Jobs and Economic Growth Act (S.C. 2010, c. 12)
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Assented to 2010-07-12
PART 17FEDERAL CREDIT UNIONS
1991, c. 46Bank Act
1925. (1) The portion of section 50 of the Act before paragraph (a) is replaced by the following:
Marginal note:No payments before order
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
Marginal note:2001, c. 9, s. 56
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:
Marginal note:Deemed condition
(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:
Marginal note:Application to court to settle disbursements
(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.
Marginal note:Notice of application to court
(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.
Marginal note:Ratio payable
(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.
Marginal note:Return of excess
(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:
Marginal note:Common shares
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:
Marginal note:Shares of federal credit union
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.
Marginal note:No automatic rights
(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.
Marginal note:Exception
(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.
Marginal note:Limit on shareholders’ directors
(4) Despite subsections (2) and (3), the shareholders do not have the right to elect more than 20 per cent of the directors.
Marginal note:One share, one vote
(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.
Marginal note:Designation of shares
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:
Marginal note:Classes of shares
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):
Marginal note:Effective date
(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:
Marginal note:Stated capital account — membership shares
(1.1) A federal credit union must also maintain a stated capital account for the membership shares it issues.
Marginal note:Addition to stated capital account
(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.
Marginal note:1997, c. 15, s. 7
(2) Subsection 66(4) of the Act is replaced by the following:
Marginal note:Exception
(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.
Marginal note:Limit on addition to a stated capital account
(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):
Marginal note:Constraint — federal credit union
(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).
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