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The Credit Unions and Caisses Populaires Amendment Act

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S.M. 2021, c. 24

Bill 22, 3rd Session, 42nd Legislature

The Credit Unions and Caisses Populaires Amendment Act

Explanatory Note

This note was written as a reader's aid to the Bill and is not part of the law.

This Bill amends The Credit Unions and Caisses Populaires Act to change the oversight and governance framework for Manitoba's credit union system. The changes are necessary because the federal Office of the Superintendent of Financial Institutions no longer oversees provincial credit union centrals.

The credit union framework

Manitoba's credit union system consists of three tiers:

the credit unions and the caisse populaire, which are provincially regulated financial institutions;

the central, which acts as a clearing agent for credit unions and the caisse populaire and manages their liquidity; and

the guarantee corporation, which guarantees deposits in credit unions and the caisse populaire and acts as their prudential regulator.

The guarantee corporation is given significantly expanded oversight powers over credit unions, the caisse populaire and the central. In turn, the provincial Registrar of Credit Unions (the "registrar") is given significantly expanded oversight powers over the guarantee corporation.

Key changes to the oversight framework

The board of the guarantee corporation is appointed by the Lieutenant Governor in Council on the minister's recommendation, after consultation with the central and the caisse populaire. The Deputy Minister of Finance is a non-voting member of the board.

Subject to the registrar's approval, the guarantee corporation may make binding standards of sound business practice and prudential standards. Standards may address financial matters, such as capital and liquidity, as well as governance. Cabinet regulations no longer deal with those matters.

The guarantee corporation may issue directives and compliance orders to a credit union, the caisse populaire or the central. It may also subject any of them to a special audit or place them under supervision.

The central must pay an annual oversight fee to compensate the guarantee corporation for its oversight. Cabinet may cap this fee by regulation.

The central's by-laws are no longer approved by the registrar.

The registrar may issue compliance orders to the guarantee corporation and may temporarily act in place of the guarantee corporation.

Other changes

Consumer protection and the management of consumer complaints may be dealt with by regulation.

The registrar may charge a fee to review an application by a credit union, a caisse populaire or the central to continue in another jurisdiction.

Other amendments reflect the merger of the caisses populaires with La Fédération des Caisses Populaires du Manitoba.

(Assented to May 20, 2021)

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 adding the following definitions:

"directive" means a directive of the guarantee corporation issued under section 159.5 or 159.6; (« directive »)

"prudential standard" means a standard issued by the guarantee corporation under section 159.2; (« norme prudentielle »)

"regulation" means a regulation made under this Act; (« règlement »)

"standard of sound business practice" means a standard issued by the guarantee corporation under section 159.1; (« norme de pratique commerciale saine »)

(b) by replacing the definition "associate" with the following:

"associate" means a person who holds the rights of an associate in a credit union under the credit union's by-laws or under this Act; (« associé »)

(c) in the definition "affairs", by striking out "a central" and substituting "the central";

(d) in the definition "caisse populaire", by replacing clause (d) with the following:

(d) under the direction and democratic control primarily of French-speaking residents of Manitoba,

(e) in the definition "member",

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

(ii) by striking out "or central and" and substituting "or the central and", and

(iii) by striking out "a central" and substituting "the central";

(f) in the definition "officer", by striking out "central or guarantee corporation" and substituting "the central or the guarantee corporation";

(g) in the definition "Registrar", by striking out "section 226" and substituting "subsection 190.2(1)";

(h) in the definition "security interest", by striking out "property of a credit union, central or guarantee corporation" and substituting "property of a credit union, the central or the guarantee corporation";

(i) in the definitions "capital account", "creditor", "delegate", "deposit", "director", "patronage refund" and "subsidiary", by striking out "central" wherever it occurs and substituting "the central"; and

(j) by repealing the definitions "CCSM", "charter by-law", "Fédération" and "resident in Manitoba".

2(2)

Subsection 1(2.1) is replaced with the following:

Exceptions

1(2.1)

Subsection (2) does not apply to any of the following provisions:

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

(b) subsection 116(2);

(c) subsection 119(1.1);

(d) subsection 124(1.1);

(e) section 144.1;

(f) subsection 145.2(1);

(g) section 165;

(h) section 178;

(i) section 179;

(j) section 187;

(k) clause 227(2)(a).

3

Subsection 2(2) is amended by striking out everything after "such services" and substituting "primarily by French-speaking residents of Manitoba.".

4(1)

Clause 3(1)(c) is replaced with the following:

(c) the central; and

4(2)

Subsection 3(2) is amended by striking out "Part XI or XII" and substituting "Part XI, XII or XII.1".

5

Clause 6(4)(c) is replaced with the following:

(c) in respect of directors, officers and members of committees, their election or appointment, qualifications, powers and duties, terms of office, remuneration and removal and the filling of vacancies among them;

(c.1) in accordance with the regulations, the procedures for electing directors, officers and members of committees in person, by mail-in ballot or by electronic voting;

(c.2) the procedures and quorum at board meetings and committee meetings;

6

Subclause 7(a)(i) is amended by striking out "are residents of Manitoba and".

7

Section 8 is amended by striking out "section 228" and substituting "section 190.9".

8

Subsection 10(8) is amended by striking out "or" at the end of clause (a), striking out "and" at the end of clause (b) and replacing clause (c) with the following:

(c) the central; or

(d) the guarantee corporation.

9

Subsections 12(3) and (5) of the English version are amended by striking out "directive" and substituting "direction".

10

Subsection 20(8) is repealed.

11

Clause 32(1)(c) is amended by striking out "prescribed amount" and substituting "amount required under the standards of sound business practice".

12

Clause 37(a) is amended by striking out "or the regulations" and substituting ", the regulations or the standards of sound business practice".

13(1)

Subsection 42(1) is repealed.

13(2)

Subsection 42(1.1) is amended, in the part before clause (a), by striking out "loan policies and the regulations" and substituting "lending policies and the standards of sound business practice".

13(3)

Subsection 42(2) is amended by striking out "Subject to section 49, a credit union" and substituting "A credit union".

14

Sections 45 to 50 are repealed.

15

The following is added after subsection 53(2):

Exclusion re bond of association

53(3)

A credit union's bond of association does not apply to a person appointed to its board of directors under a by-law authorized by subsection 76(3).

16

Clause 54(4)(b) is amended by striking out "a director" and substituting "an elected director".

17

Subsection 58(5) is amended by adding ", the standards of sound business practice" after "the regulations".

18

Section 71 is replaced with the following:

Voting

71

In accordance with the regulations, a credit union may, by by-law, establish procedures to permit members to vote by a method other than show of hands or ballot.

19

The following is added after subsection 73(2):

Vote other than by show of hands or ballot

73(3)

A member's vote at a meeting by a method other than a show of hands or ballot, if authorized under the by-laws of a credit union, must be

(a) cast in accordance with the by-laws; and

(b) received before the close of voting on the matter at the meeting.

20

Subsection 76(2) is replaced with the following:

Number of elected directors

76(2)

A credit union's by-laws must establish the fixed number, or the minimum and maximum number, of directors to be elected by the members. The fixed or minimum number of elected directors must not be less than five.

Appointed directors

76(3)

A credit union's by-laws may provide for the appointment of additional directors by the board of directors. Such a by-law may be enacted, amended or repealed only by special resolution of the members.

Form and content of by-laws re appointed directors

76(4)

A by-law under subsection (3) must

(a) establish the number of directors that may be appointed, which must not exceed 1/4 of the total number of directors;

(b) specify if one or more appointed directors continue in office when, as the result of the death, resignation or removal of an elected director, the number of appointed directors exceeds 1/4 of the total number of directors then in office;

(c) establish the term for which directors may be appointed, which must not exceed three years;

(d) provide that an appointed director continues in office until a successor is appointed, unless the appointment is revoked; and

(e) provide that, when appointing directors, the board must have regard to the range of knowledge and experience it needs to discharge its responsibilities effectively.

21(1)

Subsection 77(1) is replaced with the following:

Persons who may be directors

77(1)

A person may be a director of a credit union if he or she

(a) is a resident of Canada who is at least 18 years of age;

(b) is a member of the credit union or, in the case of an appointed director who is not a member, becomes a member before the second board meeting after the date of the appointment; and

(c) satisfies the requirements set out in the by-laws of the credit union.

21(2)

Subsection 77(2) is amended

(a) in clause (b) of the English version, by replacing everything after "credit union" with ", the central or the guarantee corporation;";

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

(b.1) a person who, at any time within 12 months before being elected or appointed as a director, was an employee of the central or the guarantee corporation whose responsibilities included assessing or determining whether a credit union was in compliance with this Act, the regulations or the standards of sound business practice;

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

(e) an employee of the government whose official duties are concerned with the affairs of credit unions, or a person who was such an employee at any time within 12 months before becoming a director;

21(3)

Subsections 77(3) to (5) are repealed.

22(1)

Subsection 82(2) is repealed.

22(2)

Subsection 82(3) is replaced with the following:

Failure to elect directors

82(3)

If, at a meeting of members at which directors are to be elected, there is a failure to elect the directors necessary to constitute a board of the fixed or minimum number of directors, the directors must as soon as reasonably practicable call a meeting of members to fill the vacancy or vacancies. If they fail to call a meeting or if there are no directors then in office, the meeting may be called by any member.

22(3)

Subsection 82(4) is amended by adding "elected" before "directors".

22(4)

Subsection 82(5) is amended by adding "elected" before "directors".

23

Subsections 88(2) and (2.1) are amended by striking out "or the regulations," and substituting ", the regulations, the standards of sound business practice or a directive of the guarantee corporation,".

24

Clause 91(5)(d) is amended by striking out "and the regulations, the by-laws, and the loan policies" and substituting ", the standards of sound business practice, the by-laws and the lending policies".

25

Subsections 94(2) and (3) are replaced with the following:

Duty to comply

94(2)

Every director and officer of a credit union must comply with

(a) this Act and the regulations;

(b) the standards of sound business practice and any directive that applies to the credit union; and

(c) the articles and by-laws of the credit union.

No relief from duty to comply

94(3)

No provision in a contract or in the articles, the by-laws or a resolution of a credit union relieves a director or officer of a credit union from the duty to comply with, or liability for failure to comply with,

(a) this Act and the regulations; and

(b) the standards of sound business practice or any directive that applies to the credit union.

26

Subsections 116(1), 118(3) and 124(1) are amended by striking out "section 228" and substituting "section 190.9".

27

Section 124.1 is repealed.

28

The following provisions are amended by striking out "section 228" and substituting "section 190.9":

(a) subsection 128(5);

(b) subsection 128.1(4) in the part before clause (a).

29(1)

The following is added after subsection 128.4(1):

Costs of assessing application for approval

128.4(1.1)

 The Registrar and the guarantee corporation may charge a credit union that applies for approval under subsection (1) a reasonable amount to offset the costs of reviewing the application. The credit union must pay the amount charged at the time and in the manner specified by the Registrar and the guarantee corporation.

29(2)

Subsections 128.4(7) and (8) are amended by striking out "section 228" and substituting "section 190.9".

30

Subsections 132(6), 132(10) and 133(2) are amended by striking out "section 228" and substituting "section 190.9".

31(1)

Subsection 135(1) is amended

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

(b) in subclause (b)(iii), by striking out "and the regulations, or" and substituting ", the regulations and the standards of sound business practice; or"; and

(c) in the part after clause (c), by striking out "supervisor" and substituting "liquidator".

31(2)

Clause 135(3)(b) is amended

(a) in the part before subclause (i), by striking out "section 228" and substituting "section 190.9"; and

(b) in subclause (ii), by striking out "supervisor" and substituting "liquidator".

32

Subsection 140(1) is amended by striking out "section 228" and substituting "section 190.9".

33

Subsection 143(1) is amended by striking out "and" at the end of clause (b) and replacing clause (c) with the following:

(c) ensure that credit unions operate according to standards of sound business practice;

(d) ensure that the central operates according to prudential standards; and

(e) promote and otherwise contribute to the stability of and public confidence in the credit union system, the caisse populaire system and the central.

34

Section 144 is amended

(a) in clause (h), by striking out everything after "proper investments";

(b) by repealing clause (i);

(c) by replacing subclause (k)(ii) with the following:

(ii) by the central,

(d) in clause (m), by striking out "a credit union that" and substituting "the central or a credit union if it"; and

(e) by repealing clauses (o.1) and (o.2).

35

Section 145 is replaced with the following:

Board of the guarantee corporation

145(1)

The affairs of the guarantee corporation must be administered by a board consisting of

(a) not less than five and not more than seven members appointed by the Lieutenant Governor in Council on the recommendation of the minister; and

(b) the Deputy Minister of Finance, or his or her designate, as a non-voting member.

Consultation regarding appointments

145(2)

For the purpose of making recommendations under clause (1)(a), the minister must consult with the central and the caisse populaire.

Board expertise

145(3)

In appointing members of the board of the guarantee corporation, regard is to be had for the range of knowledge and expertise the board needs to discharge its responsibilities effectively.

Chair and vice-chair

145(4)

The Lieutenant Governor in Council must designate one of the appointed members of the board as the board chair and may designate another appointee as its vice-chair.

Function of the vice-chair

145(5)

The vice-chair has the authority of the chair when the chair is absent or unable to act, or when authorized by the chair.

36

Section 145.1 is amended by adding "appointed" before "members of the board".

37(1)

Subsection 147(2) is amended

(a) in clause (c), by striking out "the regulations" and substituting "the standards of sound business practice";

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

(c.1) a person who, at any time within 12 months before becoming a member of the board, was a director or officer of a credit union, the central or another entity described in clause (c);

(c) in clause (e),

(i) by striking out "reserve", and

(ii) by striking out "the regulations" and substituting "the standards of sound business practice";

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

(g) an employee of the government whose official duties are concerned with the affairs of the guarantee corporation, or a person who was such an employee at any time within 12 months before becoming a member of the board;

(e) by adding "or" at the end of clause (j), striking out "or" at the end of clause (k) and repealing clause (l).

37(2)

The following is added after subsection 147(2):

Non-application to ex officio member

147(3)

This section does not apply to a non-voting member of the board who holds office under clause 145(1)(b).

38

Sections 148 to 150 are replaced with the following:

Term of office

148(1)

A member of the board of the guarantee corporation must be appointed for a term of no more than three years, and no member may serve more than 10 consecutive years.

Terms to be staggered

148(2)

In appointing members of the board of the guarantee corporation, regard is to be had for the need to ensure that the terms of office of not more than half of the board members expire in any one year.

Appointment continues

148(3)

Subject to section 150, a member of the board of the guarantee corporation continues to hold office until the member is re-appointed, the appointment is revoked or a successor is appointed.

Vacancies

149

If at any time the number of appointed members of the board of the guarantee corporation is less than five, the Lieutenant Governor in Council must fill the vacancy.

Disqualification

150

An appointed member of the board of the guarantee corporation ceases to hold office if the member is disqualified from holding the office under section 147.

39

Section 152 is amended by adding "appointed" before "members".

40

Subsection 155.1(1) is amended by striking out "without delay" and substituting "within 120 days".

41

Section 155.2 is repealed.

42

Section 156 is amended by renumbering it as subsection 156(2) and adding the following as subsection 156(1):

Auditor to be appointed annually

156(1)

The guarantee corporation must appoint a person as its auditor annually.

43

The following is added before section 160:

OVERSIGHT OF CREDIT UNIONS AND THE CENTRAL

Standards of sound business practice

159.1(1)

With the approval of the Registrar, the guarantee corporation may issue standards of sound business practice that apply to credit unions.

Application to credit unions

159.1(2)

A standard of sound business practice may be general or specific and may apply to all credit unions or to one or more classes of credit unions.

Credit unions to comply

159.1(3)

A credit union must comply with a standard of sound business practice that applies to it.

Prudential standards

159.2(1)

With the approval of the Registrar, the guarantee corporation may issue prudential standards that apply to the central.

Central to comply

159.2(2)

The central must comply with a prudential standard.

Content of standards

159.3(1)

A standard of sound business practice or a prudential standard may relate to any of the following:

(a) capital reserves and the adequacy of such reserves;

(b) liquidity reserves, the adequacy of such reserves and the types of liquidity that are acceptable;

(c) the establishment of investment and lending policies and restrictions;

(d) pledging of securities;

(e) use of derivatives and disclosure requirements and management of risk respecting derivatives;

(f) asset liability management, including management of interest rate risk;

(g) management of operational risk;

(h) insurance and bonding requirements;

(i) management of regulatory compliance;

(j) stress-testing;

(k) corporate governance;

(l) strategic management;

(m) internal controls and internal auditing;

(n) outsourcing of business activities, functions and processes;

(o) accounting conventions with respect to financial instruments, as well as reporting and auditing standards;

(p) incorporating and investing in subsidiaries;

(q) any other matter that, in the opinion of the guarantee corporation, affects or is likely to affect

(i) the financial resilience of a credit union or the central, or

(ii) the ability of a credit union or the central to manage its business risks in a sustainable manner.

Conflict between standard and Act or regulations

159.3(2)

If a provision of a standard of sound business practice or a prudential standard conflicts with or is inconsistent with a provision of this Act or the regulations, the provision of this Act or the regulations prevails to the extent of the conflict or inconsistency.

Application of Statutes and Regulations Act

159.4

Part 6.1 of The Statutes and Regulations Act does not apply to a standard of sound business practice or a prudential standard.

Directives to credit unions

159.5(1)

The guarantee corporation may issue directives to a credit union

(a) respecting the capitalization or liquidity requirements to be followed by the credit union;

(b) requiring the credit union to increase its capitalization or liquidity beyond what is required under the standards of sound business practice;

(c) respecting the lending and investment practices to be followed by the credit union; or

(d) requiring the credit union to divest itself of a deposit, loan or investment that the guarantee corporation considers to involve an undue amount of risk for the credit union.

Service and filing of directive

159.5(2)

When issuing a directive to a credit union, the guarantee corporation must

(a) serve the directive on the credit union;

(b) send a copy of the directive to each director of the credit union; and

(c) file a copy of the directive with the Registrar.

Credit union to comply

159.5(3)

A credit union must comply with a directive that applies to it within the time required by the guarantee corporation, even if the directive conflicts with a standard of sound business practice.

Directives to central

159.6(1)

The guarantee corporation may issue directives to the central requiring the central to increase its capitalization or liquidity beyond what is required under the prudential standards.

Service and filing of directive

159.6(2)

When issuing a directive to the central, the guarantee corporation must

(a) serve the directive on the central;

(b) send a copy of the directive to each director of the central; and

(c) file a copy of the directive with the Registrar.

Central to comply

159.6(3)

The central must comply with a directive issued to it within the time required by the guarantee corporation.

Compliance orders to credit unions

159.7(1)

If the guarantee corporation is of the opinion that a credit union is not complying with this Act, the regulations, the standards of sound business practice or a directive issued under section 159.5, the guarantee corporation may order the credit union to comply or to cease any non-compliant act.

Compliance orders to central

159.7(2)

If the guarantee corporation is of the opinion that the central is not complying with this Act, the regulations, the prudential standards or a directive issued under section 159.6, the guarantee corporation may order the central to comply or to cease any non-compliant act.

Opportunity to be heard

159.7(3)

Subject to subsection (4), the guarantee corporation must not issue an order under this section without giving the affected credit union or the central, as the case may be, an opportunity to be heard.

Interim order

159.7(4)

If the guarantee corporation considers it to be in the public interest to do so, the guarantee corporation may issue an interim compliance order for a period not exceeding 15 days without giving the affected credit union or the central an opportunity to be heard.

44

The following is added after section 161:

Cost of overseeing central

161.1(1)

The guarantee corporation must, at the end of its fiscal year, determine the total costs it incurred during that fiscal year in connection with the oversight over the central provided by the guarantee corporation under this Act. The determination of the guarantee corporation is conclusive for the purpose of this section.

Payment of cost by central

161.1(2)

As compensation for the oversight provided by the guarantee corporation under this Act, the guarantee corporation may invoice the central for its costs determined under subsection (1). But the total amount invoiced in any year must not exceed the amount prescribed under the regulations, if any.

Interim invoices

161.1(3)

Instead of an annual invoice under subsection (2), the guarantee corporation may issue interim invoices to the central.

Central must pay invoice

161.1(4)

The central must pay an invoice of the guarantee corporation issued under subsection (2) or (3).

45

Subsection 162(1.1) is amended by striking out "and" at the end of clause (a) and replacing clause (b) with the following:

(b) the aggregate amount of remuneration paid to all board members;

(c) the aggregate amount paid to all board members as reimbursement for expenses incurred on guarantee corporation business; and

(d) the aggregate amount the guarantee corporation paid on behalf of its board members.

46

Section 163 of the English version is amended by striking out "a guarantee corporation's" and substituting "the guarantee corporation's".

47

Section 163.2 is repealed.

48

The heading for Part XII is replaced with "THE CENTRAL".

49

The centred heading "ROLE AND RESPONSIBILITIES" is added before section 164.

50(1)

Subsection 164(1) is amended by striking out "centrals" and substituting "the central".

50(2)

Subsections 164(2) and (3) are repealed.

51

Section 164.1 of the English version is amended, in the section heading, by striking out "CUCM" and substituting "The central".

52(1)

Section 165 is amended

(a) in clause (b), by striking out "a central" wherever it occurs and substituting "the central"; and

(b) in clause (e) of the English version, by striking out "caisses populaires" and substituting "the caisse populaire".

52(2)

Section 165 is further amended by renumbering it as subsection 165(1) and adding the following as subsection 165(2):

Liquidity reserves of caisse populaire

165(2)

In addition to the purposes set out in subsection (1), the central must receive and manage the liquidity reserves of the caisse populaire if requested to do so by the caisse populaire.

53

Subsection 166(1) of the French version is amended by striking out "est" and substituting "possède".

54(1)

Subsection 167(1) is repealed.

54(2)

Subsections 167(2) and (3) are amended by striking out "charter" wherever it occurs.

55

Section 168 of the English version is amended by striking out "Act" and substituting "Act,".

56

The centred heading "FINANCIAL MATTERS" is added after section 168.

57

Subsection 169(2) is amended

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

(b) by striking out "and associate members"; and

(c) by striking out "charter".

58

Section 170 is amended by striking out "and associate members".

59

Section 173 is amended by striking out "charter" wherever it occurs.

60(1)

Section 177 is amended by striking out "and subsections 46(2) and (3)".

60(2)

Section 177 is further amended by renumbering it as subsection 177(1) and adding the following as subsection 177(2):

Interpretation

177(2)

For the purpose of subsection (1), a reference to a standard of sound business practice is to be read as a reference to a prudential standard.

61

Section 177.1 is repealed.

62

The centred heading "MEMBERSHIP AND GOVERNANCE" is added before section 178.

63

Sections 179 and 180 are amended by striking out "charter" wherever it occurs.

64

Section 182 is replaced with the following:

Power to enact by-laws

182(1)

Subject to this Act and the articles of the central, the members of the central may enact, amend or repeal by-laws of the central at any annual meeting or general meeting called for that purpose.

Minimum content of by-laws

182(2)

The by-laws of the central must

(a) specify the qualifications, conditions and method of applying for and terminating associate membership;

(b) specify the location of meetings, how meetings are to be held and how quorum is to be determined;

(c) establish the procedure for calling an annual meeting, general meeting or special meeting;

(d) establish the procedure for enacting, amending or repealing by-laws;

(e) specify members' voting rights, including the right to vote in person, by mail-in ballot or electronic voting, and the manner and form of such votes;

(f) subject to section 187,

(i) establish the number of directors, which may be a fixed number or a minimum and a maximum number,

(ii) establish the manner in which directors are to be elected or appointed, their qualifications, powers and duties, terms of office, remuneration and removal and the filling of vacancies among them,

(iii) require any elected director to be a delegate of a credit union, and

(iv) if the by-laws allow for appointed directors,

(A) limit the number of positions that may be filled by appointed directors to 1/4 of the total number of directors,

(B) limit the term of appointed directors to three years, and

(C) require the board, in appointing directors, to have regard to the range of knowledge and experience required for the board to discharge its responsibilities effectively;

(g) establish, in respect of officers and members of committees of the central, the manner in which they are to be appointed, their qualifications, powers and duties, terms of office, remuneration and removal and the filling of vacancies among them;

(h) establish the procedure and quorum at board meetings;

(i) provide for the establishment, maintenance and relocation of a registered office of the central;

(j) establish the fiscal year of the central; and

(k) provide for all other matters required by this Act or the regulations to be dealt with in the by-laws of the central.

Enactment

182(3)

A by-law of the central may be enacted, amended or repealed

(a) by special resolution of the members of the central; or

(b) by a majority of the votes cast at a meeting of the members of the central, if written notice of the proposed enactment, amendment or repeal was provided to all members together with the meeting notice.

Effective date of by-laws

182(4)

The enactment, amendment or repeal of a by-law is effective on the day specified in the enactment, amendment or repeal, or on the day it is approved by the members of the central, whichever is later.

Copy to Registrar and guarantee corporation

182(5)

The central must provide a copy of any enactment, amendment or repeal of its by-laws to the Registrar and to the guarantee corporation within 30 days after the enactment, amendment or repeal is approved by the members of the central.

Conflict with Act, etc.

182(6)

A by-law of the central is of no force or effect to the extent that it is inconsistent with this Act, the regulations or the prudential standards, or with a directive that applies to the central.

65

Sections 183 and 184 are repealed.

66

Section 185 is amended by striking out "charter" in the section heading and in the section.

67

Subsection 186(1) is repealed.

68(1)

Subsection 187(1) is replaced with the following:

Who may be a director

187(1)

A person may be a director of the central if they

(a) are a resident of Canada who is at least 18 years of age; and

(b) are a delegate of a credit union, unless the by-laws of the central allow for appointed directors who are not delegates of a credit union.

68(2)

Subsection 187(2) is amended

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

(c) an employee of the government whose duties are concerned with the affairs of the central or of credit unions;

(c.1) a person who, at any time within 12 months of being elected or appointed as a director, was an employee described in clause (b) or an employee of the government described in clause (c); or

(b) in clause (d), by striking out "charter".

69

The following is added after subsection 188(2):

Interpretation

188(3)

For the purpose of subsection (1), a reference to a standard of sound business practice is to be read as a reference to a prudential standard.

70

Section 189 is repealed.

71

The centred heading "CONTINUANCE OUTSIDE MANITOBA" is added before section 190.1.

72(1)

Subsection 190.1(1) is amended, in the part before clause (a), by striking out "Credit Union Central of Manitoba Limited" and substituting "the central".

72(2)

Subsections 190.1(2) and (6) are amended by striking out "Credit Union Central of Manitoba Limited" and substituting "the central", with necessary grammatical changes.

72(3)

Subsection 190.1(7) is amended

(a) by striking out "Credit Union Central of Manitoba Limited" and substituting "the central"; and

(b) by striking out "section 228" and substituting "section 190.9".

72(4)

Subsection 190.1(8) is amended by striking out "section 228" and substituting "section 190.9".

72(5)

Subsections 190.1(9) to (11) are amended by striking out "Credit Union Central of Manitoba Limited" wherever it occurs and substituting "the central", with necessary grammatical changes.

73

The following is added after section 190.1:

PART XII.1

THE REGISTRAR

Appointment of Registrar

190.2(1)

The minister may appoint a Registrar and one or more Deputy Registrars to carry out the duties and exercise the powers of the Registrar under this Act and the regulations.

Duties

190.2(2)

The Registrar is generally responsible for overseeing compliance with this Act and the regulations so as to protect the public interest.

Advisories on interpretation

190.2(3)

The Registrar may issue advisories setting out the Registrar's position on how a provision of this Act, the regulations, the standards of sound business practice or the prudential standards is to be interpreted.

OVERSIGHT OF THE GUARANTEE CORPORATION

Compliance orders to guarantee corporation

190.3(1)

If the Registrar is of the opinion that the guarantee corporation is not complying with this Act or the regulations, the Registrar may order the guarantee corporation to comply or to cease any non-compliant act.

Opportunity to be heard

190.3(2)

Subject to subsection (3), the Registrar must not issue an order under this section without giving the guarantee corporation an opportunity to be heard.

Interim order

190.3(3)

If the Registrar considers it to be in the public interest to do so, the Registrar may issue an interim compliance order for a period not exceeding 15 days without giving the guarantee corporation an opportunity to be heard.

Registrar acting in place of guarantee corporation

190.4(1)

If the Registrar has made an order under section 190.3 and is of the opinion that the guarantee corporation has failed to comply with the order, then, in addition to any other remedy under this Act, the Registrar may, with prior notice to the guarantee corporation, exercise any power or perform any duty or function of the guarantee corporation under this Act.

Concurrent acting by guarantee corporation

190.4(2)

The guarantee corporation may continue to exercise a power or perform a duty or function that the Registrar is exercising or performing under subsection (1), but it must not do so in a manner that is contrary to or inconsistent with the Registrar.

Notice when Registrar no longer acting

190.4(3)

The Registrar must notify the guarantee corporation when the Registrar ceases to exercise a power or perform a duty or function of the guarantee corporation.

Oversight fee

190.5

Within 90 days after the end of each fiscal year of the guarantee corporation, the guarantee corporation must pay a prescribed oversight fee to the Registrar in respect of the oversight of the guarantee corporation provided by the Registrar under this Act.

INFORMATION AND FILINGS

Submitting information to Registrar

190.6

The Registrar may direct a credit union, the central or the guarantee corporation to prepare and submit such information or returns as the Registrar considers necessary in order to carry out his or her duties. The credit union, the central or the guarantee corporation must comply with the direction within the time specified in the direction.

74

The definition "complainant" in section 191 is amended

(a) in clause (b), by adding "the" before "central"; and

(b) in clause (c), by striking out "central or guarantee corporation" and substituting "the central or the guarantee corporation".

75(1)

Subsection 194(2) is amended, in the part before clause (a), by striking out "central or guarantee corporation" and substituting "the central or the guarantee corporation".

75(2)

Subsection 194(3.1) is replaced with the following:

Application of sections 213 to 217 to supervision order

194(3.1)

If an order is made under clause (3)(b), sections 213 to 217 apply, with necessary changes, to the supervision of the credit union or the central.

76

Subsection 195(1) of the English version is amended by adding "the" before "central".

77

Subsection 196(1) is amended, in the part before clause (a), by striking out "central or guarantee corporation" and substituting "the central or the guarantee corporation".

78

Section 199 is amended

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

(b) in the English version of clauses (a) and (b), by striking out "or";

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

(b.1) the standards of sound business practice or the prudential standards;

(b.2) a directive of the guarantee corporation;

(d) in clause (c) of the English version, by adding "the" before "central";

(e) in clause (d), by adding "or the guarantee corporation" after "Registrar"; and

(f) in the part after clause (d) of the English version, by adding "standard, directive," after "provision,".

79

Section 200 is amended

(a) by adding "or the guarantee corporation" after "The Registrar"; and

(b) by striking out "the Registrar's duties" and substituting "their respective duties".

80

Sections 201 and 202 are replaced with the following:

Appeal to court

201

A person directly affected by a decision of the Registrar or the guarantee corporation may appeal the decision to the court within 30 days after the decision is made.

Grounds of appeal

202(1)

An appeal under section 201 may be made only on questions of law or jurisdiction.

Remedies on appeal

202(2)

The court, after hearing an appeal under section 201, may do any of the following:

(a) affirm or reverse the decision;

(b) direct the Registrar or the guarantee corporation to make any other decision or order they are authorized to make under this Act;

(c) substitute its decision for that of the Registrar or the guarantee corporation.

81

Sections 203 and 204 are repealed.

82

The following is added as sections 204.1 and 204.2:

Examination of credit unions or the central

204.1(1)

The Registrar or the guarantee corporation, or a person designated by either of them, may

(a) inquire into and examine the business and affairs of any credit union or the central; and

(b) make inquiries of any person relating to

(i) any aspect of the business and affairs of a credit union or the central, and

(ii) the compliance of a credit union or the central with this Act, the regulations and any applicable standards of sound business practice, prudential standards, directives and by-laws.

Examination of the guarantee corporation

204.1(2)

The Registrar or a person designated by the Registrar may

(a) inquire into and examine the business and affairs of the guarantee corporation; and

(b) make inquiries of any person relating to

(i) any aspect of the business and affairs of the guarantee corporation, and

(ii) the compliance of the guarantee corporation with this Act and the regulations.

Access to records and documents

204.1(3)

A person conducting an examination under subsection (1) or (2)

(a) is entitled to access all records and documents of the entity being examined, wherever located, including information held by a provider of data processing services to the entity; and

(b) may, at any reasonable time, visit the entity's offices, inspect the premises and examine its business and affairs to determine whether it is complying with this Act, the regulations and any applicable standards of sound business practice, prudential standards, directives and by-laws.

Answering questions

204.1(4)

Every current or former director, board member, officer, employee or auditor of an entity being examined must answer such questions during the course of the examination as the examiner considers necessary to determine if the entity is complying with this Act, the regulations and any applicable by-laws, standards of sound business practice, prudential standards and directives.

Material to be furnished on examination

204.1(5)

For the purpose of an examination,

(a) the entity being examined must prepare and submit to the examiner such statements with respect to its business, finances or other affairs as the examiner requires; and

(b) the examiner may require a current or former director, board member, officer, employee or auditor of the entity to provide — and the person must provide — information and explanations, to the extent that the person is reasonably able to do so, in respect of the condition and affairs of the entity.

Copies

204.1(6)

If a record or document has been examined or produced under this section, the examiner may make, or cause to be made, one or more copies of it and, if necessary, may temporarily remove it for the purpose of making a copy of it.

Special audit of credit unions or the central

204.2(1)

The Registrar or the guarantee corporation may, with notice to each other, appoint a special auditor to make a special audit of a credit union or the central or examine any or all of the business and affairs of a credit union or the central.

Special audit of the guarantee corporation

204.2(2)

The Registrar may appoint a special auditor to make a special audit of the guarantee corporation or examine all or any of its business and affairs.

Audited to cooperate and pay cost of audit

204.2(3)

The entity being audited by a special auditor appointed under subsection (1) or (2) must cooperate with the auditor and pay for the audit.

83

Section 205 is amended, in the part before clause (a), by adding ", the guarantee corporation" after "Registrar".

84

Section 208 is amended

(a) in the part before clause (a), by striking out "a credit union or central" and substituting "a credit union or the central"; and

(b) by replacing clauses (a) and (b) with the following:

(a) if the action has not been brought, the Registrar or the guarantee corporation may, with notice to each other, bring and maintain the action; or

(b) if the action has been brought, the Registrar or the guarantee corporation may, with notice to each other, apply to the court to be added as a plaintiff and to be given conduct of the action;

85

Section 209 is amended

(a) in the part before clause (a),

(i) by striking out "Registrar" and substituting "guarantee corporation", and

(ii) by striking out "or the regulations," and substituting ", the regulations or the standards of sound business practice,";

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

(d.1) a credit union fails to comply with a directive of the guarantee corporation; or

(c) by replacing the part after clause (e) with the following:

the guarantee corporation may, with prior notice to the Registrar, give notice to the credit union that it is declared to be under the supervision of the guarantee corporation or a supervisor appointed by the guarantee corporation.

86

Section 210 is amended

(a) in the part before clause (a),

(i) by striking out "Registrar" and substituting "guarantee corporation", and

(ii) by striking out "or the regulations" and substituting ", the regulations or the prudential standards";

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

(c) the central is unable to carry out its duties respecting the management of liquidity reserves;

(c.1) the central fails to comply with a directive of the guarantee corporation; or

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

the guarantee corporation may, with prior notice to the Registrar, give notice to the central that it is declared to be under the supervision of the guarantee corporation or a supervisor appointed by the guarantee corporation.

87

Section 212 is repealed.

88

Section 213 is amended

(a) in the part before clause (a) of the English version, by striking out "a credit union or central" and substituting "a credit union or the central";

(b) by replacing clauses (a) and (b) with the following:

(a) the supervisor — if it is a person other than the guarantee corporation — applies to the guarantee corporation to have the credit union or the central released from supervision;

(b) it applies to the guarantee corporation — in writing, with reasons in support of the application and, if the supervisor is a person other than the guarantee corporation, with notice to the supervisor — to be released from supervision, and the guarantee corporation approves the application;

(c) in clause (c), by striking out "Registrar" and substituting "guarantee corporation"; and

(d) in clause (e) of the English version, by striking out "in the case of a credit union or central which" and substituting "if the credit union or the central".

89(1)

Subsection 214(1) is amended by replacing the part before clause (a) with the following:

Powers of supervisor

214(1)

Subject to any order of the court and, in the case of a supervisor other than the guarantee corporation, the approval of the guarantee corporation, if a credit union or the central has been placed under supervision, the supervisor may

89(2)

Subsection 214(3) of the English version is amended by adding "the" before "central".

90

Section 218 is repealed.

91

Subsections 219(3) to (5) of the English version are amended by striking out "a credit union or central" and substituting "a credit union or the central".

92

Section 220 is amended

(a) in the section heading, by striking out "a credit union" and substituting "credit union and central"; and

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

93

Subsection 222(1) is amended by striking out "section 226" and substituting "subsection 190.2(1)".

94

Section 223 is amended by striking out "a credit union or central" wherever it occurs and substituting "a credit union or the central".

95

The following is added as section 223.2:

Information is confidential

223.2

An individual or entity who, under this Act, obtains information, records or returns that are submitted in accordance with a request that is made or an obligation that is imposed under this Act must not disclose the information, records or returns to any individual or entity, unless the disclosure

(a) is made for the purpose of administering this Act, the regulations, the standards of sound business practice or the prudential standards;

(b) is made for the purpose of a prosecution; or

(c) is required by law.

96

Section 224 is repealed.

97

Section 225 is amended

(a) by renumbering it as section 190.8; and

(b) in subsection (3), by striking out "or central" wherever it occurs and substituting ", the central or the guarantee corporation".

98

Section 226 is repealed.

99

Section 227 is replaced with the following:

REGULATIONS

Regulations — operations of credit unions

227(1)

The Lieutenant Governor in Council may make regulations

(a) respecting the names of credit unions;

(b) respecting changes in the address or location of a credit union's registered office;

(c) respecting the establishment, relocation or closing of branch offices by a credit union;

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

(i) 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 procedures 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;

(e) respecting the procedures for electing directors, officers or members of committees, or for voting on any other matters, in person, by mail-in ballot or electronic voting;

(f) respecting the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to shares or classes of shares;

(g) prescribing restrictions on the businesses which may be carried on by a credit union;

(h) respecting the establishment of an audit committee of a credit union and prescribing its duties and governing its activities;

(i) respecting the establishment of a credit committee of a credit union and prescribing its duties and governing its activities;

(j) respecting unclaimed balances;

(k) prescribing an amount which may be paid upon the death of a member;

(l) respecting the protection of members and consumers in their dealings with credit unions, including regulating or restricting the representations that credit unions may make;

(m) establishing procedures credit unions must follow in dealing with complaints by members and consumers.

Regulations — central and guarantee corporation

227(2)

The Lieutenant Governor in Council may make regulations

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

(b) for the purpose of section 158, respecting the guarantee of deposits in credit unions;

(c) respecting the levies and special assessments to be paid by credit unions to the guarantee corporation under section 160 or 161;

(d) for the purpose of section 161.1, prescribing a maximum annual amount the guarantee corporation may invoice to the central;

(e) respecting additional matters required to be dealt with in the by-laws of the central;

(f) respecting the establishment of an audit committee of the central and prescribing its duties and governing its activities;

(g) respecting the establishment of a credit committee of the central and prescribing its duties and governing its activities.

Regulations — fees

227(3)

The Lieutenant Governor in Council may make regulations governing fees under this Act, including

(a) requiring the payment of fees in relation to any matter under this Act, including any services provided by or through the minister's department or the Registrar;

(b) prescribing the amount of a fee or the manner of determining the amount;

(c) respecting the payment of fees;

(d) authorizing the Registrar to waive the payment of a fee and prescribing the circumstances in which a fee may be waived.

Regulations — general

227(4)

The Lieutenant Governor in Council may make regulations

(a) prescribing the form and content of financial statements;

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

(c) prescribing rules for any exemptions permitted by this Act;

(d) prescribing any matter required or authorized by this Act to be prescribed;

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

Application of regulations

227(5)

A regulation made under this section may be general or particular in its application and may establish classes of credit unions and provide differently for different classes.

If fee not prescribed

227.1

If a fee is not otherwise prescribed, the minister may fix a fee to be paid in respect of any matter connected with the administration of this Act.

100

Section 228 is renumbered as section 190.9.

101(1)

Section 228.1 is amended, in clauses (a) and (b), by striking out "approve the form and content" and substituting "specify the form".

101(2)

Section 228.1 is further amended by renumbering it as section 190.7.

102

Section 229 is renumbered as section 190.10.

103

Section 230 is renumbered as section 190.11.

104(1)

Subsection 231(1) is amended by striking out everything after "credit union" and substituting "or the central, the central's by-laws, or any order or declaration of the Registrar, the guarantee corporation or the court filed with the Registrar.".

104(2)

Section 231 is further amended by renumbering it as section 223.1.

105(1)

Section 232 is amended

(a) in clause (2)(a), by striking out "subsection 231(2)" and substituting "subsection 223.1(2)"; and

(b) in subsection (3), by striking out "section 228" and substituting "section 190.9".

105(2)

Section 232 is further amended by renumbering it as section 190.12.

106

The centred heading "TRANSITIONAL MATTERS" is added before section 233.

107

The following provisions are amended by striking out "a credit union, central or guarantee corporation" and substituting "a credit union, the central or the guarantee corporation":

(a) subsection 233(2) in the part before clause (a);

(b) subsections 233(4) and (5).

108

Sections 236 and 237 are repealed.

109

The centred heading "REPEALS, C.C.S.M. REFERENCE AND COMING INTO FORCE" is added after section 237.

TRANSITIONAL

Directors of a credit union

110

Despite subsection 77(2) of The Credit Unions and Caisses Populaires Act as amended by subsection 21(2) of this Act, a person who is a director of a credit union on the day this section comes into force continues to hold office until their term expires, they resign or they are removed from office.

Board of the guarantee corporation

111

Despite section 145 of The Credit Unions and Caisses Populaires Act as enacted by section 35 of this Act, a person who is a member of the board of the guarantee corporation on the day this section comes into force continues to hold office until they resign, their appointment is revoked or a successor is appointed.

By-laws of the central

112

The by-laws of the central must address all of the matters required by section 182 of The Credit Unions and Caisses Populaires Act as enacted by section 64 of this Act within one year after the coming into force of this section, unless the Registrar grants a further extension.

Directors of the central

113

Despite subsection 187(2) of The Credit Unions and Caisses Populaires Act as amended by subsection 68(2) of this Act, a person who is a director of the central on the day this section comes into force continues to hold office until their term expires, they resign or they are removed from office.

Transition from regulations to standards

114

A standard of sound business practice or a prudential standard may create rules to govern the transition of a matter from a regulation made under section 227 of The Credit Unions and Caisses Populaires Act or from a provision of that Act as it read immediately before the coming into force of this section to that standard, including rules

(a) imposing a transitional period during which a credit union or the central is exempt from having to comply with a provision of the standard; and

(b) remedying any difficulty arising from the transition.

CONSEQUENTIAL AMENDMENTS

C.C.S.M. c. C152 amended

115

Subclause (c)(i) of the definition "financial institution" in subsection 1(1) of The Commodity Futures Act is amended by striking out "a central, credit union or caisse populaire" and substituting "the central, a credit union or a caisse populaire".

C.C.S.M. c. C223 amended

116

Subsection 5(2) of The Cooperatives Act is amended by adding "or a caisse populaire" after "a credit union".

C.C.S.M. c. C225 amended

117

Clause 3(2)(b) of The Corporations Act is amended

(a) by adding "or a caisse populaire" after "a credit union"; and

(b) by adding "and to caisses populaires" after "to credit unions".

C.C.S.M. c. I10 amended

118(1)

The Income Tax Act is amended by this section.

118(2)

Subsection 7(2) is amended, in the part before the formula, by striking out "a guarantee corporation" and substituting "the guarantee corporation".

118(3)

Subclause 7(3)(a)(i) is amended by striking out "a guarantee corporation" and substituting "the guarantee corporation".

C.C.S.M. c. M210 amended

119(1)

The Mortgage Brokers Act is amended by this section.

119(2)

Clause 3(1)(d) is replaced with the following:

(d) credit unions;

119(3)

Subsections 22(3) and 35(6) are amended by striking out everything after "means a bank" and substituting ", trust company or credit union.".

C.C.S.M. c. S50 amended

120

The definition "credit union" in subsection 1(1) of The Securities Act is replaced with the following:

"credit union" means a credit union or caisse populaire or the central, as those terms are defined in The Credit Unions and Caisses Populaires Act; (« caisse populaire »)

S.M. 2010, c. 20 (unproclaimed provision repealed)

121

Section 37 of The Credit Unions and Caisses Populaires Amendment Act, S.M. 2010, c. 20, is repealed insofar as it enacts section 163.1.

COMING INTO FORCE

Coming into force

122

This Act comes into force on a day to be fixed by proclamation.