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The Credit Unions and Caisses Populaires Amendment Act

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S.M. 2010, c. 20

Bill 22, 4th Session, 39th Legislature

The Credit Unions and Caisses Populaires Amendment Act

(Assented to June 17, 2010)

HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:

C.C.S.M. c. C301 amended

1           The Credit Unions and Caisses Populaires Act is amended by this Act.

2(1)        Subsection 1(1) is amended

(a) by replacing the definitions "associate", "central" and "guarantee corporation" with the following:

"associate" means a person who

(a) has rights in a credit union under its by-laws or under this Act, and

(b) is not a member of the credit union; (« associé »)

"central" means Credit Union Central of Manitoba Limited; (« centrale »)

"guarantee corporation" means the Deposit Guarantee Corporation of Manitoba; (« compagnie de garantie »)

(b) in the definition "debt obligation", by striking out "of a body corporate";

(c) in the definition "guarantee fund", by striking out "a guarantee" and substituting "the guarantee";

(d) by adding the following definitions:

"caisse populaire" means a body corporate that provides a comprehensive range of financial services

(a) on a cooperative basis,

(b) in the French language,

(c) primarily for its members, and

(d) under the direction and democratic control of French-speaking individuals who, except as otherwise permitted by this Act, are residents of Manitoba,

but does not include a body corporate that is an extra-provincial caisse populaire; (« caisse populaire »)

"caisse populaire system" means the caisses populaires and the guarantee corporation that guarantees deposits in them; (« système des caisses populaires »)

"credit union" means a body corporate that provides a comprehensive range of financial services

(a) on a cooperative basis,

(b) primarily for its members, and

(c) under the direction and democratic control primarily of residents of Manitoba,

but does not include a body corporate that is an extra-provincial credit union; (« credit union »)

"credit union system" means the credit unions and the guarantee corporation that guarantees deposits in them; (« système des credit unions »)

"other system", in relation to

(a) a credit union, means the caisse populaire system, and

(b) a caisse populaire, means the credit union system; (« autre système »)

(e) by repealing the definitions "CUCM" and "system".

2(2)        The following is added after subsection 1(2):

Exceptions

1(2.1)      Subsection (2) does not apply to the following:

(a) the definitions "caisse populaire", "caisse populaire system", "credit union", "credit union system" and "other system" in subsection (1);

(b) subsections 116(2), 119(1.1) and 124(1.1);

(c) sections 165, 178, 179 and 187;

(d) subsection 188(2);

(e) clause 210(c).

3           Subsection 3(1) is amended

(a) in clause (a), by adding "or continued" after "incorporated";

(b) in clause (c), by striking out "every central continued under this Act" and substituting "any central incorporated or continued under this Act or incorporated under a regulation made under this Act"; and

(c) in clause (d), by striking out "every" and substituting "the".

4(1)        Subsection 10(1) is amended by striking out "a member of the CUCM and assigned to The Credit Union Deposit Guarantee Corporation" and substituting "part of the credit union system".

4(2)        Subsection 10(2) is amended by striking out "a member of the Fédération and assigned to the Société d'assurance-dépôts des caisses populaires" and substituting "part of the caisse populaire system".

4(3)        Clause 10(5)(b) is replaced with the following:

(b) a caisse populaire may carry on business under or identify itself by a name other than its full legal name as long as the other name includes "caisse populaire", "caisse" or "c.p.".

4(4)        Clause 10(8)(c) is replaced with the following:

(c) the central and guarantee corporation.

5           Subsection 18(5) is replaced with the following:

Branch offices

18(5)       Subject to the regulations, a credit union may establish, relocate or close a branch office.

6(1)        The following is added after clause 20(4)(a):

(a.1) state the reason why the applicant seeks to examine or receive a copy of the members or shareholders register;

6(2)        The following is added after subsection 20(4):

Refusing access to register

20(4.1)     A credit union may refuse to allow a person to examine or receive a copy of a register under subsection (2) or (3) if it believes that the person intends to examine the register or use the copy for the purpose of

(a) enforcing a personal claim or redressing a personal grievance against the credit union or its directors, officers, members or other security holders; or

(b) promoting general economic, political, racial, religious, social or similar causes.

Unauthorized access to register prohibited

20(4.2)     No person shall examine a members or shareholders register or obtain a copy of the register, or use the copy or any information in the register,

(a) for a purpose not related to the affairs of the credit union; or

(b) for a reason other than the reason stated as required by clause (4)(a.1).

6(3)        Subsections 20(5) and (6) are replaced with the following:

Offence and penalty

20(5)       A person who contravenes subsection (4.2) is guilty of an offence and is liable on summary conviction

(a) if the person is an individual, to a fine of not more than $10,000 or imprisonment for a term of not more than six months, or both; or

(b) in any other case, to a fine of not more than $25,000.

Examining members register at a meeting

20(6)       A credit union must make the members register available at every meeting of the members, and, subject to clause (4.2)(a), a member may examine the register at the meeting.

7           Clause 32(1)(b) is amended by striking out "surplus" and substituting "earnings".

8           Clauses 42(1.1)(b) and (c) are replaced with the following:

(b) participate in a loan to a member of another credit union; and

(c) acquire part or all of another lender's interest in a loan to another person.

9           Subsection 51(2) is amended by striking out "surplus" and substituting "earnings".

10          Clause 77(2)(b) is amended by striking out ", central or" and substituting "or of the central or".

11          Subsection 88(2) is replaced with the following:

Directors' and officers' liability for loans or advances

88(2)       If a credit union makes a loan or advance to a person in contravention of this Act or the regulations, the person who received the loan or advance, and all directors, other officers and members of committees of the credit union who with knowledge of the contravention made or approved it, are jointly and severally liable to the credit union for the unpaid balance of the loan or advance with interest.

Directors' and officers' liability for loans acquired

88(2.1)     If a credit union acquires part or all of another lender's interest in a loan in contravention of this Act or the regulations, the person liable to repay the loan, and all directors, other officers and members of committees of the credit union who with knowledge of the contravention made or approved the acquisition, are jointly and severally liable to the credit union for the unpaid balance of its interest in the loan, with interest.

12(1)       Subsection 91(1) is amended

(a) in the English version,

(i) in the part before clause (a), by striking out "nature" and substituting "nature,",

(ii) in clause (a), by striking out "full time employee, or" and substituting "full-time employee;",

(iii) in clause (b), by striking out "employee," and substituting "employee;", and

(iv) in clause (c), by striking out "$5,000." and substituting "$5,000"; and

(b) in the French version, by striking out the comma at the end of clauses (a) and (b) and substituting a semi-colon.

12(2)       Clauses 91(2)(a) and (b) of the English version are amended by striking out "or" at the end.

12(3)       Subsection 91(3) of the English version is amended

(a) in clauses (a) and (b), by striking out "$5,000.; or" and substituting "$5,000;"; and

(b) in clauses (c) and (d), by striking out "or" at the end.

12(4)       Clauses 91(5)(a) and (b) of the English version are amended by striking out "or" at the end.

12(5)       Subsection 91(12) is replaced with the following:

Offence of failing to disclose

91(12)      A director or officer who fails to disclose a conflict of interest in accordance with this section is guilty of an offence and is liable on summary conviction to a fine of not more than $5,000 or imprisonment for a term of not more than six months, or both.

Director or officer ceases to hold office on conviction

91(13)      A director or officer who is convicted of an offence under this section

(a) ceases to hold office as of the date of the conviction; and

(b) is not eligible for election as a director or for appointment as an officer of a credit union for five years after that date.

13          Subsection 107(4) is amended

(a) by striking out "without reasonable cause"; and

(b) in the English version, by striking out "$5,000." and substituting "$5,000".

14          Subsection 111(8) is repealed.

15          The following is added after subsection 114(1):

Amending credit union's articles to become a caisse populaire

114(1.1)    Without limiting the generality of subsection (1), a credit union may only become a caisse populaire by amending its articles to that effect.

16          Section 116 is amended by renumbering it as subsection 116(1) and adding the following as subsection 116(2):

Credit union becoming a caisse populaire

116(2)      Despite subsection (1), the Registrar must not issue a certificate of amendment that has the effect of the credit union becoming a caisse populaire unless the Registrar is satisfied that its governance structure and operations comply with subsection 2(2).

17          The following is added after subsection 119(1):

When the amalgamated entity is a caisse populaire

119(1.1)    Despite subsection (1), if the amalgamated entity is to be a caisse populaire, the parties to the amalgamation must satisfy the Registrar that the amalgamation is structured so that the amalgamated entity's governance structure and operations will comply with subsection 2(2) as soon as the amalgamation is finalized.

18          Clause 122(4)(a) of the English version is amended by striking out "$1,000." and substituting "$1,000".

19          The following is added after subsection 124(1):

When the amalgamated entity is a caisse populaire

124(1.1)    Despite subsection (1), when the amalgamated entity is to be a caisse populaire, the Registrar must not issue a certificate of amalgamation unless the Registrar is satisfied that the amalgamation is structured so that the amalgamated entity's governance structure and operations will comply with subsection 2(2) as soon as the amalgamation is finalized.

20          The following is added after section 124:

Application of this section

124.1(1)    This section applies if, by reason of amalgamations or otherwise, only one caisse populaire exists under this Act (referred to in this section as "the caisse populaire").

Amalgamation of caisse populaire and Fédération

124.1(2)    With the approval of the Registrar, the caisse populaire may amalgamate with La Fédération des Caisses Populaires du Manitoba Inc. and continue as a single amalgamated caisse populaire if

(a) the amalgamation is approved by a resolution of the caisse populaire's directors and a resolution of the directors of the Fédération; and

(b) the caisse populaire, the Fédération and the amalgamated caisse populaire comply with any conditions imposed on them under subsection (3).

Conditions by the Registrar

124.1(3)    The Registrar may impose whatever conditions on an amalgamation under this section that the Registrar considers necessary and in the public interest.

Articles of amalgamation

124.1(4)    Without delay after an amalgamation is approved as required by clause (2)(a), the amalgamating entities must send articles of amalgamation to the Registrar in a form approved by the Registrar.

Statutory declarations

124.1(5)    The articles of amalgamation must be accompanied by a statutory declaration of a director or officer of the caisse populaire and of La Fédération des Caisses Populaires du Manitoba Inc.  The statutory declarations must establish to the Registrar's satisfaction that there are reasonable grounds to believe

(a) that each of the caisse populaire and the Fédération is, and the amalgamated caisse populaire will be, able to pay its liabilities as they become due;

(b) that the realizable value of the amalgamated caisse populaire's assets will not be less than the total of its liabilities and capital account of all classes of its shares other than common shares; and

(c) that no creditor or shareholder of the caisse populaire or of the Fédération who is not one of its members will be prejudiced by the amalgamation.

Certificate of amalgamation

124.1(6)    After receiving articles of amalgamation under this section and the statutory declarations required by subsection (5), the Registrar may issue a certificate of amalgamation to the amalgamated caisse populaire if the Registrar is satisfied

(a) that the articles are in accordance with section 6;

(b) that the caisse populaire and the Fédération have complied with any conditions that the Registrar has imposed under this section; and

(c) that the facts that subsection (5) requires to be established have been established by the statutory declarations.

Additional information

124.1(7)    The Registrar may request any additional information that the Registrar considers necessary to be satisfied that the requirements set out in subsection (6) have been met.

Effect of certificate of amalgamation

124.1(8)    On the effective date shown in the certificate of amalgamation,

(a) the amalgamation of the caisse populaire and the Fédération and their continuance as a single caisse populaire becomes effective;

(b) the property of the caisse populaire and the Fédération continues to be the property of the amalgamated caisse populaire;

(c) the amalgamated caisse populaire continues to be liable for the obligations of each amalgamating entity;

(d) any existing cause of action, claim or liability to prosecution is not affected;

(e) a civil, criminal or administrative action or proceeding pending by or against either of the amalgamating entities may be continued by or against the amalgamated caisse populaire; and

(f) the powers and duties of the Fédération as a central under this Act and the regulations are terminated.

Repeal

124.1(9)    This section is repealed on a day to be fixed by proclamation.

21(1)       Subsection 127(1) is amended

(a) by adding the following after clause (a):

(a.1) become a part of the other system;

(b) by striking out "or" at the end of clause (c), adding "or" at the end of clause (d) and adding the following after clause (d):

(e) continue under another Act or in a jurisdiction other than Manitoba.

21(2)       The following is added after subsection 127(3):

Application of subsections (3.2) and (3.3)

127(3.1)    Subsections (3.2) and (3.3) apply if the members adopt a resolution referred to in clause (1)(b), (c) or (e) or a resolution to amend the articles to do anything referred to in subsection 35(2).

Notice to non-member shareholders

127(3.2)    Within 10 days after the members adopt a resolution referred to in subsection (3.1), the credit union must send to each shareholder who is not a member a notice that

(a) includes or is accompanied by a copy or summary of the resolution; and

(b) states that the resolution has been adopted and the shareholder has a right to dissent in accordance with subsection (3.4).

Registrar may require notice to be sent

127(3.3)    If the credit union does not send the notice as required by subsection (3.2), the Registrar may order the credit union to send the notice if the Registrar believes that the credit union's members have adopted a resolution referred to in subsection (3.1).

Shareholder's right to dissent

127(3.4)    A shareholder who is not a member may dissent by sending the Registrar a written objection to the resolution within 15 days after the credit union sends the shareholder the notice required by subsection (3.2) or (3.3).  A shareholder who does not send the objection as required does not lose his or her right to dissent if the credit union does not send the notice.

21(3)       Subsection 127(4) is amended by adding "or (3.4)" after "(2.1)".

21(4)       Subsection 127(5) is amended by adding "or shareholder" after "member".

22          The following is added after section 128:

Continuance under this Act

128.1(1)    A body corporate incorporated or continued otherwise than under this Act may apply to the Registrar for a certificate of continuance if it is authorized to do so by the Act under which it was incorporated or continued.

Amending articles as part of continuance

128.1(2)    A body corporate that applies for a certificate of continuance may effect in its articles of continuance any change or amendment to its articles if it is a change or amendment a credit union incorporated under this Act may make to its articles.

Articles of continuance and by-laws must be filed

128.1(3)    A body corporate that applies for a certificate of continuance must send to the Registrar

(a) articles of continuance;

(b) a notice of registered office; and

(c) its by-laws.

Issuing certificate of continuance

128.1(4)    The Registrar may file the articles and issue a certificate of continuance in accordance with section 228 if the Registrar

(a) is satisfied that the body corporate will be operated as a credit union and has the ability to comply with the requirements established in this Act and the regulations; and

(b) believes that it is appropriate that the body corporate be continued under this Act.

Effect of certificate of continuance

128.1(5)    On and after the date shown in the certificate of continuance issued under subsection (4)

(a) the body corporate becomes a credit union to which this Act applies as if it had been incorporated under this Act;

(b) the articles of continuance are deemed to be the credit union's articles of incorporation;

(c) the certificate of continuance is deemed to be the credit union's certificate of incorporation;

(d) the articles and by-laws of the body corporate in effect prior to the date shown in the certificate of continuance no longer apply; and

(e) no provision of the Act under which the body corporate was incorporated or formerly continued applies to the credit union unless the articles provide otherwise.

Notifying body's former jurisdiction

128.1(6)    When the Registrar issues a certificate of continuance to a body corporate, the Registrar must at the same time send a copy of the certificate of continuance to the appropriate official or regulator in the jurisdiction in which continuance under this Act was authorized.

Some effects of continuance

128.1(7)    When a body corporate is continued as a credit union under this section,

(a) the property of the body corporate continues to be the property of the credit union;

(b) the credit union continues to be liable for the obligations of the body corporate;

(c) an existing cause of action, claim or liability to prosecution is not affected;

(d) a civil, criminal or administrative action or proceeding pending by or against the body corporate may be continued by or against the credit union; and

(e) a conviction against or ruling, order or judgment in favour of or against the body corporate may be enforced by or against the credit union.

Some effects of continuance on shares and shareholders

128.2(1)    When a body corporate is continued as a credit union under section 128.1,

(a) its membership or common shares are deemed to be common shares to which are attached the rights, privileges and restrictions of common shares set out in this Act and its articles, including the issue price set out in its articles;

(b) the holders of the membership or common shares of the body corporate are deemed to be the members of the credit union; and

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

Issued shares

128.2(2)    When a body corporate is continued as a credit union under section 128.1,

(a) a share of the body corporate issued before it was continued is deemed to have been issued in compliance with this Act and with the provisions of the articles of continuance, irrespective of whether the share is fully paid and irrespective of any designation, preference, right, privilege, restriction or condition set out on or referred to in the certificate representing the share;

(b) the continuance

(i) does not deprive a member or shareholder of any right, preference or privilege that the member or shareholder claims under an issued share, unless the right, preference or privilege is inconsistent with the rights, preferences and privileges of members or shareholders under this Act or the regulations, and

(ii) does not relieve the member or shareholder of any liability in respect of an issued share; and

(c) the credit union's shares carry voting rights only to the extent permitted by this Act.

Conversion privilege

128.2(3)    If a credit union continued under section 128.1 had, before the continuance, issued a certificate for shares in registered form that is convertible to bearer form, the credit union may, if the holder of the certificate exercises the conversion privilege attached to the certificate, issue a certificate in bearer form for the same number of shares to the holder.

Continuance under other provincial Acts

128.3(1)    A credit union may continue as a body corporate under another Act if that Act permits it.

Section 128.4 applies to continuance under another Act

128.3(2)    Section 128.4 applies, with necessary changes, to a continuance mentioned in subsection (1).

Continuance in another jurisdiction

128.4(1)    Subject to subsections (2) to (6) and (11), a credit union may apply to the appropriate official or regulator of Canada, a province of Canada or another jurisdiction requesting that the credit union be continued as a body corporate under the laws of that other jurisdiction if

(a) the members have approved the continuance by a special resolution;

(b) the credit union satisfies the Registrar that the proposed continuance will not adversely affect

(i) the credit union's members, shareholders and creditors, and

(ii) the credit union system; and

(c) the Registrar and guarantee corporation approve the continuance.

Notifying members

128.4(2)    The credit union must

(a) send, in accordance with section 63, to each member a notice of its intention to continue and a notice of a meeting of members; and

(b) state in the notice

(i) that a member is entitled to dissent in accordance with section 127,

(ii) that, if the continuance takes place, the guarantee of deposits by the guarantee corporation under section 158 will not continue, except to such an extent as the guarantee corporation may specify; and

(iii) the details of the deposit guarantee or deposit insurance in the jurisdiction in which the credit union intends to continue.

Waiver of notice

128.4(3)    A member or other person entitled to attend the meeting of members required by this section may in any manner waive notice of the meeting.  The attendance of the member or other person at the meeting is itself a waiver of notice of the meeting, except if that person attends for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called.

Approving continuance by special resolution

128.4(4)    An application for continuance becomes authorized when the members have approved it by a special resolution.

Abandoning continuance

128.4(5)    If authorized by the members at the time of approving an application for continuance under this section, the directors may abandon the application without further approval of the members.

Notice to non-member depositors

128.4(6)    Before seeking the Registrar's and the guarantee corporation's approval to continue outside Manitoba, the credit union must send each depositor who is not also a member a notice of its intention to continue.  The notice must also state that, if the continuance takes place, the guarantee of deposits by the guarantee corporation under section 158 will not continue, except to such an extent as the guarantee corporation may specify.

Certificate of discontinuance

128.4(7)    On receipt of notice satisfactory to the Registrar that the credit union has been continued under the laws of another jurisdiction, the Registrar must file the notice and issue a certificate of discontinuance in accordance with section 228.

Notice of continuance deemed to be articles

128.4(8)    For the purposes of section 228, a notice mentioned in subsection (7) is deemed to be articles that conform to law.

Act ceases to apply when certificate issued

128.4(9)    This Act ceases to apply to the credit union on the date shown in the certificate of discontinuance.

Date of certificate

128.4(10)   A certificate of discontinuance may be dated as of the day the credit union is continued under the laws of another jurisdiction.

Restrictions on continuance outside Manitoba

128.4(11)   A credit union may not be continued as a body corporate under the laws of another jurisdiction unless

(a) those laws provide, in effect, that

(i) the property of the credit union continues to be the property of the continued body corporate,

(ii) the continued body corporate continues to be liable for the obligations of the credit union,

(iii) an existing cause of action, claim or liability to prosecution is not affected,

(iv) a civil, criminal or administrative action or proceeding pending by or against the credit union may be continued by or against the continued body corporate, and

(v) a conviction against or ruling, order or judgment in favour of or against the credit union may be enforced by or against the continued body corporate; and

(b) if the credit union is to be continued

(i) as a deposit-taking institution, the deposits it holds will, to the extent required by the laws of the jurisdiction under whose laws the credit union is to be continued, be insured or guaranteed by the deposit insurer or similar entity for the jurisdiction, or

(ii) as a body corporate other than a deposit-taking institution, the body corporate will not hold any deposits when it is continued.

23          The centred heading for Part XI is amended by striking out "CORPORATIONS" and substituting "CORPORATION".

24          Section 142 is replaced with the following:

Guarantee corporation continued

142         The guarantee corporation is continued as a body corporate.

25(1)       Subsection 143(1) is amended in the section heading and the part of the subsection before clause (a) by striking out "a guarantee" and substituting "the guarantee".

25(2)       Subsection 143(2) is amended

(a) by striking out "a guarantee" and substituting "the guarantee"; and

(b) by striking out "assigned to it".

26          Section 144 is amended

(a) in the part before clause (a), by striking out "a guarantee" and substituting "the guarantee";

(b) by replacing clause (e) with the following:

(e) for the purpose of establishing and maintaining the guarantee fund, determine the levies to be imposed on the credit unions and impose those levies on them;

(c) in clause (f), by striking out "assigned to it";

(d) in clause (h), by striking out "a central" and substituting "the central";

(e) in clause (i), by striking out "of a central" and substituting "member of the central";

(f) by replacing clause (k) with the following:

(k) determine and establish the type and nature of information required to be provided

(i) by a credit union, and

(ii) by the credit union's central, if it is incorporated or continued under this Act or incorporated under a regulation made under this Act,

to enable the guarantee corporation to monitor the performance and financial viability of the credit union, of credit unions collectively or of the central;

(g) in clauses (m) and (n), by striking out "assigned to it"; and

(h) in clause (o.2), by striking out "the credit unions assigned to it" and substituting "credit unions".

27          The following is added after section 144:

Providing service in French to caisses populaires and their members

144.1       The guarantee corporation must ensure that

(a) it is able to provide service in French to the members of the caisses populaires; and

(b) it is able to provide service in French to the caisses populaires in accordance with the regulations.

28          Section 145 is replaced with the following:

Board of the guarantee corporation

145         The affairs of the guarantee corporation are to be administered by a board of five to seven members selected in accordance with the regulations and appointed by the Lieutenant Governor in Council, one of whom must be selected and appointed as the board's chair.

Remuneration

145.1       The remuneration of the chair and the other members of the board shall be determined by the Lieutenant Governor in Council.

29          Section 146 is repealed.

30          Section 147 is replaced with the following:

Who may be a member of the board

147(1)      A person may be a member of the board of the guarantee corporation if he or she is 18 years of age or older and a resident of Canada.

Who may not be a member of the board

147(2)      Despite subsection (1), a person may not be a member of the board if he or she is

(a) an undischarged bankrupt;

(b) an employee of the guarantee corporation;

(c) an employee, director or officer of a credit union, the central or another entity with or in which a credit union makes deposits or investments to comply with its liquidity reserve requirements under this Act or the regulations;

(d) the guarantee corporation's auditor or a professional employee or member of the firm of such an auditor;

(e) the auditor of a credit union, the central or another entity with or in which a credit union makes deposits or investments to comply with its liquidity reserve requirements under this Act or the regulations, or a professional employee or member of the firm of such an auditor;

(f) the guarantee corporation's solicitor, or a professional employee or member of the solicitor's firm;

(g) a civil servant whose official duties are concerned with the affairs of the guarantee corporation;

(h) a real estate appraiser used by the guarantee corporation, or a professional employee or member of the appraiser's firm;

(i) a member of a credit union who is in arrears for more than 180 days under a debt obligation to the credit union;

(j) a member of a credit union who has a significant interest in a corporation or partnership that is in arrears for more than 180 days under a debt obligation to the credit union;

(k) the spouse or dependent child of a member referred to in clause (i) or (j); or

(l) a person who belongs to a class of persons prescribed in the regulations.

31          Sections 150 and 151 are replaced with the following:

Ceasing to hold office

150         A member of the guarantee corporation's board ceases to hold office if the member

(a) resigns;

(b) dies;

(c) is disqualified from holding the office under section 147; or

(d) is removed from office by the Lieutenant Governor in Council.

Power to manage

151         The board

(a) must exercise the powers of the guarantee corporation directly, or indirectly through the guarantee corporation's employees and agents;

(b) must direct the management of the guarantee corporation's business and affairs; and

(c) may determine the remuneration of the guarantee corporation's officers and other employees.

32          Sections 155 to 158 are replaced with the following:

Fiscal year

155         The guarantee corporation's fiscal year ends on December 31 each year.

Annual financial statements

155.1(1)    The board must ensure that, without delay after the end of each fiscal year, annual financial statements are prepared that comply with the requirements for the financial statements of a credit union.

Financial statements must include auditor's report

155.1(2)    The board must ensure that the report of the guarantee corporation's auditor is appended to the annual financial statements.

Disclosure of directors' remuneration and expenses

155.2       The guarantee corporation's directors must annually disclose to the Registrar in a form satisfactory to him or her

(a) the aggregate amount of remuneration paid to all directors;

(b) the aggregate amount paid to all directors as reimbursement for expenses incurred on guarantee corporation business; and

(c) the aggregate amount the guarantee corporation paid on behalf of the directors.

Auditor must be approved by the Registrar

156         The guarantee corporation must not appoint a person as its auditor unless the auditor is approved by the Registrar.

Application of other provisions

157(1)      The following provisions apply, with necessary changes, to the guarantee corporation:

(a) subsection 79(2);

(b) subsection 84(1), clauses 84(3)(c) and (d) and subsections 84(4) to (6);

(c) subsection 85(1) and clauses 85(2)(c) and (d);

(d) sections 86 and 87;

(e) subsections 88(1) and (3) to (5);

(f) sections 89 and 90;

(g) subsections 91(1) to (9), (11) to (13);

(h) subclauses 92(a)(iii) and (iv) and clauses 92(b) to (d);

(i) sections 94 to 96 and 99;

(j) subsections 102(2) to (7);

(k) section 103;

(l) subsections 105(1) and (4);

(m) section 106;

(n) subsections 108(1) and (3) to (5);

(o) sections 110 to 113.

Interpretation of references to section 98

157(2)      Without limiting the changes that may be necessary in applying the provisions referred to in subsection (1) to the guarantee corporation, a reference to section 98 in any of the provisions is to be read as a reference to section 155.1.

Guarantee of deposits

158         Except as provided in the regulations, the guarantee corporation must guarantee every deposit in a credit union incorporated or continued under this Act.

33          Section 159 is repealed.

34(1)       Subsection 160(1) is amended in the part before clause (a)

(a) in the English version, by striking out "a guarantee corporation" and substituting "the guarantee corporation"; and

(b) by striking out "assigned to it".

34(2)       Subsection 160(2) is amended

(a) by striking out "A guarantee corporation shall send by mail to each credit union assigned to it, prior to the end of each quarter of each fiscal year of the guarantee corporation, a notice of" and substituting "Before the end of each quarter of the guarantee corporation's fiscal year, it must notify each credit union about"; and

(b) in the English version, by striking out "based and" and substituting "based, and".

34(3)       Subsection 160(3) of the English version is amended by striking out "a guarantee corporation" and substituting "the guarantee corporation".

34(4)       Subsection 160(4) is amended in the part before clause (a)

(a) by striking out "If in the opinion of the board of a guarantee corporation the guarantee fund of the corporation" and substituting "If the guarantee corporation's board believes that the guarantee fund"; and

(b) by striking out "written notice require each credit union assigned to it" and substituting "notice require each credit union".

34(5)       Subsection 160(5) of the English version is amended by striking out "A guarantee corporation" and substituting "The guarantee corporation".

34(6)       Subsection 160(6) is amended

(a) by striking out "Where a guarantee corporation" and substituting "If the guarantee corporation"; and

(b) by striking out "assigned to it".

35(1)       Subsections 161(1) and (3) of the English version are amended by striking out "a guarantee corporation" and substituting "the guarantee corporation".

35(2)       Subsection 161(4) of the English version is amended

(a) by striking out "a guarantee corporation" and substituting "the guarantee corporation"; and

(b) by striking out "by-laws of the corporation, which in the opinion of the corporation," and substituting "guarantee corporation's by-laws, which in its opinion".

36(1)       Section 162(1) is replaced with the following:

Annual report to Registrar and credit unions

162(1)      Without delay after its annual financial statements and auditor's report have been prepared, the board of the guarantee corporation must report to the Registrar and the credit unions about the guarantee corporation's administration.

Information to be included in report

162(1.1)    As part of the report required by subsection (1), the board must include

(a) copies of the guarantee corporation's annual financial statements and the auditor's annual report; and

(b) a copy of the disclosure of directors' remuneration and expenses required by section 155.2.

36(2)       Subsection 162(2) is amended by striking out "a guarantee corporation shall report to the Registrar on the administration of that guarantee corporation" and substituting "the guarantee corporation must report to the Registrar about the guarantee corporation's administration".

37          The following is added after section 163 as part of Part XI:

Credit committee

163.1(1)    Subject to the regulations, the guarantee corporation must establish a credit committee to monitor the credit granting procedures of credit unions in Manitoba.

Duties of the credit committee

163.1(2)    The credit committee must perform the duties assigned to it under this Act and the regulations.

Agreement with third party re credit committee

163.1(3)    With the approval of the Registrar, the guarantee corporation may enter into an agreement with another entity

(a) to obtain advice and recommendations about establishing the credit committee and about its operation; and

(b) to obtain services for the day-to-day operation of the credit committee.

Amalgamation

163.2(1)    With the approval of the minister, the guarantee corporations may, in accordance with this section, amalgamate and continue as a single guarantee corporation.

Amalgamation agreement required

163.2(2)    If the guarantee corporations propose to amalgamate, they must enter into an amalgamation agreement setting out the terms of the amalgamation and the details of how it is to be carried out.

Documents to be sent to the Registrar

163.2(3)    Without delay after entering into an amalgamation agreement, the guarantee corporations must send to the Registrar

(a) a copy of the amalgamation agreement;

(b) a copy of the by-laws that are proposed for the amalgamated guarantee corporation; and

(c) the statutory declaration referred to in subsection (4).

Statutory declaration

163.2(4)    A director or officer of each amalgamating guarantee corporation must execute a statutory declaration that establishes to the satisfaction of the Registrar that there are reasonable grounds for believing that

(a) each amalgamating guarantee corporation is, and the amalgamated guarantee corporation will be, able to pay its liabilities as they become due;

(b) the realizable value of the assets of the amalgamated guarantee corporation after the amalgamation is carried out will not be less than its liabilities; and

(c) no creditor of the amalgamating guarantee corporations will be prejudiced by the amalgamation.

Certificate of amalgamation

163.2(5)    After receiving the documents referred to in subsection (3), the Registrar may, if he or she is satisfied that the amalgamation is advisable, issue a certificate of amalgamation in accordance with section 228.

Effect of certificate of amalgamation

163.2(6)    On the effective date shown in the certificate of amalgamation,

(a) the amalgamation of the amalgamating guarantee corporations and their continuance as a single guarantee corporation becomes effective;

(b) the property of each amalgamating guarantee corporation continues to be the property of the amalgamated guarantee corporation;

(c) the amalgamated guarantee corporation continues to be liable for the obligations of each amalgamating guarantee corporation;

(d) any existing cause of action, claim or liability to prosecution is not affected; and

(e) a civil, criminal or administrative action or proceeding pending by or against either of the amalgamating guarantee corporations may be continued by or against the amalgamated guarantee corporation.

Revocation of appointments of former directors

163.2(7)    The appointments of the directors of the amalgamating guarantee corporations are revoked on the effective date shown in the certificate of amalgamation.

Repeal

163.2(8)    This section is repealed on a day to be fixed by proclamation.

38          The following is added after section 164:

CUCM continued as a body corporate

164.1       Credit Union Central of Manitoba Limited is continued as a body corporate.

39          Section 165 is replaced with the following:

Purposes of the central

165         The purposes of the central are

(a) to receive and manage the liquidity reserves of credit unions;

(b) to develop and, on a cooperative basis, to provide to credit unions financial services and other services

(i) that the credit unions may require, and

(ii) that, by their nature, can be most effectively provided by a central,

including educational, research, and advisory work relating to credit unions and the function of a central;

(c) to promote and develop sound management principles and operating procedures for the benefit of credit unions;

(d) to promote the organization, development and welfare of credit unions in Manitoba; and

(e) to encourage cooperation among cooperatives, credit unions and caisses populaires.

40          The following provisions are amended by striking out "a central", with necessary grammatical changes, wherever it occurs and substituting "the central", with necessary grammatical changes:

(a) the section heading for subsection 166(1) and subsections 166(1) and (2);

(b) sections 168 to 173;

(c) the part of section 174 before clause (a);

(d) sections 175 to 177.1 and 180 to 186.

41(1)       Subsection 167(1) is amended

(a) in the section heading of the English version, by striking out "a" and substituting "the"; and

(b) by striking out "a central" and substituting "the central".

41(2)       Subsection 167(2) is replaced with the following:

Restricted business or powers

167(2)      The central must not

(a) carry on a business or exercise a power that its charter by-laws restrict it from carrying on or exercising; or

(b) exercise any of its powers in a manner contrary to its charter by-laws.

41(3)       Subsection 167(3) is amended by striking out "a central" and substituting "the central".

42          Section 178 is replaced with the following:

Membership in the central

178(1)      A credit union must be a member of the central.

Effect of continuance of central

178(2)      Subsection (1) does not apply to the credit unions if the central continues under section 190.1 in a jurisdiction outside Manitoba.

43(1)       Subsection 179(1) is amended

(a) by striking out "A central" and substituting "The central"; and

(b) in the French version, by striking out "caisses populaires" and substituting "credit unions".

43(2)       Subsection 179(2) is amended by striking out "a central" and substituting "the central".

44          Section 187 is replaced with the following:

Who may be a director

187(1)      A person may be a director of the central if he or she is

(a) the delegate of a credit union;

(b) 18 years of age or older; and

(c) a citizen of Canada.

Who may not be a director

187(2)      Despite subsection (1), a person may not be a director of the central if he or she is

(a) an undischarged bankrupt;

(b) an employee, auditor or solicitor of the central or guarantee corporation;

(c) a civil servant whose official duties are concerned with the affairs of the central or of credit unions; or

(d) the delegate of a credit union that is not complying with the requirements set out in the central's charter by-laws.

45(1)       Subsection 188(1) is amended by striking out "a central" and substituting "the central".

45(2)       Subsection 188(2) is amended by striking out "a central and a credit union that is assigned to it" and substituting "the central and a credit union".

46          Section 189 is amended

(a) by striking out "A central or a subsidiary of the central" and substituting "The central or a subsidiary of the central"; and

(b) by striking out "within its system".

47(1)       Section 190 is amended

(a) by renumbering it as subsection 190(1); and

(b) by striking out "A central" and substituting "The central".

47(2)       Section 190 is further amended by adding the following as subsection 190(2):

Effect of continuance of central

190(2)      Subsection (1) ceases to have effect if the central continues under section 190.1 in a jurisdiction outside Manitoba.

48          The following is added after section 190 as part of Part XII:

Continuance in another jurisdiction

190.1(1)    Subject to subsections (2) to (6) and (11), Credit Union Central of Manitoba Limited may apply to the appropriate official or regulator of Canada or a province of Canada requesting that it be continued as a body corporate under the laws of Canada or that province if

(a) its members have approved the continuance by a special resolution;

(b) it satisfies the Registrar that the proposed continuance will not adversely affect its members and creditors; and

(c) the minister approves the continuance.

Notifying members

190.1(2)    Credit Union Central of Manitoba Limited must send, in accordance with section 63, to each of its members a notice of its intention to continue and a notice of a meeting of members.

Application of section 64

190.1(3)    Section 64 applies with necessary changes to a members' meeting called to consider a resolution referred to in clause (1)(a).

Approving continuance by special resolution

190.1(4)    An application for continuance becomes authorized when the members have approved it by a special resolution.

Abandoning continuance

190.1(5)    If authorized by the members at the time of approving an application for continuance under this section, the directors may abandon the application without further approval of the members.

Notice to non-member depositors

190.1(6)    Before seeking the minister's approval to continue outside Manitoba, Credit Union Central of Manitoba Limited must send each of its depositors who is not also a member a notice of its intention to continue.

Certificate of discontinuance

190.1(7)    On receipt of notice satisfactory to the Registrar that Credit Union Central of Manitoba Limited has been continued under the laws of another jurisdiction, the Registrar must file the notice and issue a certificate of discontinuance in accordance with section 228.

Notice of continuance deemed to be articles

190.1(8)    For the purposes of section 228, a notice mentioned in subsection (7) is deemed to be articles that conform to law.

Act ceases to apply when certificate issued

190.1(9)    This Act ceases to apply to Credit Union Central of Manitoba Limited on the date shown in the certificate of discontinuance.

Date of certificate

190.1(10)   A certificate of discontinuance may be dated as of the day Credit Union Central of Manitoba Limited is continued under the laws of another jurisdiction.

Restrictions on continuance outside Manitoba

190.1(11)   Credit Union Central of Manitoba Limited may not be continued as a body corporate under the laws of another jurisdiction unless those laws provide, in effect, that

(a) its property continues to be the property of the continued body corporate;

(b) the continued body corporate continues to be liable for the obligations of Credit Union Central of Manitoba Limited;

(c) an existing cause of action, claim or liability to prosecution is not affected;

(d) a civil, criminal or administrative action or proceeding pending by or against Credit Union Central of Manitoba Limited may continue to be prosecuted by or against the continued body corporate; and

(e) a conviction against or ruling, order or judgment in favour of or against Credit Union Central of Manitoba Limited may be enforced by or against the continued body corporate.

49          The definition "complainant" in section 191 is amended

(a) in the English version, by striking out "or" at the end of clauses (a), (b) and (d) to (g);

(b) in the French version, by striking out the comma at the end of clauses (a), (b) and (d) to (h) and substituting a semi-colon;

(c) by replacing clause (c) with the following:

(c) a director or officer, or former director or officer, of a credit union, central or guarantee corporation, or of any of their subsidiaries;

(d) in clauses (g) and (h), by striking out "a" and substituting "the".

50(1)       Subsection 194(2) is amended

(a) in the part before clause (a) of the English version, by striking out "any" and substituting "a";

(b) in clauses (b) and (c) of the English version, by striking out "a credit union" and substituting "the credit union"; and

(c) in clause (b) of the French version, by striking out "il" and substituting "elle".

50(2)       Subsection 194(3) is amended

(a) in clause (b), by striking out everything after "placing" and substituting "the credit union under supervision within the meaning of section 209 or the central under supervision within the meaning of section 210";

(b) by repealing clause (c);

(c) in clause (d), by striking out "a credit union" and substituting "the credit union";

(d) in clause (f), by striking out "a central" and substituting "the central";

(e) in clause (g), by striking out "a credit union" and substituting "the credit union";

(f) by repealing clause (i); and

(g) in the English version, by adding "or" at the end of clause (j).

50(3)       The following is added after section 194(3):

Application of sections 212 to 217 to supervision order

194(3.1)    If an order is made under clause (3)(b), sections 212 to 217 apply, with necessary changes, to the supervision of the credit union or central.

50(4)       Subsection 194(4) is amended in the part before clause (a) by adding "the" before "central".

51          Section 196 is replaced with the following:

Application to court to rectify records

196(1)      If the name of a person is alleged to be or to have been incorrectly registered or retained in, or incorrectly deleted or omitted from, the registers or other records of a credit union, central or guarantee corporation, any of the following persons may apply to the court for an order that the registers or records be rectified:

(a) the credit union, or a member or security holder of the credit union;

(b) the central, or a member or security holder of the central;

(c) the guarantee corporation or a security holder of the guarantee corporation;

(d) another complainant.

Powers of court

196(2)      Upon an application under this section, the court may make any order it considers appropriate, including an order

(a) requiring the registers and records of the credit union, central or guarantee corporation to be rectified;

(b) restraining the credit union or central from calling or holding a meeting of members or allocating or paying interest before the registers or records are rectified;

(c) determining the right of a party to the proceedings to have the party's name entered or retained in, or deleted or omitted from the registers or records of the credit union or central, whether the issue arises

(i) between two or more members or other security holders, or alleged members or security holders, or

(ii) between the credit union or central and a member or security holder or alleged member or security holder; or

(d) compensating a party who has incurred a loss by reason of the incorrect entry, retention, deletion or omission of the party's name from the registers or records.

52          Sections 197 and 198 are repealed.

53          Subsection 204(1) is replaced with the following:

Submitting information to Registrar

204(1)      To enable the Registrar to carry out his or her duties under section 203, a credit union, the central or the guarantee corporation must prepare and submit to the Registrar such information with respect to its business and affairs as the Registrar may require.

54          Sections 205 and 206 are replaced with the following:

False or inaccurate reports

205         No person shall make or assist in making a report, return, notice or other document required by this Act or the regulations to be sent to the Registrar or another person that

(a) contains an untrue statement of a material fact; or

(b) omits to state a material fact

(i) required to be stated in the document, or

(ii) necessary to make a statement contained in the document not misleading in the context of the circumstances in which it was made.

Offence and penalty

206         A person who contravenes a provision of this Act or the regulations or disobeys an order made by the Registrar, for which no other penalty is provided, is guilty of an offence and is liable on summary conviction

(a) if the person is an individual, to a fine of not more than $5,000 or imprisonment for a term of not more than six months, or both; or

(b) in any other case, to a fine of not more than $25,000.

Directors and officers

206.1       If a body corporate commits an offence under this Act, a director or officer of the body corporate who authorized, permitted or acquiesced in the commission of the offence is also guilty of an offence and is liable on summary conviction to the same penalties as an individual committing that offence, whether or not the body corporate has been prosecuted or convicted.

55          Section 209 is amended

(a) in the part before clause (a) of the English version,

(i) by striking out "Where" and substituting "If", and

(ii) by striking out "the Act" and substituting "this Act";

(b) by striking out "or" at the end of clauses (a) to (c) of the English version; and

(c) in the part after clause (e), by striking out "a supervisor appointed by the Registrar" and substituting "the guarantee corporation".

56          Section 210 is amended

(a) in the part before clause (a),

(i) by striking out "Where the Registrar is satisfied that a central" and substituting "If the Registrar is satisfied that the central", and

(ii) in the English version, by striking out "the Act" and substituting "this Act";

(b) in clause (a) of the English version,

(i) by striking out "a central" and substituting "the central", and

(ii) by striking out "or" at the end;

(c) in clause (b) of the English version,

(i) by striking out "a central's" and substituting "the central's", and

(ii) by striking out "or" at the end;

(d) by replacing clause (c) with the following:

(c) the central is unable to carry out its duties to manage credit unions' liquidity reserves; or

(e) in clause (d) of the English version, by striking out "a central" and substituting "the central".

57          Section 211 is repealed.

58          Section 213 of the English version is amended by striking out "or" at the end of clauses (a) to (c).

59          Subsection 214(2) is amended by striking out "the necessary changes, to a supervisor appointed to liquidate" and substituting "necessary changes, to the guarantee corporation in relation to liquidating".

60          Section 215 of the English version is amended by striking out "its powers" and substituting "the supervisor's powers".

61          Section 216 is amended by striking out "appointed by the Registrar".

62(1)       Subsection 218(1) is amended by striking out "a guarantee" and substituting "the guarantee".

62(2)       Subsection 218(2) is amended by striking out "Where a guarantee" and substituting "If the guarantee".

63          Subsection 219(1) is amended in the part before clause (a) by striking out "required by this Act, or by the by-laws of a credit union, or central," and substituting "that is required by this Act or the by-laws of a credit union or the central".

64          Subsection 223(2) of the English version is amended by striking out "or" at the end of clause (a).

65(1)       Subsection 227(1) is amended

(a) in clause (e), by adding ", relocation or closing" after "establishment";

(b) by adding the following after clause (k):

(k.1) respecting conditions, restrictions or limitations on a credit union acquiring part or all of another lender's interest in a loan;

(c) by replacing clause (p) with the following:

(p) respecting liquidity reserves to be established and maintained, including

(i) requiring a credit union to make deposits or investments in or with an entity prescribed under subclause (ii) or approved by the Registrar under subclause (iii),

(ii) prescribing entities in or with which a credit union may or must make deposits or investments to comply with its liquidity reserve requirements,

(iii) authorizing the Registrar

(A) to approve entities for the purposes of subclause (i), whether in addition to entities prescribed under subclause (ii) or in the absence of the prescription of any entity under that subclause,

(B) to impose conditions on the approval of an entity and to enforce the conditions against the entity, and

(C) to revoke his or her approval whenever he or she considers it appropriate,

(iv) requiring a credit union, or authorizing the Registrar to require a credit union, to be a member of an entity prescribed under subclause (ii) or approved by the Registrar under subclause (iii), and

(v) prescribing deposits and investments that a credit union may make to comply with its liquidity reserve requirements or criteria that deposits and investments must meet to qualify for liquidity reserve purposes;

(p.1) respecting the manner in which the central is to carry out the duties referred to in clause 165(a);

(p.2) respecting conditions, restrictions or limitations on a credit union placing with another credit union part of a deposit accepted by the credit union;

(d) in clause (z),

(i) by striking out "a" and substituting "the", and

(ii) by adding "and prescribing classes of persons who may not be directors of the guarantee corporation" at the end;

(e) in clause (aa), by adding ", prescribing its duties and governing its activities" at the end;

(f) by replacing clause (dd) with the following:

(dd) respecting the incorporation, governance and affairs of bodies corporate to accept deposits from credit unions and to make investments on their behalf for the purpose of complying with their liquidity reserve requirements under this Act or the regulations;

(g) by adding the following after clause (dd):

(ee) for the purposes of section 158, respecting the guarantee of deposits in credit unions;

(ff) for the purposes of section 144.1, prescribing services that the guarantee corporation must provide in French to the caisses populaires;

(gg) respecting annual and other general meetings of and special meetings of credit union members, including

(i) with or without conditions, authorizing credit unions to hold annual or other general members' meetings or special members' meetings by holding two or more simultaneous meetings in different locations at which the members at each location are able to communicate with members at the other locations by means of electronic communication technology,

(ii) prescribing the requirements for holding such meetings,

(iii) governing voting at members' meetings and counting votes, and

(iv) prescribing conditions to ensure that members participating in a meeting authorized under subclause (i) are able to exercise their members' rights fully and in an informed manner;

(hh) exempting, with or without conditions, a person or credit union, or a class of persons or credit unions, from the operation of a provision of this Act;

(ii) respecting any transitional or other problem resulting from an amalgamation under

(i) section 124.1, or

(ii) section 163.2;

(jj) respecting any matter the Lieutenant Governor in Council considers necessary or advisable to carry out the purposes of this Act.

65(2)       The following is added after subsection 227(3):

Application of regulations

227(4)      A regulation made under subsection (1) may be general or particular in its application and may establish classes of credit unions and provide differently for different classes.

66          Subsection 233(4) is amended by striking out "within 2 years of" and substituting "within two years after".

Coming into force — royal assent

67(1)       Subject to subsection (2), this Act comes into force on the day it receives royal assent.

Coming into force — proclamation

67(2)       The following provisions come into force on a day to be fixed by proclamation:

(a) clause 2(1)(a), insofar as it enacts the definitions "central" and "guarantee corporation";

(b) clauses 2(1)(c) to (e);

(c) subsection 2(2);

(d) clauses 3(b) and (c);

(e) subsections 4(1), (2) and (4);

(f) section 10;

(g) clause 21(1)(a);

(h) sections 23 to 27;

(i) section 28, insofar as it enacts section 145;

(j) sections 29 to 32 and 34 to 47;

(k) clause 49(d);

(l) clauses 50(2)(d) and (f);

(m) sections 51 to 53, 55 to 57, 59 and 61 to 63;

(n) clauses 65(1)(d) and (f);

(o) clause 65(1)(g), insofar as it enacts clauses 227(1)(ee) and (ff) and subclause 227(1)(ii)(ii).