.01 (1) A retail association 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 that principal to or to the order of that person.
Exception	(2) Paragraph (1)(b) does not apply if, before payment, the money deposited in the association pursuant to paragraph (1)(a) is claimed by some other person
	(a) in any action or proceeding to which the association 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 association; or
	(b) in any other action or proceeding pursuant to which an injunction or order made by the court requiring the association not to make payment of that money or make payment thereof to some person other than the depositor has been served on the association.
	If such a claim is made, the money so deposited 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	385.02 (1) An association is not bound to see to the execution of any trust to which any deposit made under the authority of this Act is subject.
Payment when association has notice of trust	(2) Subsection (1) applies regardless of whether the trust is express or arises by the operation of law, and it applies even when the association 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.
	Unclaimed Balances
Unclaimed balances	385.03 (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) in the case of a deposit made for a fixed period, from the day on which the fixed period terminated, and
	(ii) in the case of any other deposit, 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, or
	(b) a cheque, draft or bill of exchange (including any such instrument drawn by one branch of a retail association on another branch of the association but not including such an instrument issued in payment of a dividend on the capital of an association) payable in Canada in Canadian currency has been issued, certified or accepted by an association in Canada and no payment has been made in respect of the instrument for a period of ten years after the date of issue, certification, acceptance or maturity, whichever is later,
	the retail association 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 association from all liability in respect of the deposit or instrument.
Particulars	(2) A retail association shall, on making a payment under 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 431.1(3) or 431.2(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, if a 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 the rate and computed in the 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.
Application of subsection (1)	(5) Subsection (1) applies only in respect of deposits made, and cheques, drafts and bills of exchange issued, certified or accepted, after the day that subsection comes into force.
Notice of unpaid amount	385.04 (1) A retail association shall mail to each person, insofar as is known to the association, to whom a deposit referred to in paragraph 385.03(1)(a) is payable, or to whom or at whose request an instrument referred to in paragraph 385.03(1)(b) was issued, certified or accepted, at the person's recorded address, a notice stating that the deposit or instrument remains unpaid.
When notice to be given	(2) A notice required by subsection (1) must 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) in the case of a deposit made for a fixed period, after the fixed period has terminated;
	(b) in the case of any other deposit in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor; and
	(c) in the case of a cheque, draft or bill of exchange, in respect of which the instrument has remained unpaid.

Bill C-38

Deposit Acceptance

Unclaimed Balances