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S.M. 2004, c. 29
Bill 35, 2nd Session, 38th Legislature
The Credit Unions and Caisses Populaires Amendment Act
(Assented to June 10, 2004)
HER MAJESTY, by and with the advice and consent of the Legislative Assembly of Manitoba, enacts as follows:
Subsection 1(1) is amended
(a) by adding the following definitions in alphabetical order:
"board of directors" means the directors as a body; (« conseil d'administration »)
"CUCM" means Credit Union Central of Manitoba Limited; (« CUCM »)
"resident in Manitoba", in relation to a person, means that the person is legally entitled to be in Canada, makes his or her home in Manitoba, and is physically present in Manitoba for at least six months in the year; (« résident du Manitoba »)
(b) in the definition "central", by striking out "CCSM" and substituting "CUCM";
(c) by replacing the definition "director" with the following:
"director" means an individual who occupies the position of director, by whatever name called, of a credit union or central; (« administrateur »)
Subsection 2(1) is amended
(a) by striking out "that meet the needs of" and substituting "primarily for"; and
Subsection 2(2) is amended
(a) by striking out "that meet the needs of" and substituting "primarily for"; and
Subsection 5(1) is replaced with the following:
Ten or more adults, none of whom is an undischarged bankrupt, may apply to incorporate a credit union by sending the Registrar two copies of articles of incorporation and of a notice of registered office. The articles and notice must be in the form approved by the Registrar.
Clause 6(4)(b) is replaced with the following:
(b) the location of meetings of members, mode of holding meetings and quorum at meetings;
(b.1) members' rights to make, repeal and amend by-laws;
(b.2) members' voting rights, including, but not limited to, the right to vote by ballot or another method, or by a combination of methods;
Subsections 10(1) and (2) are replaced with the following:
Every credit union that is a member of the CUCM and assigned to The Credit Union Deposit Guarantee Corporation shall have the words "credit union" as part of its name and the word "limited" or abbreviation "ltd." as the last word of the name.
Every caisse populaire that is a member of the Fédération and assigned to the Société d'assurance-dépôts des caisses populaires shall have the words "caisse populaire" as part of its name and the word "limitée" or abbreviation "ltée" as the last word of the name.
Subsection 10(5) is replaced with the following:
Subject to section 12 and The Business Names Registration Act,
(a) a credit union may carry on business under or identify itself by a name other than its full legal name as long as the other name includes "credit union" or "CU"; and
The following is added after subsection 10(8):
Despite subsections (6) and (7), the Registrar may, on request, permit an association, body corporate or partnership to use as part of its name the words "credit union" or "caisse populaire" or a derivative or abbreviation of either of them.
Subsection 18(1) is replaced with the following:
Subsection 28(1) is replaced with the following:
A credit union's board of directors may allocate some or all of any surplus arising from the credit union's operations in a fiscal year as a patronage refund among its members, after
(a) providing for all known liabilities;
(b) allowing for doubtful accounts;
(c) making such other provisions as are required by this Act and the regulations; and
(d) providing for payment of dividends, if any, on all classes of shares.
Each member shall be entitled to a share of a patronage refund allocated to members proportionate to the business he or she does with or through the credit union in the fiscal year, as computed by the directors at a rate they fix by resolution.
The following is added after subsection 28(2):
Subsection 29(1) is replaced with the following:
A credit union may provide in its by-laws that, in a fiscal year, part or all of a patronage refund or common or surplus share dividend credited to a member shall be applied to purchase surplus shares of the credit union for the member, up to the maximum number specified in the by-laws.
The following is added after section 40:
A credit union shall not impose undue pressure on or coerce a member to obtain a product or service from the credit union as a condition for obtaining another product or service from it.
Subsection 42(1) is replaced with the following:
Subject to the regulations, a credit union shall establish loan policies governing all its lending activities.
A credit union may, in accordance with its loan policies and the regulations,
(a) make loans to its members, including directors, officers and employees;
(b) participate in a loan to a member of another credit union incorporated in Manitoba or of a caisse populaire incorporated in Manitoba, if it has entered into a written agreement for that purpose with each other credit union and each caisse populaire participating in the loan; and
(c) acquire from
(i) another credit union incorporated in Manitoba its interest in a loan made to a member of the other credit union, or
Section 51.1 is replaced with the following:
The Securities Act
(a) applies to the issue or sale by a credit union of its securities if they may be issued or sold to the public; and
(b) does not apply to
(i) the issue or sale of surplus shares by a credit union,
(ii) the issue or sale by a credit union of its securities if only credit union members are eligible to own the securities and the issue or sale is restricted to members, or
(iii) deposits in a credit union.
Sections 51.2 to 51.4
(a) apply to a credit union's issue or sale of its securities if The Securities Act does not apply; and
(b) do not apply to
(i) the issue or sale of surplus shares by a credit union,
(ii) a credit union's issue or sale of securities if The Securities Act applies, and
Section 51.2 is replaced with the following:
Before a credit union issues or sells shares or other securities, it shall
(a) send the Registrar an offering statement that
(i) is in a form approved by the Registrar,
(ii) fully, truly and plainly discloses all material facts relating to the shares or securities and the purposes for which the funds to be raised by their issue or sale are to be used,
(iii) complies as to content with, and is otherwise in accordance with, this Act and the regulations, and
(iv) is accompanied by any documents, reports and other material required by this Act and the regulations; and
(b) obtain a receipt for the offering statement.
A credit union shall send the Registrar an amending statement if there is a material change in the facts set out in an offering or amending statement previously sent to the Registrar, whether the change occurs before or after the credit union receives a receipt. The statement shall fully, truly and plainly state the details of the change and be sent within 30 days after the change occurs or the credit union becomes aware of it.
Instead of an amending statement, a credit union may send the Registrar a revised offering statement that contains all material changes of fact that have occurred since the offering statement was sent.
The Registrar may require a credit union to send the Registrar a revised offering statement when there is a material change of the facts set out in the offering statement, or an amending statement or revised offering statement, and the Registrar considers that an amending statement is not appropriate. Within 30 days after the Registrar requires it, the credit union shall send the Registrar a revised offering statement that contains all material changes of fact that have occurred since the offering statement was sent.
When there is a material change in the facts set out in an offering, amending or revised offering statement, the credit union shall immediately cease issuing or selling the shares or securities that the statement relates to. The credit union shall not issue or sell any more of the shares or securities until it sends the Registrar an amending statement or revised offering statement about the change, and receives a receipt.
Section 51.3 is replaced with the following:
The Registrar may issue a receipt for an offering statement, amending statement or revised offering statement, unless the Registrar believes that
(a) the statement or a document required to be sent with the statement
(i) does not comply in a substantial respect with a requirement of this Act or the regulations,
(ii) contains an assertion, promise, estimate or forecast that is misleading or false, or
(iii) conceals or omits to state a material fact;
(b) the proceeds from the issue or sale of the shares or securities described in the statement that are to be paid to the credit union are, together with its other resources, insufficient to accomplish the purpose of the issue or sale stated in the offering statement;
(c) the credit union has paid or given or intends to pay or give an unconscionable consideration for promotional purposes or for the acquisition of property;
(d) the credit union has not entered into an escrow or pooling agreement that the Registrar considers necessary or advisable; or
(e) the credit union has not entered into an agreement that the Registrar considers necessary or advisable to provide for holding the proceeds payable to the credit union from the issue or sale of the shares or securities in trust pending the distribution of the shares or securities.
The Registrar shall not refuse to issue a receipt for an offering statement, amending statement or revised offering statement sent by a credit union under section 51.2 without making a ruling or order and giving the credit union an opportunity to be heard before making it.
Sections 51.2 and 51.3 do not apply to a credit union's issue or sale of shares or other securities if the issue or sale is exempted from the application of those sections by the regulations or by an order of the Registrar.
The Registrar may order a credit union to stop issuing or selling its shares or other securities if
(a) subsection 51.2(1) requires that an offering statement relating to the securities be sent to the Registrar; and
(b) the Registrar thinks that any of the circumstances described in clauses 51.3(1)(a) to (e) exist in respect of the securities or their issue or sale.
Without delay after making the order, the Registrar shall give notice of it to
(a) the credit union; and
(b) an agent of the credit union who is acting in connection with the issue or sale of the shares or securities if the credit union has informed the Registrar about the agency relationship.
The Registrar shall not make the order without first giving the credit union an opportunity to be heard about it.
Despite subsection (3), if the Registrar thinks that the time required for a hearing may be prejudicial to the public interest, he or she may make an order under subsection (1) that expires 15 days after it is made.
A credit union shall not sell a share or security to which section 51.2 applies unless, before the sale, the credit union or its agent provides the purchaser with
(a) a copy of the latest offering statement for the share or security that the Registrar has issued a receipt for; and
(b) any amending statements that the Registrar has issued receipts for in relation to the latest offering statement.
The purchaser of a share or security of a credit union may cancel the purchase by notifying the credit union or the agent who sold the share or security. The notification must
(a) state in writing that the purchaser does not intend to be bound by the sale;
(b) be sent by fax, mail or delivery; and
(c) be received by the credit union or agent no later than 48 hours, excluding Saturdays and holidays, after the later of
(i) the time of the purchase, and
Subsection 54(1) is replaced with the following:
The following is added after subsection 58(4):
A credit union shall send
(a) a copy of the by-laws adopted at the first meeting of its members to the Registrar within 30 days after they are adopted;
(b) a copy of any by-law passed subsequently, and any amendment to its by-laws, to the Registrar within 30 days after the by-law is passed or amended; and
Subsection 66(1) is replaced with the following:
Section 67 is replaced with the following:
A member of a credit union who is 18 years of age or more may vote on matters that are submitted to the members for a decision.
Section 71 is replaced with the following:
Subject to subsection (2), a credit union may, by by-law, establish procedures to permit members to vote by a method other than show of hands or ballot.
Subsection 76(2) is replaced with the following:
Section 77 is replaced with the following:
A person may be a director of a credit union if he or she
(a) is 18 years of age or more, a resident of Canada and a member of the credit union; and
(b) satisfies the requirements set out in the by-laws of the credit union.
Despite subsection (1), a person may not be a director if he or she is
(a) an undischarged bankrupt;
(b) an employee of a credit union, central or guarantee corporation;
(c) the credit union's auditor, or a professional employee or member of the auditor's firm;
(d) the credit union's solicitor, or a professional employee or member of the solicitor's firm;
(e) a civil servant whose official duties are concerned with the affairs of credit unions;
(f) a real estate appraiser used by the credit union, or a professional employee or member of the appraiser's firm;
(g) a member who is in arrears for more than 180 days under a debt obligation to the credit union;
(h) a member 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; or
(i) the spouse or dependent child of a member referred to in clause (g) or (h).
Despite clause (1)(a), at all times not less than 3/4 of a credit union's directors shall be resident in Manitoba.
If at any time the election or appointment of one or more credit union directors results in a board with more directors who are not resident in Manitoba than subsection (3) allows, their election or appointment is void.
If the death, resignation or removal of a director results in a board with more directors who are not resident in Manitoba than subsection (3) allows, the remaining directors
(a) may exercise the powers of directors until the next meeting of the credit union's members, if they constitute a quorum; and
(i) without delay, appoint one or more directors to comply with subsection (3), if the credit union's by-laws allow the directors to fill a vacancy by appointment, or
Subsection 78(1) is replaced with the following:
Each director named in articles of incorporation or amalgamation holds office
(a) in the case of an incorporation, from the issue of the certificate of incorporation until the first meeting of members; or
Subsection 97(1) is replaced with the following:
The following is added after subsection 98(1):
The following is added after clause 98(2)(b):
Subsection 121(1) is replaced with the following:
The following is added after subsection 121(4):
Subsections (1) to (3) do not apply to an amalgamating credit union if its assets, as valued at the end of its most recent fiscal year, represent 90% or more of the total assets of the proposed amalgamated credit union and
(a) its directors approve the amalgamation agreement by resolution;
(b) without delay after the approval, it sends each of its members a notice that includes the information required by clauses (2)(a) and (b); and
Subsection 127(1) is amended by striking out "or" at the end of clause (a) and by replacing clause (b) with the following:
The following is added after subsection 127(2):
When subsection 121(5) applies to an amalgamating credit union, a member may dissent by sending a written objection to the amalgamation to the Registrar within 15 days after the credit union sends him or her the notice required by clause 121(5)(b). A member who does not send the objection as required, does not lose his or her right to dissent if the credit union does not send him or her the notice.
Subsection 132(9) is replaced with the following:
Before the Registrar issues a certificate of dissolution, a credit union may revoke the certificate of intent to dissolve by sending the Registrar a statement of revocation of intent to dissolve if the certificate's revocation is approved in the same manner as the resolution under subsection (3).
Subsection 133(1) is replaced with the following:
Section 143 is replaced with the following:
The purposes of a guarantee corporation are to
(a) guarantee deposits in credit unions;
(b) promote credit unions' development of sound business practices to protect them from financial losses; and
(c) ensure that credit unions operate under sound business practices.
Without limiting the generality of subsection (1), a guarantee corporation shall do all things that are necessary to enable the credit unions assigned to it to satisfy requests for withdrawal of deposits.
The following is added after clause 144(o.1):
Section 188 is amended by renumbering it as subsection 188(1) and by adding the following as subsection 188(2):
Subsection 227(1) is amended
(a) by repealing clause (f); and
(b) by replacing clause (s) with the following:
(s) respecting the capital that a credit union or central must have and maintain, including, but not limited to, providing for the methods of calculating a credit union's or central's capital or determining whether it meets the capital requirements of the Act and regulations, and authorizing the Registrar to assign risk ratings to financial products that are not rated in the regulations;
The following is added after section 228:
The Registrar may
(a) approve the form and content of any document that this Act or the regulations require a person to file with or send to the Registrar;
(b) approve the form and content of any document that this Act or the regulations require the Registrar to issue, publish or provide to a person;
(c) require that additional information or documents must be provided when documents are filed with or sent to the Registrar; and
(d) direct how many originals or copies of a document must be filed, sent, provided or issued.
This Act comes into force on the day it receives royal assent.