Bill C-9

Consequential Amendment to the Office of the Superintendent of Financial Institutions act

1883. Subsection 22(1.1) of the Office of the Superintendent of Financial Institutions Act is replaced by the following:

(1.1) Despite subsection (1), subsections 606(1) and 636(1) of the Bank Act, subsection 435(1) of the Cooperative Credit Associations Act, subsection 672(1) of the Insurance Companies Act and subsection 503(1) of the Trust and Loan Companies Act, the Superintendent may disclose to the Financial Transactions and Reports Analysis Centre of Canada established by section 41 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act information relating to policies and procedures that financial institutions adopt to ensure their compliance with Parts 1 and 1.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Coming into Force

1884. The provisions of this Part come into force on a day or days to be fixed by order of the Governor in Council.

PART 15

CANADA POST CORPORATION ACT

1885. Section 15 of the Canada Post Corporation Act is amended by adding the following after subsection (2):

(3) The exclusive privilege referred to in subsection 14(1) does not apply to letters intended for delivery to an addressee outside Canada.

PART 16

CANADA DEPOSIT INSURANCE CORPORATION ACT

Amendments to the Act

1886. Subsection 11(2) of the Canada Deposit Insurance Corporation Act is amended by adding the following after paragraph (f):

(f.1) for the purpose of facilitating the Corporation’s exercise of its functions either under section 14 or in the event that an order is made under subsection 39.13(1), respecting the information that the Corporation can require from member institutions with respect to their deposit liabilities and the time within and manner in which it is to be provided to the Corporation;

(f.2) respecting the capabilities that the Corporation can require member institutions to have to facilitate the Corporation’s exercise of its functions either under section 14 or in the event that an order is made under subsection 39.13(1), including the capability to

(i) identify their deposit liabilities, and

(ii) temporarily prevent withdrawals of deposit liabilities;

1887. Section 11 of the Act is amended by adding the following after subsection (2):

(2.1) For the purposes of paragraphs (2)(f.1) and (f.2), “deposit liabilities” include deposits referred to in paragraphs 12(a) to (c) and liabilities referred to in subsections 2(2), (5) and (6) of the schedule.

1888. Paragraph 39.13(1)(c) of the Act is replaced by the following:

(c) direct the Minister to incorporate a federal institution designated in the order as a bridge institution and specify the date and time as of which the federal member institution’s deposit liabilities are assumed.

1889. Section 39.15 of the Act is amended by adding the following before subsection (8):

(7.2) The Corporation may assign to a bridge institution eligible financial contracts — including any claim under such contracts — that are between a federal member institution and an entity or any of the following entities provided that the Corporation assigns all of those eligible financial contracts to the bridge institution:

(a) another entity that is controlled — directly or indirectly — by the entity;

(b) another entity that controls — directly or indirectly — the entity; or

(c) another entity that is controlled — directly or indirectly — by the entity referred to in paragraph (b).

(7.3) If the eligible financial contracts are assigned to a bridge institution,

(a) the undertaking referred to in subsection (7.1) that is provided applies to all the eligible financial contracts that are assigned; and

(b) the federal member institution’s interest or, in Quebec, right in property that secures its obligations under an eligible financial contract that is assigned is transferred to the bridge institution.

1890. The portion of subsection 39.15(9) of the Act before the definition “eligible financial contract” is replaced by the following:

(9) The following definitions apply in this section.

1891. Subsection 39.202(1) of the Act is replaced by the following:

39.202 (1) A bridge institution shall assume a federal member institution’s deposit liabilities that are both insured by the Corporation and posted in the federal member institution’s records as of the date and time specified in the order referred to in paragraph 39.13(1)(c).

(1.1) Any interest accrued on the deposit liabilities referred to in subsection (1) is assumed by the bridge institution.

(1.2) Any deposit or withdrawal that is made on or before that date and time but is not posted in the records of the federal member institution as of that date and time, and any deposit or withdrawal made after that date and time, are deemed to be deposited with or withdrawn from, as the case may be, the bridge institution.

(1.3) Any interest accruing on the deposits referred to in subsection (1.2) is owed by the bridge institution.

1892. The schedule to the Act is amended by replacing “(Section 2)” after the heading “SCHEDULE” with “(Sections 2 and 26.01 and subsection 11(2.1))”.

Coming into Force

1893. Sections 1889 and 1890 come into force on the day on which subsection 245(7) of the Budget Implementation Act, 2009 comes into force or, if it is later, on the day on which this Act receives royal assent.

PART 17

FEDERAL CREDIT UNIONS

Bank Act

1894. (1) The definitions “affairs”, “personal representative” and “special resolution” in section 2 of the Bank Act are replaced by the following:

“affairs”, with respect to a bank, an authorized foreign bank or a bank holding company, means the relationships among the bank, authorized foreign bank or bank holding company and its affiliates and the shareholders, members, directors and officers of the bank, authorized foreign bank or bank holding company and its affiliates, but does not include the business of the bank, authorized foreign bank or bank holding company or any of its affiliates;

“personal representative” means a person who stands in place of and represents another person and, without limiting the generality of the foregoing, includes, as the circumstances require, a trustee, an executor, an administrator, a committee, a guardian, a tutor, a curator, an assignee, a receiver, an agent or an attorney of any person, but does not include a delegate;

“special resolution” means a resolution passed by a majority of not less than two thirds of the votes cast in respect of that resolution or signed by all the persons who are entitled to vote on that resolution;

(2) The definitions “détenteur” and “titre” ou “valeur mobilière” in section 2 of the French version of the Act are replaced by the following:

(3) The definition “ordinary resolution” in section 2 of the English version of the Act is replaced by the following:

“ordinary resolution” means a resolution passed by a majority of the votes cast in respect of that resolution;

(4) The definition “complainant” in section 2 of the Act is amended by striking out “or” at the end of paragraph (b), by adding “or” at the end of paragraph (c) and by adding the following after paragraph (c):

(d) a member or a former member of a federal credit union;

(5) The definition “recorded address” in section 2 of the Act is amended by striking out “and” at the end of paragraph (a) and by adding the following after that paragraph:

(a.1) in relation to a person who is a member of a federal credit union, the latest postal address of the person according to the members register, and

(6) The definition “holder” in section 2 of the English version of the Act is amended by striking out “and” at the end of paragraph (a), by adding the word “and” at the end of paragraph (b) and by adding the following after paragraph (b):

(c) in respect of the ownership of a membership share, the member who holds the membership share within the meaning of section 7.1;

(7) Paragraph (a) of the definition “secu-rity” in section 2 of the English version of the Act is replaced by the following:

(a) in relation to a body corporate, a share of any class of shares of the body corporate or a debt obligation of the body corporate, and includes a warrant of the body corporate, but does not include a deposit with a financial institution or any instrument evidencing such a deposit or, for greater certainty, a membership share, and

(8) Section 2 of the Act is amended by adding the following in alphabetical order:

“delegate” means a natural person appointed or elected to represent a member of a federal credit union at a meeting of members;

“federal credit union” means a bank that, within the meaning of section 12.1, is organized and carries on business on a cooperative basis;

“member”, in relation to a federal credit union, means a person who is one of the members of the federal credit union in accordance with subsection 47.04(4);

“membership share”, in relation to a federal credit union, means an ownership interest in the federal credit union that confers the rights referred to in subsection 79.1(1);

“members register”, in relation to a federal credit union, means the register referred to in section 254.1;

“patronage allocation” means an amount that a federal credit union allocates among its members based on the business done by them with or through the federal credit union;

(9) Section 2 of the English version of the Act is amended by adding the following in alphabetical order:

“share” does not include a membership share;

1895. Section 2.3 of the Act is amended by adding the following after paragraph (a):

(a.1) a federal credit union;

1896. Subsections 2.4(2) and (3) of the Act are replaced by the following:

(2) On the application of a bank or bank holding company, the Superintendent may determine that it is not or was not a distributing bank or distributing bank holding company, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of that bank or bank holding company or any holder of a membership share of that bank.

(3) The Superintendent may determine that members of a class of banks or bank holding companies are not or were not distributing banks or distributing bank holding companies, as the case may be, if the Superintendent is satisfied that the determination would not prejudice any security holder of a member of the class or any holder of a membership share of a bank that is a member of the class.

1897. (1) Subsection 3(1) of the Act is amended by adding the following after paragraph (a):

(a.1) a person controls a federal credit union if the person and all of the entities controlled by the person have the right to exercise more than 50 per cent of the votes that may be cast at an annual meeting or to elect the majority of the directors of the federal credit union;

(2) Section 3 of the Act is amended by adding the following after subsection (4):

(5) The Minister may, for any purpose of any provision of this Act that refers to control within the meaning of paragraph (1)(d), make guidelines respecting what constitutes such control of a federal credit union, including guidelines describing the policy objectives that the guidelines and the relevant provisions of the Act are intended to achieve and, if any such guidelines are made, the reference to paragraph (1)(d) in that provision is to be interpreted in accordance with the guidelines.

1898. The Act is amended by adding the following after section 7:

7.1 (1) For the purposes of this Act, a person is a holder of a membership share of a federal credit union if the person is the owner of one or more membership shares according to the federal credit union’s members register or is entitled to be entered in that register, or like record of the federal credit union, as the owner of one or more membership shares.

(2) A reference in this Act to the holding of a membership share by or in the name of any person is a reference to the fact that the person is registered or is entitled to be registered in a federal credit union’s members register, or like record of the federal credit union, as the holder of that membership share.

1899. (1) Section 8 of the Act is amended by adding the following after subsection (1):

(1.1) A person has a significant interest in the membership shares of a federal credit union if the aggregate of membership shares beneficially owned by the person and membership shares beneficially owned by entities controlled by the person exceeds 10 per cent of all of the outstanding membership shares.

(2) Section 8 of the Act is amended by adding the following after subsection (2):

(3) A person who has a significant interest in the membership shares of a federal credit union increases that significant interest in the membership shares if the person or any entity controlled by the person acquires beneficial ownership of additional membership shares, or acquires control of any entity that beneficially owns membership shares, of the federal credit union in such number as to increase the percentage of membership shares that are beneficially owned by the person and by any entities controlled by the person.

1900. The Act is amended by adding the following after section 9:

9.1 (1) For the purposes of Part VII, if two or more members have agreed, under any agreement, commitment or understanding, whether formal or informal, verbal or written, to act jointly or in concert in respect of the exercise of any right to vote at a meeting of members, those members are deemed to be a single member.

(2) For the purposes of this section, members are presumed not to have agreed to act jointly or in concert solely by reason of the fact that

(a) their membership voting rights are vested in the same delegate or delegates; or

(b) they exercise their membership voting rights in the same manner.

(3) If in the opinion of the Superintendent it is reasonable to conclude that an agreement, commitment or understanding referred to in subsection (1) exists by or among two or more members, the Superintendent may designate those members as members who have agreed to act jointly or in concert.

(4) A member contravenes a provision of Part VII if the member agrees to act jointly or in concert with one or more other members in such a manner that a deemed single member contravenes that provision.

9.2 (1) For the purposes of Part VII, if one or more members of a federal credit union and one or more shareholders of the federal credit union have agreed, under any agreement, commitment or understanding, whether formal or informal, verbal or written, to act jointly or in concert in respect of the exercise of their respective rights to vote, those persons are deemed to be a single person.

(2) For the purposes of this section, persons are presumed not to have agreed to act jointly or in concert solely by reason of the fact that

(a) one or more of the members is the proxyholder of one or more of the shareholders;

(b) one or more of the shareholders is a delegate of one or more of the members; or

(c) they exercise their respective voting rights in the same manner.

(3) If in the opinion of the Superintendent it is reasonable to conclude that an agreement, commitment or understanding referred to in subsection (1) exists by or among one or more members and one or more shareholders, the Superintendent may designate those members and shareholders as persons who have agreed to act jointly or in concert.

(4) A shareholder or a member contravenes a provision of Part VII if the shareholder or member agrees to act jointly or in concert with one or more other shareholders or members in such a manner that a deemed single person contravenes that provision.

1901. (1) Subsection 10(1) of the French version of the Act is replaced by the following:

(2) Subsection 10(1) of the Act is amended by striking out “or” at the end of paragraph (a), by adding “or” at the end of paragraph (b) and by adding the following after paragraph (b):

(c) in the case of a body corporate that is a federal credit union,

(i) the voting rights of the person and of entities controlled by the person exceed 10 per cent of the aggregate of the voting rights that may be exercised by members and shareholders, or

(ii) the aggregate of any shares and membership shares of the federal credit union beneficially owned by the person and by any entities controlled by the person represents ownership of greater than 25 per cent of the members’ and shareholders’ equity of the federal credit union.

(3) Section 10 of the Act is amended by adding the following after subsection (3):

(3.1) A person who has a substantial investment in a federal credit union under subparagraph (1)(c)(i) increases that substantial investment when the percentage of the voting rights of the person and of entities controlled by the person in relation to the aggregate of the voting rights that may be exercised by members and shareholders is increased for any reason.

(3.2) A person who has a substantial investment in a federal credit union under subparagraph (1)(c)(ii) increases that substantial investment when

(a) the person or any entity controlled by the person acquires beneficial ownership of additional shares or membership shares of the federal credit union in such number as to increase the percentage of the members’ and shareholders’ equity of the federal credit union represented by the aggregate of the shares and membership shares beneficially owned by the person and by entities controlled by the person; or

(b) the person or any entity controlled by the person acquires control of any entity that beneficially owns shares or membership shares of the federal credit union in such number as to increase the percentage of the members’ and shareholders’ equity of the federal credit union represented by the aggregate of the shares and membership shares beneficially owned by the person and by entities controlled by the person.

(4) Section 10 of the Act is amended by adding the following after subsection (4):

(4.1) For greater certainty,

(a) if a person has a substantial investment in a federal credit union under subparagraph (1)(c)(i) and the person, or any entity controlled by the person, purchases or otherwise acquires beneficial ownership of shares or membership shares of the federal credit union or acquires control of any entity that beneficially owns shares or membership shares of the federal credit union, the acquisition is deemed to cause the person to increase a substantial investment in the federal credit union if the percentage of the members’ and shareholders’ equity of the federal credit union represented by the aggregate of the shares and membership shares of the federal credit union beneficially owned by the person and by any entities controlled by the person exceeds 25 per cent of the members’ and shareholders’ equity of the federal credit union; or

(b) if a person has a substantial investment in a federal credit union under subparagraph (1)(c)(ii) and the person or any entity controlled by the person acquires voting rights in the federal credit union — or acquires control of any entity that has voting rights in the federal credit union — in such number that the percentage of the voting rights of the person and entities controlled by the person exceeds 10 per cent of the aggregate of the voting rights of the members and shareholders of the federal credit union, the acquisition is deemed to cause the person to increase a substantial investment in the federal credit union.

1902. The Act is amended by adding the following after section 12:

12.1 (1) For the purposes of this Act, a federal credit union is organized and carries on business on a cooperative basis if

(a) a majority of its members are natural persons;

(b) it provides financial services primarily to its members;

(c) membership in the federal credit union is wholly or primarily open, in a non-discriminatory manner, to persons who can use the services of the federal credit union and who are willing and able to accept the responsibilities of membership;

(d) each member has only one vote;

(e) a delegate has only one vote even though the delegate is a member or represents more than one member;

(f) dividends on any membership share are limited to the maximum percentage fixed in the federal credit union’s letters patent or by-laws; and

(g) surplus funds arising from the federal credit union’s operations are used

(i) to provide for the financial stability of the federal credit union,

(ii) to develop its business,

(iii) to provide or improve common serv- ices to members,

(iv) to provide for reserves or dividends on membership shares and shares,

(v) for community welfare or the propagation of cooperative enterprises, or

(vi) as a distribution to its members as a patronage allocation.

(2) Paragraph (1)(c) is subject to any restrictions in the by-laws of the federal credit union on the classes of persons to which membership may be available, as long as the restrictions are consistent with applicable laws with respect to human rights.

12.2 For greater certainty, a member of a federal credit union who is also a shareholder of the federal credit union may exercise the rights given to a shareholder by this Act for all shares held by the member.

1903. Section 18 of the Act is renumbered as subsection 18(1) and is amended by adding the following:

(2) The members of a federal credit union are not, as members, liable for any liability, act or default of the federal credit union except as otherwise provided by this Act.

1904. Section 22 of the Act is replaced by the following:

22. (1) On the application of one or more persons made in accordance with this Act, the Minister may, subject to this Part, issue letters patent incorporating a bank, other than a federal credit union.

(2) On the application of five or more persons, a majority of whom are natural persons, made in accordance with this Act, the Minister may, subject to this Part, issue letters patent incorporating a federal credit union.

1905. Section 27 of the Act is amended by striking out “and” at the end of paragraph (g) and by replacing paragraph (h) with the following:

(h) if the bank will be a federal credit union, that it will be organized and carry on business on a cooperative basis in accordance with section 12.1; and

(i) the best interests of the financial system in Canada including, if the bank will be a federal credit union, the best interests of the cooperative financial system in Canada.

1906. Subsection 28(1) of the Act is amended by adding the following after paragraph (a):

(a.1) in the case of a bank that is to be a federal credit union, a statement that it is a federal credit union;

1907. The Act is amended by adding the following after section 31:

31.1 The incorporators of a federal credit union are deemed to be its first members.

1908. Section 33 of the Act is amended by adding the following after subsection (2):

(3) A local cooperative credit society may, if so authorized by the laws of the jurisdiction in which it is incorporated, apply to the Minister for letters patent continuing it as a federal credit union if it proposes to be continued under this Act for the purpose of amalgamating with another federal credit union in compliance with this Act.

1909. Subsections 34(1) and (2) of the Act are replaced by the following:

34. (1) If a body corporate applies for letters patent under section 33, sections 23 to 27 apply in respect of the application, with any modifications that the circumstances require.

(2) If a body corporate applies for letters patent under section 33, the application must be duly authorized by a special resolution.

1910. Subsection 35(1) of the English version of the Act is replaced by the following:

35. (1) On the application of a body corporate under section 33, the Minister may, subject to this Part, issue letters patent continuing the body corporate as a bank under this Act.

1911. The Act is amended by adding the following after section 35:

35.1 (1) On the application of a local cooperative credit society under subsection 33(2), the Minister may, subject to this Part, issue letters patent continuing the local cooperative credit society as a federal credit union only if the Minister is of the opinion that the local cooperative credit society has complied with the regulations respecting notice and disclosure requirements.

(2) On the application of a local cooperative credit society under subsection 33(3), the Minister may, subject to this Part, issue letters patent continuing the local cooperative credit society as a federal credit union only if the Minister is of the opinion that

(a) the local cooperative credit society has complied with the regulations respecting notice and disclosure requirements; and

(b) the federal credit union that results from the amalgamation will satisfy the requirements for incorporation as a federal credit union.

(3) The Governor in Council may make regulations respecting notice and disclosure requirements for the purpose of subsections (1) and (2).

1912. The portion of section 36 of the English version of the Act before paragraph (a) is replaced by the following:

36. On the day set out in the letters patent continuing a body corporate as a bank,

1913. Section 38 of the Act is renumbered as subsection 38(1) and is amended by adding the following:

(2) In addition, if the body corporate is continued as a federal credit union,

(a) in the case of a body corporate with common shares,

(i) its common shares are deemed to be membership shares to which are attached the rights, privileges and restrictions set out in this Act,

(ii) the holders of those common shares are deemed to be the members of the federal credit union, and

(iii) any agreement made before continuance under which the holders of any common shares of the body corporate have agreed to vote those shares in a manner provided in the agreement is of no effect; and

(b) in the case of a body corporate that has members,

(i) the membership shares, however designated, of the body corporate are deemed to be membership shares of the federal credit union to which are attached the rights, privileges and restrictions set out in this Act,

(ii) the members of the body corporate are deemed to be the members of the federal credit union, and

(iii) any agreement made before continuance under which the members of the body corporate have agreed to vote in a manner provided in the agreement is of no effect.

1914. Paragraph 39(2)(a) of the Act is replaced by the following:

(a) with respect to any activity described in paragraph (1)(a), 30 days after the date of issue of the letters patent or

(i) if the activity is conducted under an agreement existing on the date of issue of the letters patent, the expiry of the agreement, or

(ii) if the bank is a federal credit union and an undertaking to cease engaging in the activity has been given under subsection 973.02(1), the cessation date set out in the undertaking in respect of the activity;

1915. The portion of subsection 39.1(1) of the Act before paragraph (a) is replaced by the following:

39.1 (1) A bank that is not a federal credit union may

1916. Section 39.2 of the Act is replaced by the following:

39.2 (1) A federal credit union may

(a) apply, with the approval in writing of the Minister, under the Canada Cooperatives Act for a certificate of continuance, or a certificate of continuance and a certificate of amalgamation, as a cooperative under that Act; or

(b) apply under the Cooperative Credit Associations Act for letters patent continuing the federal credit union as an association under that Act or amalgamating and continuing the federal credit union as an association under that Act.

(2) The approval referred to in paragraph (1)(a) may be given only if the Minister is satisfied that

(a) the federal credit union has published, once a week for four consecutive weeks in the Canada Gazette and in a newspaper in general circulation at or near the place where its head office is situated, a notice of its intention to apply for the approval;

(b) the application has been authorized by a special resolution of the members and, if the federal credit union has issued shares, by a separate special resolution of the shareholders of each class of shares; and

(c) the federal credit union does not hold deposits.

(3) For the purpose of paragraph (2)(b), each share carries the right to vote in respect of the special resolution, whether or not it otherwise carries the right to vote in respect of any other matter.

(4) A federal credit union may not apply to be continued, or to be amalgamated and continued, as the case may be, as a body corporate other than one referred to in subsection (1).

39.3 If a bank applies for a certificate or letters patent referred to in section 39.1 or 39.2 in accordance with that section and the certificate is given or the letters patent are issued, this Act ceases to apply to the bank as of the day on which the certificate or the letters patent take effect.

1917. Section 40 of the Act is amended by striking out “or” at the end of paragraph (d) and by adding the following after paragraph (e):

(f) that includes the phrase “credit union” or “coopérative de crédit”, or any abbreviation, combination or derivative of those phrases, unless it is to be a federal credit union and its name also includes the word “bank”, “banque”, “federal” or “fédérale” in conjunction with those phrases; or

(g) that includes the words “cooperative” or “coopérative”, or any abbreviation, combination or derivative of those words, unless it is to be a federal credit union and its name also includes the word “bank”, “banque”, “federal” or “fédérale” in conjunction with those words.

1918. The Act is amended by adding the following after section 40:

40.1 Despite any other Act, but subject to paragraphs 40(f) and (g), a bank may be incorporated or formed under this Act with the words “credit union” “coopérative de crédit”, “cooperative” or “coopérative”, or any abbreviation, combination or derivative of those words, in its name, but only if it will be a federal credit union.

1919. Subsection 42(4) of the Act is replaced by the following:

(4) If a bank is carrying on business under or identifying itself by a name other than its corporate name, the Superintendent may, by order, direct the bank not to use that other name if the Superintendent is of the opinion that that other name is a name referred to in any of paragraphs 40(a) to (g).

1920. The Act is amended by adding the following after the heading “Organization Meetings” before section 45:

Banks Other Than Federal Credit Unions

1921. The portion of subsection 45(1) of the Act before paragraph (a) is replaced by the following:

45. (1) After letters patent incorporating a bank that is not a federal credit union are issued, a meeting of the directors of the bank must be held at which the directors may, subject to this Part,

1922. Subsection 46(1) of the Act is replaced by the following:

46. (1) If at least five million dollars, or any greater amount that the Minister may specify, has been received by a bank in respect of which letters patent were issued under subsection 22(1) from the issue of its shares, the directors of the bank must without delay call a meeting of the shareholders of the bank.

1923. Section 47 of the French version of the Act is replaced by the following:

1924. The Act is amended by adding the following after section 47:

Federal Credit Unions

Meeting of First Directors

47.01 (1) After letters patent incorporating a federal credit union are issued, a meeting of its first directors must be held at which the first directors may, subject to this Part,

(a) adopt forms of certificates for membership shares, forms of share certificates and forms of corporate records;

(b) admit persons to membership in the federal credit union and issue or authorize the issuance of membership shares;

(c) authorize the issue of shares of the federal credit union;

(d) appoint officers;

(e) appoint, under subsection 314(1), an auditor or auditors to hold office until the first meeting of members;

(f) make banking arrangements; and

(g) deal with any other matters necessary to organize the federal credit union.

(2) A first director may call the meeting referred to in subsection (1) by giving, subject to subsection 181(2), the other directors notice of the time and place of the meeting no fewer than five days before the meeting.

First Meeting of Members

47.02 (1) If at least five million dollars, or any greater amount that the Minister may specify, has been received by a federal credit union in respect of which letters patent were issued under subsection 22(2) from the issue of its membership shares and shares, the directors of the federal credit union must, without delay, call a meeting of the members of the federal credit union.

(2) At the meeting, the members must

(a) make by-laws;

(b) elect directors in accordance with this Act and the federal credit union’s by-laws; and

(c) appoint an auditor or auditors to hold office until the close of the first annual meeting of the federal credit union.

(3) The term of office of the first directors ends at the close of the meeting referred to in subsection (1).

Membership in a Federal Credit Union

Conditions of Membership

47.03 (1) Subject to the provisions of this Act, membership in a federal credit union is governed by its by-laws.

(2) To be a member of a federal credit union, a person must acquire and hold the minimum number of membership shares required under the federal credit union’s by-laws.

(3) Subject to any limitations in the federal credit union’s by-laws, including limitations on the rights members may exercise, a member of a federal credit union who ceases to hold enough membership shares to be a member continues to be a member of the federal credit union for the purposes of this Act.

(4) For greater certainty, subsection (3) does not prevent holding fewer than the minimum number of membership shares from being set out in the federal credit union’s by-laws as a ground for expulsion under subsection 47.06(1) or section 47.09.

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

(2) Subject to subsection (1), a person becomes a member of a federal credit union when the person’s application for membership is approved by the directors or an employee authorized by the federal credit union and the applicant has complied fully with the federal credit union’s by-laws governing admission of members.

Withdrawal and Termination

47.05 (1) A member of a federal credit union may withdraw from the federal credit union at any time by giving notice in accord-ance with the by-laws.

(2) A deceased member is deemed to have given notice to the federal credit union of their intention to withdraw on the day of their death.

(3) The by-laws of a federal credit union must set out the rights of a withdrawing member.

47.06 (1) A member of a federal credit union may be expelled from membership, in accordance with the by-laws, by a resolution of the directors on the grounds set out in the by-laws.

(2) The by-laws of a federal credit union must set out the rights of members who are expelled under subsection (1), and those rights must include

(a) the right of a member to receive advance notice of any meeting of the directors at which the board will consider a resolution to expel the member;

(b) the right of a member not to be expelled without being given an opportunity to make representations on the matter at the meeting of the directors;

(c) the right of an expelled member to appeal the decision of the directors at the next meeting of the members; and

(d) the right of the expelled member to be reinstated as a member of the federal credit union if, at the next meeting of the members, the members, by ordinary resolution, set aside the directors’ resolution.

(3) The by-laws of a federal credit union must set out

(a) the procedures to be followed by the directors to provide the advance notice referred to in paragraph (2)(a); and

(b) the procedures to be followed relating to the appeal referred to in paragraph (2)(c).

(4) If the directors pass a resolution expelling a member under subsection (1), the federal credit union must, within five days after the passing of the resolution, notify the member of the directors’ decision by registered letter addressed to the member at the member’s recorded address.

47.07 No by-law may provide for the expulsion of a member by reason only of inactivity of the member in relation to the business or affairs of the federal credit union.

47.08 No by-law governing the withdrawal of a member from membership or the termination of the membership of a member may authorize a redemption of membership shares in contravention of section 485.

47.09 Unless the by-laws provide otherwise, the membership of a member may be terminated by a special resolution of the members. Section 47.06 applies, with any modifications that the circumstances require, to a termination by the members.

47.1 Despite subsection 47.06(1), a federal credit union may, by written notice to a member, terminate the membership if the member is a body corporate and winding-up proceedings have commenced with respect to it.

General Provisions — Federal Credit Unions

47.11 An entity must not become a member of a federal credit union if, as a result of becoming a member, the majority of the members of the federal credit union would not be natural persons.

47.12 A federal credit union must provide its services primarily to its members.

47.13 Each member of a federal credit union has only one vote on all matters to be decided by the members.

47.14 Subject to the by-laws, a person less than 18 years of age may be admitted to membership in a federal credit union and may vote at meetings of the federal credit union.

47.15 No transfer of a membership is valid for any purpose.

47.16 (1) A person whose membership has been terminated under section 47.06 may be reinstated as a member of the federal credit union only by ordinary resolution of the members.

(2) A person whose membership has been terminated under section 47.09 may be reinstated as a member of the federal credit union only by special resolution of the members.

47.17 No transfer of membership shares in a federal credit union is valid unless the transfer is approved by resolution of the directors.

47.18 (1) A federal credit union must ensure that at all times it has at least five members.

(2) If the membership of a federal credit union is reduced to fewer than five members, the federal credit union must, without delay, take the steps that are necessary to

(a) make an application referred to in subsection 39.2(1) or section 216.08; or

(b) liquidate and dissolve the federal credit union under Part VI.

47.19 The Minister may, subject to any terms and conditions that the Minister considers appropriate, exempt any entity or federal credit union from the application of sections 47.11, 47.12 and 47.18.

1925. (1) The portion of section 50 of the Act before paragraph (a) is replaced by the following:

50. Until an order approving the commencement and carrying on of business is made for a bank, the bank must not make any payment on account of incorporation or organization expenses out of moneys received from the issue of the shares or the membership shares of the bank and interest on those moneys, except reasonable sums

(2) Paragraph 50(b) of the Act is replaced by the following:

(b) for the payment of costs related to the issue of shares, or membership shares, of the bank; and

1926. Paragraphs 52(1)(a) and (b) of the Act are replaced by the following:

(a) the meeting of shareholders of the bank referred to in subsection 46(1), or, in the case of a federal credit union, the meeting of members referred to in subsection 47.02(1), has been duly held;

(b) the bank has paid-in capital of at least five million dollars or any greater amount that is specified by the Minister under subsection 46(1) or 47.02(1);

1927. Section 53 of the Act is renumbered as subsection 53(1) and is amended by adding the following:

(2) An order approving the commencement and carrying on of business by a federal credit union is deemed to contain a condition that the federal credit union must, on an ongoing basis, be organized and carry on business on a cooperative basis in accordance with section 12.1.

1928. Paragraph 54(1)(b) of the Act is replaced by the following:

(b) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject, other than the condition deemed to be in the order by subsection 53(2),

1929. Subsections 58(2) to (5) of the Act are replaced by the following:

(2) If the amount allowed by a special resolution for the payment of any incorporation and organization expenses referred to in subsection (1) is considered insufficient by the directors or if no special resolution for the payment of such expenses is passed, the directors may apply to any court having jurisdiction in the place where the head office of the bank is situated to settle and determine the amounts to be paid out of any moneys of the bank before distribution of the balance to

(a) if the bank is not a federal credit union, the shareholders or, if there are no shareholders, to the incorporators; or

(b) if the bank is a federal credit union, its members.

(3) The directors must, at least 21 days before the date fixed for the hearing of the application referred to in subsection (2), send to the shareholders, incorporators or members, as the case may be, a notice of the application, containing a statement of the amounts that are proposed to be settled and determined by the court.

(4) In order that the amounts paid and payable under this section may be equitably borne by the shareholders, incorporators or members, as the case may be, the directors must, after the amounts of the payments have been approved by special resolution or settled and determined by a court, fix the proportionate part of the amounts chargeable to each shareholder, incorporator or member as the ratio of the amount paid in by that person to the aggregate of all the amounts paid in by the shareholders, incorporators or members.

(5) After the amounts referred to in this section have been paid, the directors shall pay, with any interest earned, to the shareholders, incorporators or members, the respective balances of the moneys paid in by them, less the amount chargeable to each under subsection (4).

1930. The portion of subsection 60(1) of the Act before paragraph (a) is replaced by the following:

60. (1) A bank that is not a federal credit union must have one class of shares, to be designated as “common shares”, which are non-redeemable and in which the rights of the holders of those common shares are equal in all respects, and those rights include

1931. The Act is amended by adding the following after section 60:

60.1 (1) A federal credit union may issue shares only if its by-laws set out the following:

(a) whether the shares may be issued to persons who are not members;

(b) the maximum number, if any, of shares of any class that the federal credit union is authorized to issue;

(c) the number of classes of shares; and

(d) the rights, privileges, restrictions and conditions attaching to the shares of each class.

(2) Subject to this Act, a federal credit union must not issue any share that confers on the holder of the share the right

(a) to vote at meetings of the federal credit union otherwise than in accordance with this Act; or

(b) to receive any of the remaining property of the federal credit union on dissolution.

(3) A federal credit union’s by-laws may provide that

(a) a share confers on its holder the right to vote at an election of directors by reason of an event that has occurred and is continuing or by reason of a condition that has been fulfilled; or

(b) the shareholders, any class of shareholders or the holders of a series of shares, may elect a fixed number or a percentage of the directors.

(4) Despite subsections (2) and (3), the shareholders do not have the right to elect more than 20 per cent of the directors.

(5) If shareholders are entitled to vote in accordance with subsection (3) or otherwise in accordance with this Act, each share entitles the holder to one vote.

60.2 A federal credit union must not designate a class of its shares as “membership shares” or any variation of those words.

1932. The portion of subsection 61(1) of the Act before paragraph (a) is replaced by the following:

61. (1) The by-laws of a bank that is not a federal credit union may provide for more than one class of shares and, if they so provide, they must set out

1933. Section 62 of the Act is amended by adding the following after subsection (1):

(1.1) In the case of a federal credit union, a by-law referred to in subsection (1) must be made by special resolution of the members. If the federal credit union has issued shares, the by-law is not effective until it is confirmed by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the by-law.

1934. (1) Subsection 66(2) of the Act is replaced by the following:

(1.1) A federal credit union must also maintain a stated capital account for the membership shares it issues.

(2) A bank must record in the appropriate stated capital account the full amount of any consideration it receives for any shares or membership shares it issues.

(2) Subsection 66(4) of the Act is replaced by the following:

(3.1) Despite subsection (2), a federal credit union may, subject to subsection (4), record in the stated capital account maintained for its membership shares any part of the consideration it receives in an exchange if it issues membership shares

(a) in exchange for

(i) property of a person who immediately before the exchange did not deal with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act,

(ii) shares of or another interest in a body corporate that immediately before the exchange or because of it did not deal with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act, or

(iii) property of a person who immediately before the exchange dealt with the federal credit union at arm’s length within the meaning of that expression in the Income Tax Act if the person, the federal credit union and all of the holders of the membership shares so issued consent to the exchange;

(b) under an agreement referred to in subsection 224(1); or

(c) to shareholders of an amalgamating body corporate who receive the membership shares in addition to or instead of securities of the amalgamated bank.

(4) On the issuance of a share or membership share, a bank must not add to the appropriate stated capital account an amount greater than the amount of the consideration it receives for the share or membership share.

(3) Section 66 of the Act is amended by adding the following after subsection (5):

(6) If the bank referred to in subsection (5) is a federal credit union, the addition must be approved by special resolution of the members and by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the special resolution, unless all the issued and outstanding shares are of not more than two classes of convertible shares referred to in subsection 77(4).

1935. (1) Subsection 67(1) of the Act is replaced by the following:

67. (1) If a body corporate is continued as a bank under this Act, the bank must record in the stated capital account maintained for each class and series of shares, or for other ownership interests, however designated, then outstanding an amount that is equal to the aggregate of

(a) the aggregate amount paid up on the shares of each class and series of shares, or on the other ownership interests, immediately before the body corporate was so continued, and

(b) the amount of the contributed surplus of the bank that is attributable to those shares or other ownership interests.

(2) Subsection 67(3) of the Act is replaced by the following:

(3) Any amount unpaid in respect of a share or other ownership interest, however designated, in the body corporate, that was issued by a body corporate before it was continued as a bank under this Act and paid after it was so continued must be recorded in the stated capital account maintained by the bank for the shares of that class or series or for membership shares.

1936. Section 70 of the Act is amended by striking out “or” at the end of paragraph (c) and by adding the following after that paragraph:

(c.1) if the bank is a federal credit union, permit any of its subsidiaries to hold any membership shares of the federal credit union, other than the minimum number of membership shares required by the by-laws of the federal credit union to qualify for membership in it, if any; or

1937. Section 71 of the Act is replaced by the following:

71. (1) Subject to subsection (2) and to its by-laws, a bank may, with the consent of the Superintendent, purchase, for the purpose of cancellation, any shares or membership shares issued by it, or redeem any redeemable shares or membership shares issued by it at prices not exceeding the redemption price for the shares or membership shares calculated according to a formula stated in its by-laws or the conditions attaching to the shares or membership shares.

(2) A bank must not make any payment to purchase or redeem any shares or membership shares issued by it if there are reasonable grounds for believing that the bank is, or the payment would cause the bank to be, in contravention of any regulation referred to in subsection 485(1) or (2) or any direction made under subsection 485(3).

(3) A bank may accept from any shareholder or member a share or membership share, as the case may be, of the bank surrendered to it as a gift, but may not extinguish or reduce a liability in respect of an amount unpaid on any such share or membership share except in accordance with section 75.

1938. Subsection 72(1) of the Act is replaced by the following:

72. (1) A bank may, and may permit its subsidiaries to, hold, in the capacity of a personal representative, shares of the bank — or, if the bank is a federal credit union, membership shares of the federal credit union — or of any body corporate that controls the bank or ownership interests in any unincorporated entity that controls the bank, but only if the bank or the subsidiary does not have a beneficial interest in the shares, membership shares or ownership interests.

1939. Subsection 73(1) of the Act is replaced by the following:

73. (1) Subject to subsection (2), if a bank purchases shares of the bank or fractions of shares, or membership shares of the bank, or redeems or otherwise acquires shares or membership shares of the bank, the bank must cancel those shares or membership shares.

1940. (1) Subsection 75(1) of the Act is replaced by the following:

75. (1) The stated capital of a bank that is not a federal credit union may be reduced by special resolution.

(1.1) The stated capital of a federal credit union may be reduced by special resolution of its members and, if it has issued shares, by a separate special resolution of the shareholders, the class of shareholders or the holders of the series of shares that is affected by the special resolution.

(2) Paragraph 75(4.1)(b) of the Act is replaced by the following:

(b) there is to be no return of capital to shareholders or members, as the case may be, as a result of the reduction.

(2) Paragraphs 75(6)(a) and (b) of the Act are replaced by the following:

(a) the number of the bank’s shares or membership shares, as the case may be, issued and outstanding,

(b) the results of the voting,

1941. Subsections 76(1) and (2) of the Act are replaced by the following:

76. (1) If any money or property was paid or distributed to a shareholder, member or other person as a consequence of a reduction of capital made contrary to section 75, a creditor of the bank may apply to a court for an order compelling the shareholder, member or other person to pay the money or deliver the property to the bank.

(2) No person holding shares or membership shares in the capacity of a personal representative and registered on the records of the bank as a shareholder or member and described in those records as the personal representative of a named person is personally liable under subsection (1), but the named person is subject to all the liabilities imposed by that subsection.

1942. (1) Subsection 77(1) of the Act is replaced by the following:

77. (1) On a purchase, redemption or other acquisition by a bank of shares or fractions of shares, or of membership shares, issued by it, other than shares or membership shares acquired under section 72 or acquired through the realization of security and sold under subsection 73(2), the bank must deduct from the stated capital account maintained for the class or series of shares, or for the membership shares, as the case may be, so purchased, redeemed or otherwise acquired an amount equal to the result obtained by multiplying the stated capital in respect of the shares of that class or series, or in respect of the membership shares, as the case may be, by the number of shares of that class or series, or the number of membership shares, as the case may be, so purchased, redeemed or otherwise acquired and dividing by the number of shares of that class or series, or the number of membership shares, as the case may be, outstanding immediately before the purchase, redemption or other acquisition.

(2) Subsection 77(5) of the Act is replaced by the following:

(5) Shares issued by a bank and converted into shares of another class or series, or changed under subsection 192.03(1) or 217(1) into shares of another class or series, become issued shares of the class or series of shares into which the shares have been converted or changed.

1943. Section 78 of the Act is replaced by the following:

78. On a conversion of any debt obligation of a bank into shares of a class or series of shares, or into membership shares, the bank must

(a) deduct from the liabilities of the bank the nominal value of the debt obligation being converted; and

(b) record the result obtained under paragraph (a) and any additional consideration received for the conversion in the stated capital account maintained or to be maintained for the class or series of shares, or for the membership shares, as the case may be, into which the debt obligation has been converted.

1944. (1) Subsection 79(1) of the Act is replaced by the following:

79. (1) The directors of a bank may declare and a bank may pay a dividend or patronage allocation by issuing fully paid shares or, subject to subsection 79.2(1), membership shares of the bank or options or rights to acquire fully paid shares or membership shares of the bank and, subject to subsection (4), the directors of a bank may declare and a bank may pay a dividend or patronage allocation in money or property, and if a dividend or patronage allocation is to be paid in money, the dividend may be paid in a currency other than the currency of Canada.

(2) Subsections 79(3) and (4) of the Act are replaced by the following:

(3) If shares or membership shares of a bank are issued in payment of a dividend or patronage allocation, the bank must record in the stated capital account maintained or to be maintained for the shares of the class or series, or for the membership shares, issued in payment of the dividend or patronage allocation the declared amount of the dividend or patronage allocation stated as an amount of money.

(4) The directors of a bank must not declare and a bank must not pay a dividend or patronage allocation if there are reasonable grounds for believing that the bank is, or the payment would cause the bank to be, in contravention of any regulation referred to in subsection 485(1) or (2) or any direction made under subsection 485(3).

1945. The Act is amended by adding the following after section 79:

Membership Capital

79.1 (1) A federal credit union may have only one class of membership shares in which the rights of their holders are equal in all respects, and those rights include the right to receive

(a) dividends declared on those membership shares; and

(b) the remaining property of the federal credit union on dissolution.

(2) No membership share of a federal credit union is to be issued until it is fully paid for in money or, with the approval of the Superintendent, in property.

(3) When issuing membership shares, a federal credit union may provide that any aspect of the membership shares relating to money or involving the payment of or the liability to pay money be in a currency other than the currency of Canada.

79.2 (1) Membership shares may be held only by members.

(2) The right to vote attaches to membership and not to a membership share.

(3) A federal credit union’s letters patent or by-laws may not include any preference, right, condition, restriction, limitation or prohibition on membership shares, except as provided for by this Act.

79.3 (1) The by-laws of a federal credit union may provide that no membership share certificates need be issued and, if they so provide, the federal credit union must, on the request of a member, issue a statement of the number of membership shares held by the member.

(2) The face of each certificate that the federal credit union issues in respect of membership shares must contain

(a) the name of the federal credit union;

(b) a statement that the federal credit union is subject to this Act;

(c) the name of the person to whom it is issued;

(d) a statement that the certificate represents membership shares in the federal credit union, and the number of the membership shares represented by the certificate;

(e) a statement that the certificate is transferable only in accordance with this Act; and

(f) a statement that there is a charge on the membership shares represented by the certificate in favour of the federal credit union for any indebtedness of the member to the federal credit union.

79.4 The membership shares of a federal credit union must be issued with no par value, and its by-laws must specify any limit on the number of membership shares and set out the formula to be used to determine the value of the membership shares.

79.5 Membership shares issued by a federal credit union are non-assessable, and their holders are not liable to the federal credit union or to its creditors in respect of those membership shares.

79.6 A body corporate that is continued as a federal credit union under this Act and that is not in compliance with section 79.1 on the date letters patent continuing it as a federal credit union are issued must, within 12 months after that date, redesignate a class of its shares to comply with that section.

1946. The portion of the definition “se- curity” or “security certificate” in section 81 of the Act after paragraph (d) is replaced by the following:

but does not include an instrument evidencing a deposit or, in the case of a federal credit union, a membership share;

1947. The heading “Shareholders” before section 136 of the Act is replaced by the following:

Shareholders and Members

1948. Subsections 136(1) and (2) of the Act are replaced by the following:

136. (1) Meetings of shareholders or members of a bank are to be held at the place within Canada provided for in the by-laws of the bank or, in the absence of any such provision, at the place within Canada that the directors determine.

(2) Unless the by-laws provide otherwise, any person who is entitled to attend a meeting of shareholders or members may participate in the meeting by means of a telephonic, electronic or other communication facility that permits all participants to communicate adequately with each other during the meeting if the bank makes one available. A person who is participating in a meeting by one of those means is deemed for the purposes of this Act to be present at the meeting.

1949. (1) Subsection 137(1) of the English version of the Act is replaced by the following:

137. (1) The directors of a bank

(a) must, after the meeting called under subsection 46(1) or section 47.02, call the first annual meeting of shareholders or members, as the case may be, of the bank, which meeting must be held not later than six months after the end of the first financial year of the bank, and subsequently call an annual meeting of shareholders or members, as the case may be, which meeting must be held not later than six months after the end of each financial year; and

(b) may at any time call a special meeting of shareholders or members.

(2) Subsections 137(5) and (6) of the Act are replaced by the following:

(5) The directors may in advance fix a record date, that is within the prescribed period, for the determination of shareholders or members for any purpose, including for a determination of which shareholders or members are entitled to

(a) receive payment of a dividend or a patronage allocation;

(b) participate in a liquidation distribution;

(c) receive notice of a meeting of shareholders or members; or

(d) vote at a meeting of shareholders or members.

(6) If no record date is fixed,

(a) the record date for the determination of shareholders or members who are entitled to receive notice of a meeting is

(i) at the close of business on the day immediately preceding the day on which the notice is given, or

(ii) if no notice is given, the day on which the meeting is held; and

(b) the record date for the determination of shareholders or members for any other purpose, other than to establish a right to vote, is at the close of business on the day on which the directors pass a resolution in respect of that purpose.

1950. (1) The portion of subsection 138(1) of the English version of the Act before paragraph (a) is replaced by the following:

138. (1) Notice of the time and place of a meeting of shareholders or members of a bank must be sent within the prescribed period to

(2) Paragraph 138(1)(a) of the Act is replaced by the following:

(a) each shareholder or member entitled to vote at the meeting;

(3) Subsections 138(1.01) and (1.1) of the Act are replaced by the following:

(1.01) In the case of a bank that is not a federal credit union and that is not a distributing bank, notice may be sent within any shorter period specified in its by-laws.

(1.1) A bank with equity of eight billion dollars or more that is not a federal credit union must set out in the notice of a meeting the number of eligible votes, as defined under subsection 156.09(1), that may be cast at the meeting as of the record date for determining shareholders entitled to receive the notice of meeting or, if there are to be separate votes of shareholders at the meeting, the number of eligible votes, as defined in that subsection, in respect of each separate vote to be held at the meeting.

1951. Section 139 of the Act is replaced by the following:

139. (1) A notice of a meeting is not required to be sent to shareholders or members who are not registered on the records of the bank or the bank’s transfer agent on the record date fixed under paragraph 137(5)(c) or determined under paragraph 137(6)(a).

(2) Failure to receive a notice of a meeting does not deprive a shareholder or member of the right to vote at the meeting.

1952. Section 140 of the English version of the Act is replaced by the following:

140. (1) If a meeting is adjourned for less than 30 days, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting, other than by announcement at the earliest meeting that is adjourned.

(2) If a meeting is adjourned by one or more adjournments for a total of 30 days or more, notice of the continuation of the meeting must be given as for an original meeting but, unless the meeting is adjourned by one or more adjournments for a total of more than 90 days, subsection 156.04(1) does not apply.

1953. (1) Subsection 141(1) of the English version of the Act is replaced by the following:

141. (1) All matters dealt with at a special meeting of shareholders or members and all matters dealt with at an annual meeting, except consideration of the financial statements, report of the auditor or auditors, election of directors, remuneration of directors and reappointment of the incumbent auditor or auditors, are deemed to be special business.

(2) Subsection 141(2) of the Act is replaced by the following:

(2) Notice of a meeting of shareholders or members at which special business is to be transacted must

(a) state the nature of the special business in sufficient detail to permit a shareholder or member to form a reasoned judgment in respect of that special business; and

(b) contain the text of any special resolution to be submitted to the meeting.

1954. The Act is amended by adding the following after section 141:

141.1 (1) If shareholders of a federal credit union are entitled to elect one or more directors,

(a) a nomination for the election of a director may be made only by one or more registered holders or beneficial owners of shares representing in the aggregate not less than 5 per cent of the shares of the federal credit union or 5 per cent of the shares of a class of its shares entitled to vote at the meeting at which the election is to take place; and

(b) a notice of a meeting of shareholders must include any nomination made in accordance with paragraph (a) for the election of a director.

(2) Paragraph (1)(b) does not apply if the nomination is submitted to the federal credit union at least the prescribed number of days before the anniversary date of the previous annual meeting.

1955. (1) Subsection 142(1) of the Act is replaced by the following:

142. (1) A shareholder, a member and any other person entitled to attend a meeting may in any manner waive notice of the meeting.

(2) Subsection 142(2) of the English version of the Act is replaced by the following:

(2) Attendance at a meeting of shareholders or members is a waiver of notice of the meeting, except when a person attends the meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting is not lawfully called.

1956. The portion of subsection 143(1) of the Act before paragraph (a) is replaced by the following:

143. (1) Subject to subsections (1.1) and (1.2), a registered holder or beneficial owner of shares of a bank that is not a federal credit union that may be voted at an annual meeting of shareholders may

1957. The Act is amended by adding the following after section 144:

144.1 (1) Subject to subsections (2) and (3), a member of a federal credit union may

(a) submit to the federal credit union notice of any matter that they propose to raise at an annual meeting (in this section referred to as a “proposal”); and

(b) discuss at an annual meeting any matter in respect of which they would have been entitled to submit a proposal.

(2) To be eligible to submit a proposal a member must have been a member of the federal credit union for at least the prescribed period before making the proposal.

(3) A proposal is to be accompanied by a statement setting out the name and address of the member submitting the proposal and the period of time the member has been a member.

(4) The information provided under subsection (3) does not form part of a proposal or of the supporting statement referred to in subsection (6) and is not included for the purposes of the prescribed maximum number of words referred to in subsection (6).

(5) If the federal credit union requests within the prescribed period that a member provide proof that they are eligible to submit a proposal, the member must within the prescribed period provide proof that they meet the requirement of subsection (2).

(6) A proposal submitted for consideration at a meeting must be attached to the notice of the meeting, together with, if requested by the member making the proposal, a statement in support of the proposal and the name and address of the member making the proposal. The statement and the proposal must together not exceed the prescribed maximum number of words.

(7) A proposal may include nominations for the election of directors if it is signed by the lesser of 250 members and 1 per cent of the members who are entitled to vote at the meeting.

(8) A federal credit union need not comply with subsection (6) if

(a) the proposal is not submitted to the federal credit union at least the prescribed number of days before the anniversary date of the notice of meeting that was sent to members in connection with the previous annual meeting;

(b) it clearly appears that the primary purpose of the proposal is to enforce a personal claim or redress a personal grievance against the federal credit union or its directors, officers, members or security holders;

(c) the person submitting the proposal has failed, within the prescribed period before the federal credit union receives the person’s proposal, to present, at a meeting, a proposal that, at the person’s request, had been attached by the federal credit union to the notice of the meeting;

(d) substantially the same proposal was attached to a notice of meeting, and presented at a meeting, of the federal credit union held not more than the prescribed period before the receipt of the proposal and the proposal did not receive the prescribed minimum amount of support at the meeting; or

(e) the rights conferred by subsection (1) are being abused to secure publicity.

(9) If a member who submits a proposal withdraws from membership in accordance with section 47.05 before the meeting, the federal credit union is not required to attach any proposal submitted by that member to the notice of a meeting held within the prescribed period following the date of the meeting.

(10) No federal credit union or person acting on behalf of a federal credit union incurs any liability by reason only of circulating a proposal.

144.2 (1) If a federal credit union refuses to include a proposal in a notice of a meeting referred to in section 138, it must, within the prescribed period after the day on which it receives the proposal or the day on which it receives the proof of eligibility under subsection 144.1(5), as the case may be, notify in writing the person submitting the proposal of its intention to omit the proposal from the notice and of the reasons for the refusal.

(2) On the application of a person submitting a proposal who claims to be aggrieved by a federal credit union’s refusal under subsection (1), a court may restrain the holding of the meeting at which the proposal is sought to be presented and make any further order it thinks fit.

(3) A federal credit union or any person claiming to be aggrieved by a proposal may apply to a court for an order permitting the federal credit union to omit the proposal from a notice of meeting, and the court, if it is satisfied that subsection 144.1(7) applies, may make any order that it thinks fit.

(4) An applicant under subsection (2) or (3) must give the Superintendent written notice of the application, and the Superintendent may appear and be heard at the hearing of the application in person or by counsel.

1958. (1) Section 145 of the Act is amended by adding the following after subsection (1):

(1.1) A federal credit union must also prepare an alphabetical list of members entitled to receive notice of a meeting

(a) if a record date is fixed under paragraph 137(5)(c), no later than 10 days after that date; or

(b) if no record date is fixed, on the record date determined under paragraph 137(6)(a).

(2) Section 145 of the Act is amended by adding the following after subsection (2):

(2.1) A federal credit union must also prepare an alphabetical list of members entitled to vote as of the record date

(a) if a record date is fixed under paragraph 137(5)(d), no later than 10 days after that date; or

(b) if no record date is fixed under paragraph 137(5)(d), no later than 10 days after a record date is fixed under paragraph 137(5)(c) or no later than the record date determined under paragraph 137(6)(a), as the case may be.

(3) The portion of subsection 145(4) of the Act before paragraph (a) is replaced by the following:

(4) A shareholder of a bank that is not a federal credit union may examine the list of shareholders

(4) Section 145 of the Act is amended by adding the following after subsection (4):

(5) A person who is entitled to vote at a meeting of a federal credit union may examine a list that relates to the meeting

(a) during usual business hours at the head office of the federal credit union or at the place where its members register or central securities register is maintained; and

(b) at the meeting for which the list was prepared.

1959. Subsections 146(2) and (3) of the Act are replaced by the following:

(2) Unless the by-laws otherwise provide, a quorum of members is present at a meeting of members of a federal credit union if at least 500 members who are entitled to vote at the meeting, or one per cent of the total number of members entitled to vote at the meeting, whichever is the lesser, are present in person or represented by a personal representative or delegate.

(3) If a quorum is present at the opening of a meeting of shareholders or members, the shareholders or members present may, unless the by-laws otherwise provide, proceed with the business of the meeting even though a quorum is not present throughout the meeting.

(4) If a quorum is not present at the opening of a meeting of shareholders or members, the shareholders or members present may adjourn the meeting to a fixed time and place but may not transact any other business.

1960. Section 149 of the Act is replaced by the following:

149. (1) If an entity is a shareholder or member of a bank, the bank must recognize any natural person authorized by a resolution of the directors or governing body or similar authority of the entity to represent it at meetings of shareholders or members of the bank.

(2) A natural person authorized under subsection (1) to represent an entity may exercise on behalf of the entity all the powers the entity could exercise if it were a natural person as well as a shareholder or member.

1961. (1) Subsections 151(1) and (2) of the Act are replaced by the following:

151. (1) Unless the by-laws otherwise provide, voting at a meeting of shareholders or members is to take place by show of hands except when a ballot is demanded by a person entitled to vote at the meeting.

(2) A person entitled to vote at a meeting of shareholders or members may demand a ballot either before or after any vote by show of hands.

(2) Subsections 151(4) and (5) of the Act are replaced by the following:

(4) Unless the by-laws provide otherwise, any person who is participating in a meeting under subsection 136(2) and entitled to vote at that meeting may vote by means of the telephonic, electronic or other communication facility that the bank has made available for that purpose.

(5) The by-laws of a federal credit union may, subject to the regulations and any conditions set out in the by-laws, allow members to vote by mail.

(6) The Governor in Council may make regulations

(a) respecting the manner of and conditions for voting at a meeting of members or shareholders by means of a telephonic, electronic or other communication facility; and

(b) respecting the manner and conditions of voting by mail by members of federal credit unions.

1962. (1) The portion of subsection 152(1) of the French version of the Act before paragraph (a) is replaced by the following:

(2) Paragraphs 152(1)(a) and (b) of the English version of the Act are replaced by the following:

(a) a resolution in writing signed by all the persons entitled to vote on that resolution at a meeting of shareholders or members is as valid as if it had been passed at a meeting of the shareholders or members; and

(b) a resolution in writing dealing with all matters required by this Act to be dealt with at a meeting of shareholders or members, and signed by all the persons entitled to vote at that meeting, satisfies all the requirements of this Act relating to meetings of shareholders or members.

(3) Subsection 152(2) of the English version of the Act is replaced by the following:

(2) A copy of every resolution referred to in subsection (1) must be kept with the minutes of the meetings.

1963. (1) Subsection 153(2) of the Act is replaced by the following:

(1.1) At least two members entitled to vote at a meeting of a federal credit union that is sought to be held, or one per cent of the total number of members entitled to vote at a meeting of a federal credit union that is sought to be held, whichever is greater, may requisition the directors to call a meeting of members, or of members and shareholders, for the purposes stated in the requisition.

(2) The requisition

(a) must state the business to be transacted at the meeting and must be sent to each director and to the head office of the bank; and

(b) may consist of several documents of like form, each signed by one or more shareholders or members, as the case may be.

(2) The portion of subsection 153(3) of the English version of the Act before paragraph (c) is replaced by the following:

(3) On receipt of the requisition, the directors must call a meeting of shareholders or members, as the case may be, to transact the business stated in the requisition, unless

(a) a record date has been fixed under paragraph 137(5)(c) and notice of it has been given under subsection 137(7);

(b) the directors have called a meeting of shareholders or members, as the case may be, and have given the notice required by section 138; or

(3) Paragraph 153(3)(c) of the Act is replaced by the following:

(c) the business of the meeting as stated in the requisition includes matters described in paragraphs 143(5)(b) to (e) or 144.1(8)(b) to (e).

(4) Subsection 153(4) of the English version of the Act is replaced by the following:

(4) If the directors do not call a meeting within 21 days after receiving the requisition, any person who signed the requisition may call the meeting.

(5) Subsection 153(6) of the Act is replaced by the following:

(6) Unless the shareholders or members, as the case may be, otherwise resolve at a meeting called under subsection (4), the bank must reimburse the shareholders or members for any expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

1964. (1) The portion of subsection 154(1) of the Act before paragraph (a) is replaced by the following:

154. (1) A court may, on the application of a director of a bank, a person who is entitled to vote at a meeting of shareholders or members of a bank or the Superintendent, order a meeting to be called, held or conducted in the manner that the court directs if

(2) Subsection 154(3) of the English version of the Act is replaced by the following:

(3) A meeting called, held and conducted under this section is for all purposes a meeting of shareholders or members, as the case may be, of the bank duly called, held and conducted.

1965. (1) Subsection 155(1) of the Act is replaced by the following:

155. (1) A bank or any of its shareholders, members or directors may apply to a court to resolve any dispute in respect of the election or appointment of a director or an auditor of the bank.

(2) Subsection 155(2) of the Act is amended by striking out “and” at the end of paragraph (c), by adding “and” at the end of paragraph (d) and by adding the following after paragraph (d):

(e) an order determining the voting rights of members and of persons claiming to be members.

1966. Section 156.09 of the Act is amended by adding the following after subsection (2):

(2.1) Subsection (2) does not apply in respect of a meeting of shareholders or members of a federal credit union.

1967. The Act is amended by adding the following after section 159:

159.1 Not less than two thirds of the directors of a federal credit union, or any greater proportion that is provided for by the by-laws, must be members of the federal credit union or representatives of members of the federal credit union.

1968. Section 160 of the Act is amended by striking out “and” at the end of paragraph (h), by adding “and” at the end of paragraph (i) and by adding the following after paragraph (i):

(j) if the bank is a federal credit union, a person who fails to meet any of the qualification requirements set out in its by-laws.

1969. Paragraphs 162.1(2)(a) and (b) of the Act are replaced by the following:

(a) becomes effective on the day of the next annual meeting of the persons who are entitled to elect directors unless a notice in writing by the Superintendent revoking the determination is received by the bank prior to that day; and

(b) ceases to be in effect on the day of the next annual meeting of those persons after a notice in writing by the Superintendent revoking the determination is received by the bank.

1970. Subsection 163(3) of the Act is replaced by the following:

(3) For the purposes of subsection (1), whether or not a person is affiliated with a bank is to be determined as at the day the notice of the annual meeting is sent under section 138 and that determination becomes effective on the day of that meeting, and a person is deemed to continue to be affiliated or unaffiliated, as the case may be, until the next annual meeting of the shareholders or members, as the case may be.

1971. Section 165 of the Act is replaced by the following:

165. (1) Subject to subsection 159(1) and sections 168 and 217, the directors of a bank that is not a federal credit union must, by by-law, determine the number of directors or the minimum and maximum number of directors, but no by-law that decreases the number of directors shortens the term of an incumbent director.

(2) Subject to subsection 159(1), the members of a federal credit union must, by by-law, determine the number of directors or the minimum and maximum number of directors.

(3) A by-law made under subsection (1) or (2) that provides for a minimum and maximum number of directors may provide that the number of directors to be elected at any annual meeting of the shareholders or members, as the case may be, be the number that is fixed by the directors before the annual meeting.

1972. (1) Subsections 166(2) to (4) of the English version of the Act are replaced by the following:

(2) A director elected for a term of one, two or three years holds office until the close, as the case may be, of the first, second or third annual meeting of shareholders or members, as the case may be, following the election of the director.

(3) A director who is not elected for an expressly stated term of office ceases to hold office at the close of the next annual meeting of shareholders or members, as the case may be, following the election of the director.

(4) It is not necessary that all directors elected at a meeting of shareholders or members hold office for the same term.

(2) Subsection 166(6) of the Act is replaced by the following:

(6) Subject to subsection 163(4), if a director of a bank is elected or appointed for a term of more than one year, the bank must comply with subsections 159(2) and 163(1) and section 164 at each annual meeting of shareholders or members, as the case may be, during the director’s term of office as if that director were elected or appointed on that date.

1973. The Act is amended by adding the following after section 168:

168.1 Despite section 168 or any provision of its by-laws, cumulative voting is not permitted in a federal credit union.

1974. The portion of subsection 170(2) of the Act before paragraph (a) is replaced by the following:

(2) If, at the close of a meeting of shareholders or members of a bank, the shareholders or members have failed to elect the number or minimum number of directors required by this Act or the by-laws of a bank, the purported election of directors at the meeting

1975. (1) The portion of subsection 171(1) of the Act before paragraph (a) is replaced by the following:

171. (1) Despite subsections 166(2) and (3) and paragraphs 168(1)(f) and 172(1)(a), if subsection 170(1) or (2) applies at the close of any meeting of shareholders or members of a bank, the board of directors, until their successors are elected or appointed, consists solely of

(2) Subsections 171(3) and (4) of the Act are replaced by the following:

(3) If subsection (1) or (2) applies, the board of directors referred to in that subsection must, without delay, call a special meeting of shareholders or members, as the case may be, to fill the vacancies if paragraph 170(2)(a) applies, or elect a new board of directors if subsection 170(1) or paragraph 170(2)(b) applies.

(4) If the directors fail to call a special meeting required by subsection (3), the meeting may be called by any person who would be entitled to vote at the meeting.

1976. (1) Subsection 173(1) of the Act is replaced by the following:

173. (1) Subject to paragraph 168(1)(g), the shareholders of a bank that is not a federal credit union may by resolution at a special meeting of shareholders remove any director or all the directors from office.

(1.1) A director of a federal credit union may be removed from office by resolution at a special meeting of the persons who are entitled to vote in the election of that director.

(2) Section 173 of the Act is amended by adding the following after subsection (2):

(2.1) If members of a federal credit union have the exclusive right to elect one or more directors, a director so elected may be removed only by a resolution of the members having that right.

(2) Subsection 173(3) of the English version of the Act is replaced by the following:

(3) Subject to paragraphs 168(1)(b) to (e), a vacancy created by the removal of a director may be filled at the meeting of the shareholders or members, as the case may be, at which the director is removed or, if not so filled, may be filled under section 177 or 178.

1977. (1) Paragraph 174(1)(b) of the English version of the Act is replaced by the following:

(b) receives a notice or otherwise learns of a meeting called for the purpose of removing the director from office, or

(2) Paragraph 174(1)(c) of the Act is replaced by the following:

(c) receives a notice or otherwise learns of a meeting of directors, shareholders or members at which another person is to be appointed or elected to fill the office of director, whether because of the director’s resignation or removal or because the director’s term of office has expired or is about to expire,

1978. Sections 175 and 176 of the Act are replaced by the following:

175. (1) A bank that is not a federal credit union must without delay on receipt of a director’s statement referred to in subsection 174(1) relating to a matter referred to in paragraph 174(1)(b) or (c), or a director’s statement referred to in subsection 174(2), send a copy of it to each shareholder entitled to receive a notice of meetings and to the Superintendent, unless the statement is included in or attached to a management proxy circular required by subsection 156.05(1).

(2) A federal credit union must, without delay on receipt of a director’s statement referred to in subsection 174(1) relating to a matter referred to in paragraph 174(1)(b) or (c), or a director’s statement referred to in subsection 174(2), send a copy of it to the Superintendent, to each member and, if the director was elected by the holders of shares of a class, to those shareholders.

(3) No bank or person acting on its behalf incurs any liability by reason only of circulating a director’s statement in compliance with subsection (1) or (2).

176. (1) The by-laws of a bank that is not a federal credit union may provide that a vacancy among the directors is to be filled only

(a) by a vote of the shareholders; or

(b) by a vote of the holders of any class or series of shares having an exclusive right to elect one or more directors if the vacancy occurs among the directors elected by the holders of that class or series.

(2) The by-laws of a federal credit union may provide that a vacancy among its directors is to be filled by election or appointment by members only or by an election or appointment by persons having an exclusive right to elect or appoint one or more directors if the vacancy occurs among the directors appointed or elected by those persons.

1979. Section 178 of the Act is replaced by the following:

178. Despite section 183, if a class of persons have an exclusive right to elect one or more directors and a vacancy occurs among those directors, then, subject to section 176,

(a) the remaining directors elected by those persons may fill the vacancy except one resulting from an increase in the number or the minimum or maximum number of directors who may be elected by that class from a failure to elect the number or minimum number of directors provided for in the by-laws for that class;

(b) if there are no such remaining directors and, by reason of the vacancy, the number of directors or the composition of the board of directors fails to meet any of the requirements of section 159, subsection 163(1) and section 164, the other directors may fill that vacancy; and

(c) if there are no such remaining directors and paragraph (b) does not apply, any person of that class may call a meeting of the class for the purpose of filling the vacancy.

1980. Subsection 179.1(1) of the Act is replaced by the following:

179.1 (1) The directors of a bank that is not a federal credit union may appoint one or more additional directors if the by-laws of the bank allow them to do so and the by-laws determine the minimum and maximum numbers of directors.

1981. The Act is amended by adding the following after section 183:

183.01 The directors of a federal credit union that has issued shares that provide for the election of directors must not transact business at a meeting of directors or of a committee of directors unless the majority of the directors present at the meeting are members.

1982. Subsection 186(2) of the Act is replaced by the following:

(2) A bank must attach to the notice of each annual meeting it sends to its shareholders or members, as the case may be, a statement showing, in respect of the financial year immediately preceding the meeting, the total number of directors’ meetings and directors’ committee meetings held during the financial year and the number of those meetings attended by each director.

1983. Subsection 188(1) of the Act is replaced by the following:

188. (1) Unless this Act otherwise provides, the directors of a bank that is not a federal credit union may by resolution make, amend or repeal any by-law that regulates the business or affairs of the bank.

1984. Section 189 of the French version of the Act is replaced by the following:

1985. Paragraph 192(1)(b) of the Act is replaced by the following:

(b) immediately prior to the day a body corporate is continued as a bank other than a federal credit union, was provided for in the incorporating instrument of the body corporate,

1986. The Act is amended by adding the following after section 192:

192.01 (1) The by-laws of a federal credit union must provide for

(a) the qualifications of members and the procedures for acceptance of members;

(b) the membership obligations of members, including any obligation to use the services of the federal credit union and any fees to be paid by members;

(c) the rights of joint members, if any;

(d) the fact that a delegate has only one vote even though the delegate is a member or represents more than one member;

(e) the limit, if any, on the number of membership shares;

(f) the selection, qualifications, term of office and removal of directors and members of committees of directors;

(g) the manner of distribution of any surplus earnings arising from the operations of the federal credit union;

(h) the rights of withdrawing members and members who are expelled;

(i) if the federal credit union wishes to permit members or shareholders to attend a meeting of the federal credit union by means of a communication facility referred to in subsection 136(2), the ways in which votes must be held; and

(j) the date on which the federal credit union’s financial year ends.

(2) The by-laws of a federal credit union may provide for any other matter that the members consider necessary or desirable, including

(a) restrictions on the classes of persons to which membership may be available, as long as the restrictions are consistent with applicable laws with respect to human rights;

(b) the representation of members by delegates;

(c) the distribution of patronage allocations;

(d) the manner of distribution of any remaining property on the voluntary liquidation and dissolution of the federal credit union;

(e) a formula for calculating the value of membership shares;

(f) a formula for calculating the redemption price of membership shares; and

(g) voting by mail.

(3) If the by-laws of a federal credit union provide for the representation of members by delegates, the by-laws must set out procedures for their selection and removal.

192.02 (1) Each member and shareholder of a federal credit union may on request, not more than once in each calendar year, receive free of charge one copy of the letters patent and by-laws of the federal credit union, and one copy of any amendments to them.

(2) The federal credit union must provide each creditor, and, if the federal credit union is a distributing federal credit union, any other person, on payment of a reasonable fee, with a copy of the federal credit union’s letters patent and by-laws.

192.03 (1) The members of a federal credit union may, by special resolution, make, amend or repeal any by-law that regulates the business and affairs of the federal credit union, including a by-law changing the federal credit union’s name or the province in which its head office is situated.

(2) Unless the by-laws of a federal credit union provide otherwise, the directors may, by special resolution, make a by-law or amend a by-law of the federal credit union, including a by-law changing the federal credit union’s name or the province in which its head office is situated, but only if the by-law or amendment is not contrary to a by-law made by the members.

(3) The directors must present a by-law or an amendment to a by-law that is made under subsection (2) to the members at the next meeting of members and the members may, by special resolution, confirm or amend it.

(4) If a by-law or an amendment to a by-law made by the directors is not confirmed, with or without amendments, under subsection (3), the by-law or amendment is repealed as of the date of the meeting of members at which it was not confirmed.

(5) If a by-law, or an amendment to or a repeal of a by-law, made under subsection (1) or (2) does any thing referred to in subsection 218(1) in relation to any class or series of shares, the by-law, amendment or repeal is not effective until it is confirmed or confirmed as amended by the holders of shares of that class or series in accordance with section 218.

(6) If a by-law or an amendment to a by-law made under subsection (1) or (2) changes the name of the federal credit union, the by-law or the amendment is not effective until it is approved by the Superintendent.

(7) If the name of a federal credit union or the province in which its head office is situated is changed under subsection (1) or (2), the Superintendent may issue letters patent to amend the federal credit union’s incorporating instrument accordingly.

(8) Letters patent issued under subsection (7) become effective on the day stated in the letters patent.

192.04 A member may, in accordance with section 144.1, make a proposal to make, amend or repeal a by-law.

192.05 (1) A by-law or an amendment to or repeal of a by-law made by the members is effective from the later of the date of the resolution made under subsection 192.03(1) and the date specified in the by-law, amendment or repeal.

(2) A by-law or an amendment to a by-law made by the directors of a federal credit union is effective from the later of the date the by-law is made or amended by the directors and the date specified in the by-law, until it is confirmed, with or without amendment, under subsection 192.03(3) or repealed under subsection 192.03(4) and, if the by-law is confirmed, or confirmed as amended, it is in effect in the form in which it was so confirmed.

(3) If a by-law or an amendment to a by-law made by the directors under subsection 192.03(2) is not submitted by the directors to the next meeting of the members as required under subsection 192.03(3), the by-law or amendment ceases to be effective from the date of that meeting.

(4) If a by-law or an amendment to a by-law made by the directors under subsection 192.03(2) is repealed under subsection 192.03(4) or ceases to be effective under subsection (3), no subsequent resolution of the directors to make or amend a by-law that has substantially the same purpose or effect is effective until it is confirmed, or confirmed as amended, by the members.

192.06 Subject to section 192.05, the by-laws of a body corporate that is continued as a federal credit union under this Act continue in effect until amended or repealed, unless contrary to a provision of this Act.

192.07 If the remuneration of directors of a body corporate that is continued as a federal credit union was, immediately before the issuance of the federal credit union’s letters patent, fixed by a resolution of the directors, that resolution continues to have effect, unless it is contrary to the provisions of this Act, until the first meeting of the federal credit union’s members.

192.08 (1) Any matter provided for in the incorporating instrument of a body corporate that is continued as a federal credit union that, under this Act, is to be provided for in the by-laws of a federal credit union is deemed to be provided for in the by-laws of the federal credit union.

(2) If a by-law of the federal credit union made in accordance with section 192.03 amends or repeals any matter referred to in subsection (1), the by-law prevails.

192.09 No amendment to the letters patent or by-laws of a federal credit union affects an existing cause of action or claim or liability to prosecution in favour of or against the federal credit union or its directors or officers, or any civil, criminal or administrative action or proceeding to which the federal credit union or any of its directors or officers are a party.

192.1 Subject to this Act, every by-law of a federal credit union binds the federal credit union and its members to the same extent as if

(a) each member had duly approved the by-law; and

(b) there were in the by-law a covenant under seal on the part of each member, and the successors and assigns of the member, to conform to the by-law.

1987. The portion of section 198 of the Act before paragraph (a) is replaced by the following:

198. The directors of a bank that is not a federal credit union may not delegate the power to

1988. The Act is amended by adding the following after section 198:

198.1 The directors of a federal credit union may not delegate the power to

(a) submit to the members or shareholders a question or matter requiring their approval;

(b) admit members, except in accordance with any authorization made by the members;

(c) fill a vacancy among the directors, on a committee of directors or in the office of auditor;

(d) issue or cause to be issued securities, including an issue of shares of a series that is authorized in accordance with section 62, except in accordance with any authorization made by the directors;

(e) declare a dividend on membership shares or shares or allocate an amount as a patronage allocation;

(f) authorize the redemption or other acquisition by the federal credit union under section 71 of membership shares, or shares, issued by the federal credit union;

(g) authorize the payment of a commission on a share issue;

(h) approve a management proxy circular;

(i) except as provided in this Act, approve the annual statement of the federal credit union and any other financial statements it issued;

(j) expel members; or

(k) adopt or amend by-laws.

1989. Section 201 of the Act is replaced by the following:

201. A director of a bank is entitled to attend and to be heard at every meeting of shareholders or members.

1990. Subsection 202(4) of the Act is replaced by the following:

(4) If the material contract or material transaction, whether entered into or proposed, is one that in the ordinary course of the bank’s business would not require approval by the directors, shareholders or members, as the case may be, the director or officer must disclose to the bank, in writing or by requesting to have it entered in the minutes of a meeting of directors or of a committee of directors, the nature and extent of their interest immediately after they become aware of the contract or transaction.

1991. Subsection 204(2) of the Act is replaced by the following:

(2) The shareholders and members of the bank may examine the portions of any minutes of meetings of directors or committees of directors that contain disclosures under subsection 202(1), or the portions of any other documents that contain those disclosures, during the usual business hours of the bank.

1992. Sections 205 to 207 of the Act are replaced by the following:

205. (1) A contract or transaction for which disclosure is required under subsection 202(1) is not invalid and a director or officer is not accountable to the bank or its shareholders or members for any profit realized from it by reason only of the director’s or officer’s interest in the contract or transaction or the fact that the director was present or was counted to determine whether a quorum existed at the meeting of directors, or of a committee of directors, that considered it if

(a) the director or officer disclosed their interest in accordance with section 202 and subsection 204(1);

(b) the directors approved the contract or transaction; and

(c) the contract or transaction was reasonable and fair to the bank at the time that it was approved.

(2) Even if the conditions set out in subsection (1) are not met, a director or officer acting honestly and in good faith is not accountable to the bank or its shareholders or members for any profit realized from a contract or transaction for which disclosure was required and the contract or transaction is not invalid by reason only of the director’s or officer’s interest in it if

(a) the contract or transaction is approved or confirmed by special resolution at

(i) in the case of a bank that is not a federal credit union, a meeting of shareholders, or

(ii) in the case of a federal credit union, at a meeting of its members and, if it has shareholders, at a meeting of its shareholders;

(b) disclosure of the interest was made to the shareholders or, in the case of a federal credit union, to the members and shareholders, if any, in a manner sufficient to indicate its nature before the contract or transaction was approved or confirmed; and

(c) the contract or transaction was reasonable and fair to the bank at the time that it was approved or confirmed.

206. If a director or officer of a bank fails to comply with any of sections 202 to 205, a court, on application of the bank or any of its shareholders or members, may set aside the contract or transaction on any terms that the court thinks fit and may require the director or officer to account to the bank for any profit or gain realized on it.