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Trust and Loan Companies Act (S.C. 1991, c. 45)

Act current to 2022-09-22 and last amended on 2022-06-23. Previous Versions

PART VIIIBusiness and Powers (continued)

General Business (continued)

Borrowing Costs

Definition of cost of borrowing

 For the purposes of this section and sections 435.1 to 442, cost of borrowing means, in respect of a loan made by a company,

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

  • (b) any amount charged in connection with the loan that is payable by the borrower to the company; and

  • (c) any charge prescribed to be included in the cost of borrowing.

For those purposes, however, cost of borrowing does not include any charge prescribed to be excluded from the cost of borrowing.

  • 1991, c. 45, s. 435
  • 1997, c. 15, s. 379
  • 2001, c. 9, s. 543

Marginal note:Rebate of borrowing costs

  •  (1) Where a company makes a loan in respect of which the disclosure requirements of section 436 apply and the loan is not secured by a mortgage on real property and is required to be repaid either on a fixed future date or by instalments, the company shall, if there is a prepayment of the loan, rebate to the borrower a portion of the charges included in the cost of borrowing in respect of the loan.

  • Marginal note:Exception

    (2) The charges to be rebated do not include the interest or discount applicable to the loan.

  • Marginal note:Regulations

    (3) The Governor in Council may make regulations governing the rebate of charges under subsection (1). The rebate shall be made in accordance with those regulations.

  • 1997, c. 15, s. 379

Marginal note:Disclosing borrowing costs

  •  (1) A company shall not make a loan to a natural person that is repayable in Canada unless the cost of borrowing, as calculated and expressed in accordance with section 437, and other prescribed information have been disclosed by the company to the borrower at the prescribed time and place and in the prescribed form and manner.

  • Marginal note:Non-application

    (2) Subsection (1) does not apply in respect of a loan that is of a prescribed class of loans.

  • 1991, c. 45, s. 436
  • 1997, c. 15, s. 379
  • 2012, c. 5, s. 170

Marginal note:Calculating borrowing costs

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

Marginal note:Additional disclosure

  •  (1) Where a company makes a loan in respect of which the disclosure requirements of section 436 are applicable and the loan is required to be repaid either on a fixed future date or by instalments, the company shall disclose to the borrower, in accordance with the regulations,

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

      • (i) any terms and conditions relating to that right, including the particulars of the circumstances in which the borrower may exercise that right, and

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

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

    • (c) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement;

    • (d) particulars of any other rights and obligations of the borrower; and

    • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

  • Marginal note:Disclosure in credit card applications

    (1.1) A company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide prescribed information in any application forms or related documents that it prepares for the issuance of credit, payment or charge cards and provide prescribed information to any person applying to it for a credit, payment or charge card.

  • Marginal note:Disclosure re credit cards

    (2) Where a company issues or has issued a credit, payment or charge card to a natural person, the company shall, in addition to disclosing the costs of borrowing in respect of any loan obtained through the use of the card, disclose to the person, in accordance with the regulations,

    • (a) any charges or penalties described in paragraph (1)(b);

    • (b) particulars of the person’s rights and obligations;

    • (c) any charges for which the person becomes responsible by accepting or using the card;

    • (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing or the loan agreement; and

    • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

  • Marginal note:Additional disclosure re other loans

    (3) Where a company enters into or has entered into an arrangement, including a line of credit, for the making of a loan in respect of which the disclosure requirements of section 436 apply and the loan is not a loan in respect of which subsection (1) or (2) applies, the company shall, in addition to disclosing the costs of borrowing, disclose to the person to whom the loan is made, in accordance with the regulations,

    • (a) any charges or penalties described in paragraph (1)(b);

    • (b) particulars of the person’s rights and obligations;

    • (c) any charges for which the person is responsible under the arrangement;

    • (d) at the prescribed time and place and in the prescribed form and manner, any prescribed changes respecting the cost of borrowing under the arrangement; and

    • (e) any other prescribed information, at the prescribed time and place and in the prescribed form and manner.

  • 1991, c. 45, s. 438
  • 1997, c. 15, s. 380
  • 2012, c. 5, s. 171

Marginal note:Renewal statement

 If a company makes a loan in respect of which the disclosure requirements of section 436 apply and the loan is secured by a mortgage on real property, the company shall disclose to the borrower, at the prescribed time and place and in the prescribed form and manner, any information that is prescribed respecting the renewal of the loan.

  • 1997, c. 15, s. 381
  • 2012, c. 5, s. 172

Marginal note:Disclosure in advertising

 No person shall authorize the publication, issue or appearance of any advertisement in Canada relating to arrangements referred to in subsection 438(3), loans, credit cards, payment cards or charge cards, offered to natural persons by a company, and purporting to disclose prescribed information about the cost of borrowing or about any other matter unless the advertisement discloses prescribed information at the prescribed time and place and in the prescribed form and manner.

  • 1991, c. 45, s. 439
  • 1997, c. 15, s. 381
  • 2012, c. 5, s. 172

Marginal note:Regulations re borrowing costs

 The Governor in Council may make regulations

  • (a) respecting the time and place at which, and the form and manner in which, a company is to disclose to a borrower

    • (i) the cost of borrowing,

    • (ii) any rebate of the cost of borrowing, and

    • (iii) any other information relating to a loan, arrangement, credit card, payment card or charge card referred to in section 438;

  • (b) respecting the contents of any statement disclosing the cost of borrowing and other information required to be disclosed by a company to a borrower;

  • (c) respecting the manner of calculating the cost of borrowing;

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

  • (e) specifying any class of loans that are not to be subject to section 435.1, subsection 436(1) or 438(1) or (3) or section 438.1 or 439 or the regulations or any specified provisions of the regulations;

  • (f) respecting the time and place at which, and the form and manner in which, any rights, obligations, charges or penalties referred to in sections 435.1 to 439 are to be disclosed;

  • (g) prohibiting the imposition of any charge or penalty referred to in section 438 or providing that the charge or penalty, if imposed, will not exceed a prescribed amount;

  • (h) respecting the nature or amount of any charge or penalty referred to in paragraph 438(1)(b), (2)(a) or (3)(a) and the costs of the company that may be included or excluded in the determination of the charge or penalty;

  • (i) respecting the method of calculating the amount of rebate of the cost of borrowing, or the portion of the cost of borrowing referred to in subparagraph 438(1)(a)(ii);

  • (j) respecting advertisements made by a company regarding arrangements referred to in subsection 438(3), loans, credit cards, payment cards or charge cards;

  • (k) respecting the renewal of loans; and

  • (l) respecting such other matters or things as are necessary to carry out the purposes of sections 435.1 to 439.

  • 1991, c. 45, s. 440
  • 1997, c. 15, s. 381
  • 2012, c. 5, s. 173

Complaints

Marginal note:Procedures for dealing with complaints

  •  (1) A company shall

    • (a) establish procedures for dealing with complaints made by persons having requested or received products or services in Canada from the company;

    • (b) designate an officer or employee of the company to be responsible for implementing those procedures; and

    • (c) designate one or more officers or employees of the company to receive and deal with those complaints.

  • Marginal note:Procedures to be filed with Commissioner

    (2) A company shall file with the Commissioner a copy of its procedures established under paragraph (1)(a).

  • Marginal note:How procedures to be made available

    (3) A company shall make its procedures established under paragraph (1)(a) available

    • (a) in the form of a brochure, at its branches where products or services are offered in Canada;

    • (b) on its websites through which products or services are offered in Canada; and

    • (c) in written format to be sent to any person who requests them.

  • Marginal note:Information on contacting Agency

    (4) A company shall also make prescribed information on how to contact the Agency available whenever it makes its procedures established under paragraph (1)(a) available under subsection (3).

  • 1991, c. 45, s. 441
  • 1997, c. 15, s. 382
  • 2001, c. 9, s. 545
  • 2007, c. 6, s. 364

Marginal note:Obligation to be member of complaints body

 In any province, if there is no law of the province that makes a company subject to the jurisdiction of an organization that deals with complaints made by persons having requested or received products or services in the province from a company, the company shall be a member of an organization that is not controlled by it and that deals with those complaints that have not been resolved to the satisfaction of the persons under procedures established by companies under paragraph 441(1)(a).

  • 2001, c. 9, s. 546

Marginal note:Information on contacting Agency

  •  (1) A company shall, in accordance with the regulations, at the prescribed time and place and in the prescribed form and manner, provide a person requesting or receiving a product or service from it with prescribed information on how to contact the Agency if the person has a complaint about a deposit account, an arrangement referred to in subsection 438(3), a payment, credit or charge card, the disclosure of or manner of calculating the cost of borrowing in respect of a loan or about any other obligation of the company under a consumer provision.

  • Marginal note:Report

    (2) The Commissioner shall prepare a report, to be included in the report referred to in section 34 of the Financial Consumer Agency of Canada Act, respecting

    • (a) procedures for dealing with complaints established by companies pursuant to paragraph 441(1)(a); and

    • (b) the number and nature of complaints that have been brought to the attention of the Agency by persons who have requested or received a product or service from a company.

  • 1991, c. 45, s. 442
  • 1997, c. 15, s. 383
  • 2001, c. 9, s. 547
  • 2012, c. 5, s. 174

Miscellaneous

Marginal note:Charges for prescribed products or services

 A company shall not, directly or indirectly, charge or receive any sum for the provision of any prescribed products or services unless the charge is made by express agreement between it and a customer or by order of a court.

  • 2007, c. 6, s. 365

Marginal note:Prepayment protected

  •  (1) A company shall not make a loan to a natural person that is repayable in Canada, the terms of which prohibit prepayment of the money advanced or any instalment thereon before its due date.

  • Marginal note:Minimum balance

    (2) Except by express agreement between the company and the borrower, the making in Canada of a loan or advance by a company to a borrower shall not be subject to a condition that the borrower maintain a minimum credit balance with the company.

  • Marginal note:Non-application of subsection (1)

    (3) Subsection (1) does not apply in respect of a loan

    • (a) that is secured by a mortgage on real property; or

    • (b) that is made for business purposes and the principal amount of which is more than $100,000 or such other amount as may be prescribed.

  • Marginal note:Government cheques

    (4) A company shall not make a charge

    • (a) for cashing a cheque or other instrument drawn on the Receiver General or on the Receiver General’s account in the Bank of Canada, in a company or in any other deposit-taking Canadian financial institution incorporated by or under an Act of Parliament;

    • (b) for cashing any other instrument issued as authority for the payment of money out of the Consolidated Revenue Fund; or

    • (c) in respect of any cheque or other instrument that is

      • (i) drawn in favour of the Receiver General, the Government of Canada or any department thereof or any public officer acting in the capacity of a public officer, and

      • (ii) tendered for deposit to the credit of the Receiver General.

  • Marginal note:Deposits of Government of Canada

    (5) Nothing in subsection (4) precludes any arrangement between the Government of Canada and a company concerning

    • (a) compensation for services performed by the company for the Government of Canada; or

    • (b) interest to be paid on any or all deposits of the Government of Canada with the company.

  • 1991, c. 45, s. 443
  • 1997, c. 15, s. 384
 
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