The Credit Unions and Caisses Populaires Act
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C.C.S.M. c. C301

The Credit Unions and Caisses Populaires Act

(Assented to September 10, 1986)

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

PART I

INTERPRETATION AND APPLICATION

Definitions

1(1)

In this Act,

"affairs" means the relationship among a credit union or the central, their subsidiaries and their respective members, directors and officers, but does not include the business carried on by the credit union, central, or subsidiary; (« affaires internes »)

"articles" means the original or restated articles of incorporation, articles of amendment, articles of amalgamation, articles of reorganization, articles of dissolution, articles of revival and any amendments thereto; and includes any Act, statute or ordinance by or under which a body corporate has been incorporated, and any letters patent, supplementary letters patent, certificate of incorporation, memorandum of association, and any other document evidencing corporate existence; (« statuts »)

"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 »)

"auditor" includes a partnership of auditors; (« vérificateur »)

"board of directors" means the directors as a body; (« conseil d'administration »)

"body corporate" includes a credit union or other body corporate wheresoever or howsoever incorporated; (« personne morale »)

"bond of association" includes groups having a common bond of occupation or association, the residents within a well defined neighbourhood, community or rural or urban district, including a rural trading area, employees of a common employer or members of bona fide fraternal, religious, cooperative, labour, rural, educational and similar organizations, and members of the immediate family of such persons; (« lien d'association »)

"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 primarily of French-speaking 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 »)

"capital account" means the full amount of the consideration received by a credit union or the central for any shares issued; (« compte de capital »)

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

"common-law partner" of a person means a person, who not being married to the other person is cohabiting with him or her in a conjugal relationship of some permanence; (« conjoint de fait »)

"court" means the Court of King's Bench; (« tribunal »)

"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 »)

"creditor" means a person, other than a depositor, to whom a credit union or the central owes money and includes, as the context requires, the creditor's heirs, executors, administrators and assigns; (« créancier »)

"debt obligation" means a bond, debenture, note or other evidence of indebtedness or guarantee, whether secured or unsecured; (« titre de créance »)

"delegate" means an individual elected, in accordance with the by-laws, to represent a group of members at meetings of a credit union or the central; (« délégué »)

"deposit" means money placed in an account in a credit union or the central; (« dépôt »)

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

"director" means an individual who occupies the position of director, by whatever name called, of a credit union or the central; (« administrateur »)

"electronic meeting" means a meeting in which persons participate, or are entitled to participate, electronically; (Version anglaise seulement)

"electronically", in relation to participating in a meeting, means being connected by telephone or other electronic means in a manner that allows all participants to communicate with each other concurrently; (Version anglaise seulement)

"fully electronic meeting" means an electronic meeting at which persons who are entitled to participate must do so electronically; (Version anglaise seulement)

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

"guarantee fund" means those moneys collected and administered by the guarantee corporation for the purpose of protecting deposits in a credit union; (« fonds de garantie »)

"immediate family" means the spouse, common-law partner, son, daughter, brother, sister, parent, or grandparent of an individual; (« famille immédiate »)

"incorporator" means a person who signs articles of incorporation; (« fondateur »)

"individual" means a natural person; (« particulier »)

"member" means a person having rights through a membership interest in a credit union or the central in accordance with the provisions of this Act and the articles or by-laws of the credit union or the central and includes, as the context may require, a member's legal representative, an associate of a credit union and an associate member of the central; (« membre »)

"minister" means the member of the executive council charged by the Lieutenant Governor in Council with the administration of this Act; (« ministre »)

"officer" includes the president, vice-president and secretary of a credit union, the central or the guarantee corporation; (« dirigeant »)

"ordinary resolution" means a resolution passed by a majority of the votes cast by members or delegates who voted in respect of that resolution; (« résolution ordinaire »)

"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 »)

"patronage refund" means an amount that under this Act is allocated among and credited or paid by a credit union or the central to its members or associates, based upon the business done by each of them with or through the credit union or the central; (« ristourne »)

"person" includes an individual, partnership, association, body corporate, trustee, executor, administrator and legal representative; (« personne »)

"prescribed" means prescribed by the regulations; (« prescrit »)

"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 »)

"Registrar" means the Registrar appointed under subsection 190.2(1); (« registraire »)

"security" means a share or a debt obligation or a certificate evidencing a share or debt obligation; (« valeur mobilière »)

"security interest" means an interest in or charge upon property of a credit union, the central or the guarantee corporation taken by a creditor to secure payment of a debt or performance of any other obligation of the credit union, central or guarantee corporation, and includes a certificate evidencing a share or debt obligation; (« sûreté »)

"send" includes deliver;

"special resolution" means a resolution passed by a majority of not less than 2/3 of the votes cast by the persons who voted in respect of that resolution, or signed by all the persons entitled to vote on that resolution; (« résolution spéciale »)

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

"subsidiary" means a body corporate in which a credit union or the central has a majority of the voting shares. (« filiale »)

Interpretation

1(2)

For the purposes of this Act and the regulations,

(a) a reference in the English version to a credit union includes, unless the context otherwise requires, a caisse populaire; and

(b) a reference in the French version to a caisse populaire includes, unless the context otherwise requires, a credit union.

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

(c) section 144.1;

(d) subsection 145(2);

(e) sections 165, 178, 179 and 187;

(f) clause 227(2)(a).

Registered common-law relationship

1(3)

For the purposes of this Act, while they are cohabiting, persons who have registered their common-law relationship under section 13.1 of The Vital Statistics Act are deemed to be cohabiting in a conjugal relationship of some permanence.

S.M. 1994, c. 20, s. 4; S.M. 1996, c. 28, s. 2; S.M. 2002, c. 24, s. 16; S.M. 2002, c. 48, s. 28; S.M. 2004, c. 29, s. 2; S.M. 2010, c. 20, s. 2; S.M. 2021, c. 24, s. 2 (as amended by S.M. 2022, c. 24, s. 4); S.M. 2022, c. 4, s. 44.

Purpose of credit unions generally

2(1)

The purposes of credit unions are, on a cooperative basis, to provide a comprehensive range of financial services primarily for their members and to provide for the direction and democratic control of such services primarily by residents of Manitoba.

Purpose of caisses populaires generally

2(2)

The purposes of caisses populaires are, on a cooperative basis, to provide a comprehensive range of financial services in the French language primarily for their members and to provide for the direction and democratic control of such services primarily by French-speaking residents of Manitoba.

S.M. 2004, c. 29, s. 3; S.M. 2021, c. 24, s. 3.

Application of Act

3(1)

This Act, except where it is otherwise expressly provided, applies to

(a) every credit union incorporated or continued under this Act;

(b) every credit union heretofore incorporated under similar legislation of the province in force before the coming into force of this Act;

(c) the central; and

(d) the guarantee corporation.

Inconsistent provisions

3(2)

Where a provision of Part XI, XII or XII.1 is inconsistent with any other provision of this Act, the provision of that Part prevails.

S.M. 1996, c. 28, s. 3; S.M. 2010, c. 20, s. 3; S.M. 2021, c. 24, s. 4.

Objects of existing credit unions

4(1)

Where before the coming into force of this Act the words "and capable forthwith of exercising all the functions of a credit union, with powers and privileges and subject to the provisions and restrictions applicable thereto set forth in The Credit Unions Act, for the objects following, that is to say:" or words of like effect are contained in the articles of a credit union, those words are deemed to be struck out and the words "and capable forthwith of exercising all the functions of a credit union, subject to the provisions and restrictions applicable thereto, and the business of the credit union is restricted to the following:" are deemed to be substituted therefor.

Powers of existing credit unions

4(2)

Where the articles of a credit union excluded, immediately before the coming into force of this Act, any of the powers authorized by any former Act by or under which the credit union was incorporated, the articles are deemed to restrict the credit union from exercising the powers so excluded.

PART II

CREDIT UNIONS INCORPORATION

Incorporation of a credit union

5(1)

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.

Model forms

5(2)

The Registrar shall assist persons desirous of applying for incorporation under this Act, and shall prepare and make available model forms of articles for the use of credit unions.

S.M. 1996, c. 28, s. 4; S.M. 2004, c. 29, s. 4.

Articles of incorporation

6(1)

Articles of incorporation for a proposed credit union shall state

(a) the name of the credit union;

(b) the location in Manitoba where the registered office is to be situated;

(c) the name in full and the residence address, giving the street and number if any, of each first director;

(d) a statement of the proposed bond of association of the credit union, if any;

(e) the classes and any maximum number of shares that the credit union is authorized to issue other than common shares, if any, and if there will be two or more classes of shares, the rights, privileges, restrictions and conditions attaching to each class of shares;

(f) if the right to transfer shares of the credit union is to be restricted, a statement that the right to transfer shares is restricted and the nature of the restrictions;

(g) any restrictions on the business that the credit union may carry on;

(h) a statement indicating whether associate status is permitted; and

(i) all other matters which by this Act are required to be dealt with in the articles.

Additional provisions of articles

6(2)

The articles may in addition set out any provisions permitted by this Act to be set out in the by-laws.

Consent of first director

6(3)

The articles shall have attached thereto, in the prescribed form, the consent of a first director who is not an incorporator.

By-laws

6(4)

The by-laws shall provide for such of the following matters as are applicable but are not set out in the articles:

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

(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;

(b.3) the manner, form and effect of votes at members' meetings;

(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;

(d) the division of the territory in which the credit union carries on its business into districts for the purpose of holding district meetings, the business that may be conducted and the procedures to be followed at the meetings;

(e) the establishment of the fiscal year-end of the credit union which shall be on the last day of March, June, September or December in each year;

(f) [repealed] S.M. 1996, c. 28, s. 5;

(g) the holding of a referendum on any matter of general concern to the members; and

(h) all other matters which, by this Act, are required to be dealt with in the by-laws.

S.M. 1996, c. 28, s. 5; S.M. 2004, c. 29, s. 5; S.M. 2021, c. 24, s. 5.

Filing of articles

7

The Registrar may accept for filing and approval any articles sent under section 5 with respect to a proposed incorporation if

(a) the Registrar is satisfied that the incorporation is advisable and, without limiting the generality of the foregoing,

(i) the subscribers and proposed directors are qualified under this Act to establish and operate a credit union,

(ii) the proposed credit union will be organized and operated for the convenience and advantage of its members,

(iii) the proposed credit union will be organized and operated in a manner whereby the investments and deposits of members will be safeguarded without likelihood of claim upon the guarantee corporation, and

(iv) the proposed bond of association, if any, is not objectionable, and

(b) the articles are in compliance with the provisions of this Act;

(c) [repealed] S.M. 1996, c. 28, s. 6.

S.M. 1996, c. 28, s. 6; S.M. 2021, c. 24, s. 6.

Certificate of incorporation

8

Upon acceptance for filing and approval of the articles, the Registrar shall issue a certificate of incorporation in accordance with section 190.9.

S.M. 1996, c. 28, s. 7; S.M. 2021, c. 24, s. 7.

Effect of certificate

9

A credit union comes into existence on the date shown in the certificate of incorporation.

Name of credit union

10(1)

Every credit union that is part of the credit union system 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.

Name of caisse populaire

10(2)

Every caisse populaire that is part of the caisse populaire system 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.

Name in any language form

10(3)

Subject to subsections (1) and (2), and section 12, a credit union may set out its name in its articles in any language form and may be legally designated by that form.

Publication of name

10(4)

A credit union shall clearly identify itself and set out its name in legible characters in all contracts, invoices, negotiable instruments, orders for goods and services, advertising and all other representations to the public.

Other business names

10(5)

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

(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.".

Prohibited use of credit union designations

10(6)

No person other than a credit union shall use the words "credit union" or any derivative or abbreviation thereof as part of its name, or shall hold itself out as, or use part of its name or otherwise any word or abbreviation suggesting, indicating or implying that it is, or is carrying on business as, a credit union.

Prohibited use of caisse populaire designation

10(7)

No person other than a caisse populaire shall use the words "caisse populaire" or any derivative or abbreviation thereof as part of its name, or shall hold itself out as, or use part of its name or otherwise any word or abbreviation suggesting, indicating or implying that it is, or is carrying on business as, a caisse populaire.

Exception

10(8)

Subsections (6) and (7) do not apply to

(a) a body corporate incorporated by or under the authority of an Act of the Parliament of Canada;

(b) a credit union incorporated pursuant to the laws of any other province and which is authorized under this Act to carry on business in Manitoba;

(c) the central; or

(d) the guarantee corporation.

Registrar may permit use of prohibited name

10(9)

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.

S.M. 1987-88, c. 66. s. 6; S.M. 1994, c. 20, s. 4; S.M. 1996, c. 28, s. 8; S.M. 2004, c. 29, s. 6; S.M. 2010, c. 20, s. 4; S.M. 2021, c. 24, s. 8.

Reservation of name

11

The Registrar may, upon the request in writing of any person and upon payment of the prescribed fee, reserve a name for the use and benefit of the persons desiring to form a credit union for a period of 90 days if the name is not contrary to section 12.

Prohibited names

12(1)

A credit union shall not have a name

(a) that is known to the Registrar to be identical with the name of an existing or a dissolved credit union except as prescribed;

(b) that, subject to subsection (2), is known to the Registrar to be the same as the name of a business or association or other body corporate;

(c) that suggests or implies a connection with the Crown or any member of the Royal Family, or the Government of Canada, or the government of any province in Canada or any department, branch, bureau, service, agency or activity of that government, without the consent in writing of the appropriate authority; or

(d) that includes the word "Loan" or "Trust"; or

(e) that the Registrar, for any good and valid reason disapproves.

Name not to be similar to business, etc.

12(2)

A credit union shall not have a name that is similar to the name of any other business, association or body corporate if the use of that name by the credit union would, in the opinion of the Registrar, be likely to confuse or mislead, unless the business, association or body corporate consents in writing to its name being given in whole or in part to the credit union, and if required by the Registrar, the business, association or body corporate undertakes to dissolve or to change its name within 6 months after the incorporation of the credit union.

Undertaking not carried out

12(3)

Where a credit union is granted a name subject to an undertaking given under subsection (2) and the undertaking is not carried out within the specified time, the Registrar may direct the credit union to which the name is granted to change its name to a name that complies with this Act; and if the credit union fails to comply with the direction within 60 days of the service thereof, the Registrar may revoke the name of the credit union and assign to it a number and, until changed in accordance with section 114, the name of the credit union is the number so assigned.

Directing change of name

12(4)

Where a credit union

(a) comes into existence or is continued with a name; or

(b) upon an application to change its name, is granted a name;

that contravenes this section, the Registrar may direct that credit union to change its name.

Revoking a name

12(5)

Where a credit union is directed under subsection (4) to change its name and fails within 60 days from the service of the direction to change its name to a name that complies with this Act, the Registrar may revoke the name of the credit union and assign to it a number and, until changed in accordance with section 114, the name of the credit union is the number so assigned.

Change of name

12(6)

Where a credit union has had its name revoked and a number assigned to it under subsection (3) or (5), the Registrar shall issue a certificate of amendment showing the new name of the credit union and shall forthwith give notice of such change of name in the Manitoba Gazette.

S.M. 2021, c. 24, s. 9.

Personal liability under pre-incorporation contracts

13(1)

Except as provided in this section, a person who enters into a written contract in the name of or on behalf of a credit union before it comes into existence is personally bound by the contract and is entitled to the benefits thereof.

Adoption of pre-incorporation contracts

13(2)

A credit union may, within a reasonable time after it comes into existence, by any action or conduct signifying its intention to be bound thereby, adopt a written contract made before it came into existence in its name or on its behalf, and upon the adoption

(a) the credit union is bound by the contract and is entitled to the benefits thereof as if the credit union had been in existence at the date of the contract and had been a party thereto; and

(b) the person who purported to act in the name of or on behalf of the credit union ceases, except as provided in subsection (3), to be bound by or entitled to the benefits of the contract.

Application to court

13(3)

Except as provided in subsection (4), whether or not a written contract made before the coming into existence of a credit union is adopted by the credit union, a party to the contract may apply to the court for an order fixing obligations under the contract as joint and several or apportioning liability between or among the credit union and any person who purported to act in the name of or on behalf of the credit union, and upon the application the court may make any order it thinks fit.

Exemption from personal liability

13(4)

If expressly so provided in the written contract, a person who purported to act in the name of or on behalf of the credit union before it came into existence is not in any event bound by the contract or entitled to the benefits thereof.

PART III

CAPACITY AND POWERS

Capacity of a credit union

14(1)

A credit union has the capacity and, subject to this Act, the rights, powers and privileges of a natural person.

Extra-territorial capacity

14(2)

Subject to the approval of the Registrar, a credit union has the capacity to carry on its business, conduct its affairs and exercise its powers in any jurisdiction outside Manitoba to the extent that the laws of that jurisdiction permit.

Powers of a credit union

15(1)

Subject to this Act, it is not necessary for a by-law to be passed in order to confer any particular power on a credit union or its directors.

Restricted business or powers

15(2)

A credit union shall not carry on any business or exercise any power if it is restricted by its articles from carrying on that business or exercising that power, nor shall the credit union exercise any of its powers in a manner contrary to its articles.

Rights preserved

15(3)

No act of a credit union, including any transfer of property to or by a credit union, is invalid by reason only that the act or transfer is contrary to its articles or this Act.

No constructive notice

16(1)

Subject to subsection (2), no person is affected by or is deemed to have notice or knowledge of the contents of a document concerning a credit union by reason only that the document has been filed with the Registrar or is available for inspection at an office of the credit union.

Constructive notice of articles or by-laws

16(2)

A member of a credit union is deemed to have notice and knowledge of the contents of the articles and by-laws of the credit union.

S.M. 1996, c. 28, s. 9.

Reliance by persons dealing with credit union

17

A credit union or a guarantor of an obligation of the credit union may not assert against a person dealing with the credit union or with any person who has acquired rights from the credit union that

(a) the articles or by-laws have not been complied with; or

(b) the persons named in the most recent notice sent to the Registrar under this Act are not the directors of the credit union; or

(c) the place named in the most recent notice sent to the Registrar under this Act is not the registered office of the credit union; or

(d) a person held out by the credit union as a director and officer or agent of the credit union has not been duly appointed or has no authority to exercise the powers or perform the duties that are customary in the business of the credit union or usual for that director, officer or agent; or

(e) a document issued by any director, officer or agent of the credit union with actual or usual authority to issue the document is not valid or not genuine; or

(f) any financial assistance to members or directors or any sale, lease or exchange of all or substantially all of the property of the credit union was not authorized;

except where the person has or ought to have, by virtue of that person's position with or relation to the credit union, knowledge to the contrary.

S.M. 1996, c. 28, s. 10.

PART IV

REGISTERED OFFICE AND RECORDS

Registered office

18(1)

A credit union shall have its registered office in Manitoba. The registered office shall be at the location specified in its articles.

Change of address

18(2)

A credit union may change the address or location of its registered office within Manitoba as prescribed.

18(3)

[Repealed] S.M. 1996, c. 28, s. 11.

Annexation or amalgamation of municipalities

18(4)

Where the location of the registered office of a credit union is changed by reason only of the annexation or amalgamation of the location in which the registered office is situate to or with another municipality, that change does not constitute and is not deemed to constitute a change within the meaning of subsection (2).

Branch offices

18(5)

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

S.M. 1996, c. 28, s. 11; S.M. 2004, c. 29, s. 7; S.M. 2010, c. 20, s. 5.

Records

19(1)

A credit union shall prepare and maintain, at its registered office or subject to subsection (2) at any other place in Manitoba designated by the directors, records including

(a) the articles and the by-laws and all amendments thereto;

(b) the duly executed minutes of meetings and resolutions of members;

(c) a register of directors, officers and committee members setting out the names, addresses and other occupations, if any, of all persons who are or have been directors, officers or committee members of the credit union with the several dates on which each became or ceased to be a director, officer or committee member;

(d) a members register, and if applicable, an associates register, setting out the names and the latest known addresses of all members and associates;

(e) a shareholders register of holders of shares of a class other than common or surplus shares, setting out the names and the latest known addresses of the shareholders and the number of shares and other securities, if any, held by each;

(f) the accounting records and the duly executed minutes of meetings and resolutions of the directors and any committee thereof.

Exception

19(2)

Where a credit union, to the satisfaction of the Registrar,

(a) shows, the necessity of keeping any of the minutes, documents, registers, books of account and accounting records mentioned in subsection (1) at a place other than the registered office of the credit union; and

(b) gives assurance that those minutes, documents, registers, books of account and accounting records will at all reasonable times be open for inspection, at the registered office of the credit union or some other place in Manitoba approved by the Registrar, by any person who is entitled to inspect them and who applies to the credit union for an inspection thereof;

the Registrar may, by order, which may be subject to terms, permit the credit union to keep them at a place designated in the order other than the registered office.

Rescind order

19(3)

The Registrar for any good and valid reason may, by order which may be subject to terms, vary or rescind any order made under subsection (2).

Examination of records by members and creditors

20(1)

Members and creditors of a credit union, their agents and legal representatives, may examine the records referred to in clauses 19(1)(a), (b) and (c) during the usual business hours of the credit union, and may take extracts therefrom upon payment of a reasonable fee.

Members register

20(2)

Where the affidavit referred to in subsection (4) is sent to the credit union, members of a credit union, their agents and legal representatives may examine the records referred to in clause 19(1)(d) during the usual business hours of the credit union and may, upon payment of a reasonable fee, receive from the credit union a copy of the members register.

Shareholders register

20(3)

Where the affidavit referred to in subsection (4) is sent to the credit union, holders of shares of a class other than common or surplus shares, their agents and legal representatives may examine the records referred to in clause 19(1)(e) during the usual business hours of the credit union and may, upon payment of a reasonable fee, receive from the credit union a copy of the shareholders register.

Affidavit

20(4)

The affidavit required pursuant to subsection (2) or (3) shall

(a) state the name and address of the applicant;

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

(b) be made by a director or officer of the body corporate if the applicant is a body corporate; and

(c) state that the register will not be used by any person except in connection with matters relating to the affairs of the credit union.

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).

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.

Directors' right to examine records

20(7)

The directors of a credit union or the duly authorized representative of the board of directors may examine the records referred to in clause 19(1)(f) at all reasonable times at no charge.

20(8)

[Repealed] S.M. 2021, c. 24, s. 10.

S.M. 2010, c. 20, s. 6; S.M. 2021, c. 24, s. 10.

Form of records

21(1)

All registers and other records required by this Act to be prepared and maintained may be in a bound or loose-leaf form or in a photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

Precautions

21(2)

A credit union and its agents shall take reasonable precautions to

(a) prevent loss or destruction of;

(b) prevent falsification of entries in;

(c) facilitate detection and correction of inaccuracies in;

the registers and other records required by this Act to be prepared and maintained.

Corporate seal

22

An instrument or agreement executed on behalf of a credit union by a director, an officer or an agent of the credit union is not invalid merely because a corporate seal is not affixed thereto.

PART V

CAPITALIZATION AND
OPERATING STANDARDS

Common shares

23(1)

Common shares in a credit union shall have an issue price fixed by the articles, but the issue price shall not, in any event, be less than $5. each.

Number of common shares

23(2)

A credit union is not limited as to the number of common shares it may issue.

Common shares per member

23(3)

A member of a credit union shall purchase at least one fully paid common share.

S.M. 1996, c. 28, s. 12.

Transitional

24

Where a credit union is incorporated prior to the commencement of this Act, an issued share of the credit union is deemed, for purposes of this Act, to be a common share.

Shares other than common shares

25(1)

In addition to common shares, the articles of a credit union may provide for the issuance of more than one class of shares, including surplus shares, and if the articles so provide, there shall be set out therein the maximum number of shares in each class other than common and surplus shares that the credit union is entitled to issue, the total consideration to be paid for each such class of shares, and the rights, privileges, restrictions, conditions, including dividends, attached to the shares of each such class.

Priority

25(2)

Common shares shall rank behind all other classes of shares issued by the credit union and holders of common shares shall not, upon the winding-up or liquidation of a credit union, be entitled to redeem in whole or in part, any common shares until the amounts outstanding on all other classes of shares have been paid in full.

Restriction

25(3)

The Registrar may not permit a credit union to create a class of shares, other than common shares, if, in the opinion of the Registrar, the issuance of such shares would

(a) not be consistent with the objects of a credit union generally; or

(b) not be in the financial interests of the credit union; or

(c) increase the risk of a claim upon the guarantee corporation.

S.M. 1996, c. 28, s. 13.

No share certificates

26(1)

A credit union is not required to issue share certificates for common or surplus shares.

26(2)

[Repealed] S.M. 1996, c. 28, s. 14.

S.M. 1996, c. 28, s. 14.

Consideration

27(1)

A share shall not be issued until the consideration for the share is fully paid in money, or in property or past services that is not less in value than the fair equivalent of the money that the credit union would have received if the share had been issued for money.

Promissory note not consideration

27(2)

A credit union shall not issue a share if the proposed consideration for such share consists, in whole or in part, of a promissory note or a promise to pay.

Patronage refund

28(1)

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.

Member's share of patronage refund

28(1.1)

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.

Computation of business done

28(2)

The directors shall compute the amount of the business done by a member with a credit union in a fiscal year in relation to the services rendered

(a) by the credit union on behalf of or to the member; or

(b) by the member on behalf of or to the credit union;

with appropriate differences for the different classes, grades or qualities of the services.

Members' and associates' rates

28(3)

The rate that the directors fix for calculation of a member's share of a patronage refund must be equal to or greater than the rate fixed for associates.

S.M. 1996, c. 28, s. 15; S.M. 2004, c. 29, s. 8.

Use of patronage refund or dividend to purchase surplus shares

29(1)

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.

29(2) and (3)   [Repealed] S.M. 1996, c. 28, s. 16.

S.M. 1996, c. 28, s. 16; S.M. 2004, c. 29, s. 9.

Redemption

30(1)

A credit union shall not make any payment to purchase or redeem shares issued by it if there are reasonable grounds for believing that

(a) the credit union is, or would thereby be, unable to pay its liabilities as they become due; or

(b) the realizable value of the credit union's assets is, or would thereby be, less than the aggregate of

(i) its liabilities, and

(ii) the amount that would, at that time, be required to pay the holders of equity, that have a right to be paid, on a redemption, repayment or in a liquidation, rateably with or prior to the holders of the equity to be purchased, redeemed or repaid.

Restriction

30(2)

Subject to subsection (1), no shares issued by a credit union may be redeemed or purchased at a price exceeding the issue price.

S.M. 1996, c. 28, s. 17.

Dividends on common or surplus shares

31

Subject to subsection 32(1), a credit union may declare and pay such dividends upon its outstanding common or surplus shares as may be established by a resolution of the directors.

S.M. 1996, c. 28, s. 18.

Restriction

32(1)

A credit union shall not pay out a dividend on shares or pay out a patronage refund, if there are reasonable grounds for believing that

(a) the credit union is, or would thereby be, unable to pay its liabilities as they become due; or

(b) the realizable value of the credit union's assets is, or would thereby be, less than the aggregate of its liabilities and its capital other than retained earnings; or

(c) the capital of the credit union is, or would thereby be, less than the amount required under the standards of sound business practice.

Exception

32(2)

If, but for clause (1)(c), a credit union would be able to make any payments referred to in subsection (1), the guarantee corporation may authorize any payments referred to in that subsection on such terms and conditions as it considers appropriate.

S.M. 1996, c. 28, s. 19; S.M. 2010, c. 20, s. 7; S.M. 2021, c. 24, s. 11.

Limitation on holding of shares

33

Unless the by-laws of a credit union otherwise provide, no person shall hold more than 10% of the total number of issued shares of any class of the credit union's capital stock.

S.M. 1996, c. 28, s. 20.

34

[Repealed]

S.M. 1996, c. 28, s. 21.

Non voting shares

35(1)

All shares in a credit union shall be non-voting except in the case of a class vote as provided for in subsection (2).

Class vote

35(2)

The holders of shares of a class other than common or surplus shares are, unless the articles otherwise provide in the case of an amendment referred to in clauses (a), (b), and (e), entitled to vote separately as a class upon a proposal to amend the articles to

(a) increase or decrease any maximum number of authorized shares of the class, or increase any maximum number of authorized shares of any other class having rights or privileges equal or superior to the shares of that class; or

(b) effect an exchange, reclassification or cancellation of all or part of the shares of the class; or

(c) add, change or remove the rights, privileges, restrictions or conditions attached to the shares of the class and, without limiting the generality of the foregoing,

(i) remove or change prejudicially any rights to accrued dividends or rights to cumulative dividends, or

(ii) add, remove or change prejudicially any redemption rights, or

(iii) reduce or remove any dividend preference or liquidation preference, or

(iv) add, remove or change prejudicially any conversion privileges, options, voting, transfer or pre-emptive rights, or rights to acquire securities of a corporation, or sinking fund provisions; or

(d) increase the rights or privileges of any other class of shares having rights or privileges equal or superior to the shares of that class; or

(e) create a new class of shares equal or superior to the shares of that class; or

(f) make any class of shares having rights or privileges inferior to the shares of that class equal or superior to the shares of that class; or

(g) effect an exchange or create a right of exchange of all or part of the shares of another class into the shares of that class; or

(h) constrain the issue or transfer of the shares of the class or extend or remove the constraint.

Limit of liability

36

Subject to this Act, a member is not responsible for any act, default or liability whatsoever of the credit union or for any engagement, claim, payment, loss, injury, transaction, matter or thing whatsoever relating to or connected with the credit union.

Remedy preserved

37

Nothing in this Act curtails, abridges or defeats any remedy for the recovery

(a) from the borrower of money loaned by a credit union in contravention of this Act, the regulations or the standards of sound business practice; and

(b) from the member of any amount withdrawn in excess of the amount standing to the member's credit in its deposit accounts.

S.M. 2021, c. 24, s. 12.

38

[Repealed]

S.M. 1996, c. 28, s. 21.

Unclaimed balances

39

In the event that a deposit account contains less than a prescribed amount and no business has been transacted in connection with such account over a prescribed period, the credit union shall be entitled to deal with such account in a prescribed manner.

Members right to withdraw deposits

40(1)

A member shall be entitled to the balance remaining in any deposit account maintained by the member at the credit union together with any accrued interest at any time during normal business hours of the credit union.

Notice of intention to withdraw shares or deposits

40(2)

A credit union may, in its sole discretion, require up to 90 days notice in writing of a member's intention to withdraw deposits or to redeem any shares.

Extension of notice period

40(3)

The directors of a credit union may extend the notice period referred to in subsection (2) but shall inform the members in writing as to the actual notice period required.

Exception

40(4)

Subsections (2) and (3) do not apply in those circumstances where a member has placed deposits with a credit union for a stated term or in an account on which a bill of exchange payable on demand may be drawn.

Tied selling

40.1(1)

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.

Package offerings

40.1(2)

Despite subsection (1), a credit union may offer a product or service to members on more favourable terms if the member obtains it with another product or service than if the member obtains it alone.

S.M. 2004, c. 29, s. 10.

Trust funds

41(1)

Except where the credit union is itself the trustee, a credit union is not bound to see to the execution of any trust, whether express, implied or constructive, to which any share or deposits are subject, and where such an account is subject to a trust of which the credit union has notice, the cheque, bill of exchange, withdrawal slip, or receipt of the person

(a) in whose name the account stands; or

(b) who is according to the document creating the trust entitled to deal therewith;

is, notwithstanding any such trust, sufficient authorization and a valid and binding discharge of the credit union, and the credit union is not bound to see to the application of any money paid upon or with respect to any such cheque, bill of exchange, withdrawal slip or receipt.

Non-application of trust moneys

41(2)

Unless the instrument of trust permits, moneys on deposit in a credit union held by a trustee in trust for a named beneficiary, or otherwise, may not be charged to secure a loan or obligation.

Payment on death

41(3)

Where a member of a credit union dies and there is no executor of a will of the deceased member or administrator of the estate of the deceased member, the credit union may, upon receipt of an affidavit or such other proof of death or proof of claim as may be required by the credit union, pay a prescribed amount out of moneys standing to the credit of the deceased member to the person who appears to be entitled to the amount of the deceased member's interest and payment made under this section releases the credit union from any further liability with respect to the moneys so paid.

42(1)

[Repealed] S.M. 2021, c. 24, s. 13.

Loans

42(1.1)

A credit union may, in accordance with its lending policies and the standards of sound business practice,

(a) make loans to its members, including directors, officers and employees;

(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.

Right to repay

42(2)

A credit union may by by-law permit its members to repay loans, in whole or in part, on any day on which the office of the credit union is open for business.

S.M. 1996, c. 28, s. 22; S.M. 2004, c. 29, s. 11; S.M. 2010, c. 20, s. 8; S.M. 2021, c. 24, s. 13.

43

[Repealed]

S.M. 1996, c. 28, s. 23.

Lien on deposits and shares

44(1)

Notwithstanding anything in this Act to the contrary, a credit union has a lien on the deposits and shares of a member or other person to whose credit the deposits and shares stand in the records of the credit union together with interest or dividends thereon for any indebtedness due or accruing due to it by the member or other person or for any obligation in respect of the indebtedness, and the deposits and shares may not be withdrawn or redeemed unless the credit union consents.

Application of deposits and shares

44(2)

A credit union may apply the deposits and shares, and interest or dividends thereon on which it has a lien to any indebtedness in default or to any obligation in respect of the indebtedness without notice to any person, and the exercise of the lien by application of the deposits, shares, interest and dividends does not constitute a realization of a security interest within the meaning of any other Act.

Default

44(3)

For purposes of subsection (2) an indebtedness shall be deemed to be in default where:

(a) an amount of the principal or interest is not paid on the date upon which it becomes due and payable; or

(b) there has been a failure to observe or perform any obligation relating to the indebtedness.

45 to 47

[Repealed]

S.M. 2021, c. 24, s. 14.

48

[Repealed]

S.M. 1987-88, c. 66, s. 6; S.M. 1996, c. 28, s. 24; S.M. 2021, c. 24, s. 14.

49

[Repealed]

S.M. 2021, c. 24, s. 14.

50

[Repealed]

S.M. 1996, c. 28, s. 25; S.M. 2021, c. 24, s. 14.

Adjustments

51(1)

Where the returns required to be filed by a credit union disclose, or where the Registrar otherwise learns that the stated value of the assets of a credit union are greater than their realizable value, the Registrar may require the credit union to take such steps as the Registrar deems appropriate to ensure that the financial position of the credit union is accurately reflected in the records of the credit union.

Registrar prohibiting deposits or payments

51(2)

Where it appears to the Registrar that the realizable value of the assets of a credit union are less than the aggregate of its liabilities and its capital other than retained earnings and common shares, the Registrar may prohibit the credit union from taking deposits or making payments to its members, or the Registrar may limit those payments for such period as the Registrar considers necessary to protect the interest of the members, and the Registrar may take such other action as the Registrar considers necessary for the protection of or in the interest of the members.

S.M. 1996, c. 28, s. 26; S.M. 2010, c. 20, s. 9.

PART V.1

SECURITY ISSUES

Application of Securities Act

51.1

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.

S.M. 2004, c. 29, s. 12.

Application of sections 51.2 to 51.4

51.1.1

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

(iii) deposits in a credit union.

S.M. 1996, c. 28, s. 27; S.M. 2004, c. 29, s. 12.

Offering statement

51.2(1)

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.

Material changes

51.2(2)

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.

Revised offering statements — voluntary

51.2(3)

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.

Revised offering statements — mandatory

51.2(4)

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.

Shares must not be sold after material change

51.2(5)

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.

S.M. 1996, c. 28, s. 27; S.M. 2004, c. 29, s. 13.

Issue of receipts

51.3(1)

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.

Ruling

51.3(2)

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.

S.M. 1996, c. 28, s. 27; S.M. 2004, c. 29, s. 14.

Exception from application of sections 51.2 and 51.3

51.3.1

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.

S.M. 2004, c. 29, s. 14.

Registrar may stop issue or sale of shares

51.3.2(1)

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.

Notice of order

51.3.2(2)

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.

Opportunity to be heard

51.3.2(3)

The Registrar shall not make the order without first giving the credit union an opportunity to be heard about it.

Temporary order

51.3.2(4)

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.

S.M. 2004, c. 29, s. 14.

Obligation to provide offering statement

51.3.3(1)

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.

Cancellation of sale

51.3.3(2)

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

(ii) the time the purchaser receives the statements that subsection (1) requires the credit union to provide.

S.M. 2004, c. 29, s. 14.

Inspection of statement

51.4(1)

A copy of a statement for which the Registrar has issued a receipt under section 51.3 shall be open to inspection by any person

(a) at the offices of the Registrar; and

(b) during normal business hours, at the registered office of the credit union.

Extracts

51.4(2)

Any person may take extracts from any statement open to inspection under subsection (1).

S.M. 1996, c. 28, s. 27.

PART V.2

SHARE CERTIFICATES, MEMBERSHIPS
AND TRANSFERS

Personal estate

51.5

Shares in the capital stock of a credit union and memberships in a credit union are personal estate and are transferable in such manner and subject to such conditions and restrictions as are contained in this Act and the regulations and in the articles and by-laws of the credit union.

S.M. 1996, c. 28, s. 27.

Allotment of shares

51.6

Subject to this Act and in the absence of any provision to the contrary in the articles or by-laws of a credit union, shares in the capital stock of the credit union may be allotted at such times, in such manner and to such persons or class of persons as the directors may from time to time by resolution determine.

S.M. 1996, c. 28, s. 27.

Share certificates

51.7(1)

Subject to subsection (6), every shareholder of a credit union is, upon request and without payment, entitled to a certificate, signed by the proper officer or officers of the credit union, stating the number of shares held by him and the amount paid up thereon; but, in respect of a share or shares held jointly by two or more persons, the credit union is not bound to issue more than one certificate, and delivery of a certificate for a share to one of two or more joint shareholders is sufficient delivery to all.

Signatures

51.7(2)

A credit union may by by-law provide that the signatures of the officer or officers designated to sign share certificates may be engraved, lithographed or otherwise mechanically reproduced on the certificates, and in that event, subject to the by-law, share certificates so signed are deemed to have been manually signed by that officer or officers and are as valid to all intents and purposes as if they had been manually signed.

Certificates as evidence of title

51.7(3)

A share certificate is evidence of the title of the shareholder to the shares mentioned in it.

Particulars of issue on share certificate

51.7(4)

Where a credit union has more than one class of shares,

(a) the preferences, rights, conditions, restrictions, limitations or prohibitions attaching to any class of shares shall be stated in legible characters

(i) on every share certificate representing that class of shares, or

(ii) by a writing permanently attached to the share certificate; or

(b) there shall be inscribed on each share certificate representing a particular class of shares, in legible characters, a statement that there are preferences, rights, conditions, restrictions, limitations or prohibitions attached to the class of shares and that the full text thereof is obtainable on request and without fee from the secretary of the credit union.

Furnishing text of particulars

51.7(5)

Where the statement referred to in clause (4)(b) is inscribed on share certificates of a credit union, the secretary of the credit union shall furnish to any shareholder, on request and without fee, the full text of any preferences, rights, conditions, restrictions, limitations or prohibitions attached to the class of shares mentioned.

Waiver of share certificate

51.7(6)

The by-laws may provide that a credit union is not required to issue share certificates, and in that case

(a) the shareholders register kept by the credit union under clause 19(1)(e) is prima facie proof of the number of shares held by each shareholder; and

(b) the credit union shall, if requested in writing by a shareholder, provide a statement to the shareholder showing the shareholder's interest in the credit union.

S.M. 1996, c. 28, s. 27; S.M. 2004, c. 29, s. 16.

Transfers of shares or memberships

51.8

No transfer of a share or membership in a credit union is valid for any purpose

(a) unless a written application for membership by the transferee has been approved and the transfer has been authorized by a resolution of the directors of the credit union or by a person authorized by a resolution of the directors to approve applications and transfers of that kind; and

(b) until notification of any approval given under clause (a) has been sent to the transferee and the transferee's name has been entered on the members register;

save only as exhibiting the rights of the parties thereto towards each other.

S.M. 1996, c. 28, s. 27.

Dealings with registered holder

51.9(1)

Before the presentment for registration of the transfer of a share or other security in registered form, a credit union or a trustee under a trust indenture may treat as the absolute owner of the security the registered holder in whose name the security is registered in a members or securities register, as if that person had full legal capacity and authority to exercise all rights of ownership irrespective of

(a) any knowledge or notice to the contrary, except that obtained by virtue of documents demanded by the credit union or trustee; or

(b) any description in its records or on the security certificate indicating

(i) a pledge, a representative or a fiduciary relationship, or

(ii) a reference to any other instrument, or

(iii) the rights of any other person.

Constructive registered holder

51.9(2)

Notwithstanding subsection (1), a credit union shall treat a person as a registered holder entitled to exercise all the rights of the security holder he or she represents, if the person furnishes evidence satisfactory to the credit union that he or she is

(a) the executor, administrator, heir or legal representative of the heirs of the estate of a deceased registered holder; or

(b) a guardian, committee or trustee representing a registered holder who is an infant, an incompetent person or a missing person; or

(c) a liquidator of, or a trustee in bankruptcy for, a registered holder.

Permissible registered holder

51.9(3)

If a person upon whom the ownership of a security devolves by operation of law, other than a person described in subsection (2), furnishes proof of his or her authority to exercise rights or privileges in respect of a security of the credit union that is not registered in his or her name, the credit union shall treat the person as entitled to exercise those rights or privileges.

Immunity of credit union

51.9(4)

A credit union is not required to inquire into the existence of, or see to the performance or observance of, any duty owed to a third person by a registered holder of any of its securities or by anyone whom it treats, as permitted or required by this section, as the owner or registered holder thereof.

Infants

51.9(5)

If an infant exercises any rights of ownership in the securities of a credit union, no subsequent repudiation or avoidance of that exercise is effective against the credit union.

Joint holders

51.9(6)

A credit union may treat as the owners of a security the survivors of the joint holders of the security if it receives proof satisfactory to it of the death of any of the joint holders.

Transmission of securities

51.9(7)

Subject to any applicable law relating to the collection of taxes, a person referred to in clause (2)(a) is entitled to become a registered holder, or to designate a registered holder, if he or she deposits with the credit union or its transfer agent

(a) the original grant of probate or of letters of administration, or a copy thereof certified to be a true copy by

(i) the court that granted the probate or letters of administration, or

(ii) a trust company incorporated under the laws of Canada or a province, or

(iii) a lawyer or notary acting on behalf of the person; or

(b) in the case of transmission by notarial will in the Province of Quebec, a copy authenticated pursuant to the laws of that Province;

together with

(c) an affidavit or declaration of transmission made by the person, stating particulars of the transmission; and

(d) the security certificate that was owned by the deceased holder, endorsed by the person and accompanied by any assurance the credit union may require that the endorsement is genuine and effective.

Excepted transmissions

51.9(8)

Notwithstanding subsection (7), if the laws of the jurisdiction governing the transmission of a security of a deceased holder do not require a grant of probate or of letters of administration in respect of the transmission, the legal representative of the deceased holder is entitled, subject to any applicable law relating to the collection of taxes, to become a registered holder or to designate a registered holder if he or she deposits with the credit union or its transfer agent

(a) the security certificate that was owned by the deceased holder; and

(b) reasonable proof of the governing laws, of the interest of the deceased holder in the security and of the right of the legal representative or the person he or she designates to become the registered holder.

Right of credit union

51.9(9)

Deposit of the documents required by subsection (7) or (8) empowers a credit union or its transfer agent to record in a members or shareholders securities register the transmission of a security from the deceased holder to a person referred to in clause (2)(a) or to such person as the person referred to in that clause may designate and, thereafter, to treat the person who thus becomes a registered holder as the owner of that security.

S.M. 1996, c. 28, s. 27.

PART VI

MEMBERSHIP

Members

52(1)

The membership of a credit union consists of its incorporators and those persons whose applications for membership are accepted by the directors, or by a person the directors authorize to approve applications, in accordance with the provisions of this Act, the regulations, the articles and by-laws of the credit union.

Refusal of membership application

52(2)

The directors of a credit union may refuse to approve any application for membership where they are satisfied that it is not in the interest of the credit union to approve such application.

Persons under 18

52(3)

A person under 18 years of age may be accepted as a member of a credit union and shares may be held and moneys received by the credit union in that person's name or in the name of a trustee for that person, if the trustee is a member or is eligible to be a member of the credit union.

Restriction

52(4)

No credit union may be a member of another credit union or caisse populaire.

S.M. 1996, c. 28, s. 28; S.M. 2004, c. 29, s. 17.

Common bond

53(1)

The articles of a credit union may provide that membership in the credit union shall be limited to groups having a bond of association.

Leaving bond of association

53(2)

Where the articles of a credit union contain a provision under subsection (1), any member of the credit union who leaves the bond of association may nevertheless retain membership in the credit union and all the rights and privileges of a member.

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).

S.M. 2021, c. 24, s. 15.

Associates

54(1)

A credit union shall not permit a person to become an associate unless its articles permit it to have associates and it has enacted a by-law under clause 6(4)(a).

Number of associates

54(2)

At no time shall the number of associates exceed 1/4 of the number of members of the credit union.

Restriction

54(3)

No credit union may be an associate of another credit union.

Rights of associate

54(4)

Subject to this Act, an associate of a credit union shall have all the rights and privileges, and shall be subject to all of the obligations of a member of a credit union, except that an associate shall not

(a) vote at any meeting of members; and

(b) become an officer or an elected director of a credit union.

S.M. 1996, c. 28, s. 29; S.M. 2004, c. 29, s. 18; S.M. 2021, c. 24, s. 16.

Termination of membership

55(1)

Unless the by-laws otherwise provide, the directors by a resolution passed by a majority of not less than 3/4 of the directors at a meeting called to consider the resolution, may terminate the membership of a member.

Notice to member

55(2)

The member whose membership is proposed to be terminated by a resolution of the directors under subsection (1) is entitled to at least 7 days notice of the meeting at which the resolution is to be considered, together with a statement of the grounds upon which the membership is proposed to be terminated, and is entitled to appear, either personally, or by or with an agent or counsel, to make submissions at the meeting.

Notice of termination

55(3)

Within 7 days after the date on which the resolution referred to in subsection (1) is passed by the requisite majority, the credit union shall, in the same manner as that provided for the giving of notice of a meeting of members, notify the person whose membership was terminated of the resolution.

Appeal to meeting of members

55(4)

A person whose membership is terminated under subsection (1) may appeal the decision of the directors at the next meeting of members by sending a notice of appeal to the credit union within 14 days after the date when notice was given under subsection (3).

No right of appeal under subsection (4)

55(4.1)

Subsection (4) does not apply to a person whose membership is terminated under subsection (1) if the grounds for termination include causing financial loss to a credit union through fraud or by

(a) issuing illegal negotiable instruments; or

(b) breaching a term or condition of an agreement for the use of electronic services provided by the credit union.

Decision of meeting

55(5)

The meeting of members to which an appeal under subsection (4) is brought shall, by a majority vote, either confirm or set aside the resolution of the directors terminating the membership of a member.

Termination by meeting of members

55(6)

A meeting of members may, by special resolution, terminate the membership of a member.

55(7) and (8)   [Repealed] S.M. 1996, c. 28, s. 30.

Membership continues

55(9)

A person who in accordance with subsection (4) appeals a termination of membership shall, notwithstanding the resolution terminating membership, continue to be a member of the credit union until the termination is confirmed by the meeting of members under subsection (5).

Re-admittance

55(10)

A person whose membership is terminated upon an appeal to, or by special resolution of, a general meeting in accordance with this section shall not again be admitted to membership in the credit union except by special resolution of a general meeting.

Non application

55(11)

This section does not apply to associates.

55(12)

[Renumbered as section 55.1]

Suspension of services to member

55.1

A credit union may at any time suspend its services to a member who has caused financial loss to the credit union through fraud or by

(a) issuing illegal negotiable instruments; or

(b) breaching a term or condition of an agreement for the use of electronic services provided by the credit union.

S.M. 1996, c. 28, s. 30; S.M. 2004, c. 29, s. 19.

Withdrawal

56(1)

A member may withdraw from a credit union on such terms and conditions as this Act, the articles or the by-laws of the credit union may provide.

Terms on withdrawal or termination

56(2)

No provisions in respect of terminated or withdrawing members shall affect the provisions of any contract between a terminated or withdrawing member and the credit union, and without restricting the generality of the foregoing, shall not affect the term for which any person has agreed to place deposits with the credit union.

S.M. 1996, c. 28, s. 31.

Remedy preserved

57

Withdrawal from or termination of membership in a credit union does not release a person from any liability to the credit union.

Power to enact by-laws

58(1)

The members of a credit union may, subject to this Act and the articles of the credit union, at any annual meeting or general meeting called for the purpose, enact, amend, or repeal by-laws in respect of those matters authorized or required by any provision of this Act.

Enactment

58(2)

Any by-law may be enacted, amended or repealed by the members of a credit union

(a) if approved by special resolution of the members; or

(b) if written notice of the proposed enactment, amendment or repeal is forwarded to each member of the credit union with the notice of the meeting at which the enactment, amendment or repeal is to be considered, by a majority of the votes cast at the meeting.

58(3)

[Repealed] S.M. 1996, c. 28, s. 32.

Effective date of by-laws

58(4)

The enactment, amendment or repeal of a by-law is effective on, from and after the date of the members' approval.

Copy of by-laws to Registrar

58(4.1)

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

(c) a notice of the repeal of any of its by-laws to the Registrar within 30 days after the repeal.

Registrar's order re by-law

58(5)

The Registrar may order a credit union to enact a by-law consistent with, or to amend or repeal a by-law that is inconsistent with, the provisions of this Act, the regulations, the standards of sound business practice or the credit union's articles or other provisions of the credit union's by-laws, and the credit union shall enact, amend or repeal the by-law accordingly.

58(6)

[Repealed] S.M. 1996, c. 28, s. 32.

S.M. 1996, c. 28, s. 32; S.M. 2004, c. 29, s. 20; S.M. 2021, c. 24, s. 17.

Members bound by articles and by-laws

59

The articles and by-laws of a credit union bind the credit union and its members.

S.M. 1996, c. 28, s. 31.

Place of meetings

60(1)

Meetings of the members of a credit union shall be held at the place within Manitoba provided in the by-laws or, in the absence of that provision, at the place within Manitoba that the directors may determine.

Electronic meetings

60(2)

Unless prohibited by a credit union's articles or by-laws, a meeting of members may be held as an electronic meeting. Such a meeting must be conducted in accordance with the regulations, if any.

Presence

60(3)

A member of a credit union participating electronically in a meeting of members is deemed to be present at the meeting.

Fully electronic meetings

60(4)

Subsection (1) does not apply to a fully electronic meeting.

S.M. 1996, c. 28, s. 31; S.M. 2022, c. 4, s. 45.

Calling meetings

61

The directors of a credit union

(a) shall call an annual meeting of members which shall be held within 4 months after the fiscal year end of the credit union to consider the annual report of the directors, the financial statements, and the auditor's report, to appoint the auditor, to elect directors and such other matters as may properly come before the meeting; and

(b) may at any time call a special meeting of members.

Record date

62

The record date for determining which members are entitled to receive notice of a meeting of members shall be at the close of business on the day immediately preceding the day on which the notice is given.

Notice of meeting

63(1)

Notice of the time and place of a meeting of members shall be given in accordance with the provisions of the by-laws or, in the absence of those provisions, shall be given not less than 14 days nor more than 50 days before the meeting to each member entitled to vote at the meeting, and to the auditor of the credit union.

Adjournment

63(2)

Where a meeting of members is adjourned for seven days or less, it is not necessary, unless the by-laws otherwise provide, to give notice of the adjourned meeting other than by announcement at the earliest meeting that is adjourned.

Notice of adjourned meeting

63(3)

Where a meeting of members is adjourned by one or more adjournments for more than 7 days, notice of the adjourned meeting shall be given in the same way as for an original meeting.

Business

63(4)

All business transacted

(a) at a special meeting of members; or

(b) at an annual meeting of members, except consideration of the annual report of the directors, the financial statements, the auditor's report, the election of directors, the reappointment of the incumbent auditor and any other business authorized by the by-laws to be transacted at an annual meeting;

is deemed to be special business.

Notice of business

63(5)

The notice of a meeting of members at which special business is to be transacted shall include

(a) a statement of the nature of the business, in sufficient detail to permit the member receiving the notice to form a reasoned judgment thereon; and

(b) the text of any special resolution to be submitted to the meeting or, if the full text is too lengthy for convenient inclusion in the notice, a summary thereof.

Fully electronic meetings

63(6)

A requirement in this section to provide notice of the place of a meeting does not apply to a fully electronic meeting.

S.M. 1996, c. 28, s. 33; S.M. 2004, c. 29, s. 21; S.M. 2022, c. 4, s. 46.

Waiver of notice

64

A member or any other person entitled to attend a meeting of members may in any manner waive notice of the meeting, and the attendance of the member or other person at the meeting is itself a waiver of notice of the meeting, except where that person attends for the express purpose of objecting to the transaction of any business on the ground that the meeting was not lawfully called.

Member proposal

65(1)

A member entitled to vote at a meeting of members may

(a) submit to the credit union notice of any matter that the member proposes to raise at the meeting (hereinafter referred to as a "proposal"); and

(b) discuss at the meeting any matter in respect of which the member would have been entitled to submit a proposal.

Notice of proposal

65(2)

A credit union shall set out any proposal in the notice of the meeting at which the proposal is to be presented.

Supporting statement

65(3)

If so requested by a member submitting a proposal, the credit union shall include in the notice or attach thereto a statement by the member, of not more than 200 words, in support of the proposal, and the name and address of the member.

Nominations for directors

65(4)

A proposal may include nominations for the election of directors provided that the election of those nominated as directors would conform to the provisions of this Act, the articles and by-laws of the credit union, but this subsection does not prevent nominations being made at any meeting of members.

Non-compliance

65(5)

A credit union is not required to comply with subsections (2) and (3) if

(a) the proposal is not submitted to the credit union at least 90 days before the first anniversary date of the previous annual meeting of members; or

(b) it clearly appears that the proposal is submitted by the member primarily for the purpose of enforcing a personal claim or redressing a personal grievance against the credit union or its directors, officers, members or other security holders, or primarily for the purpose of promoting general economic, political, racial, religious, social or similar causes; or

(c) the credit union, at the member's request, included a proposal in the notice of meeting of members held within 2 years preceding the receipt of the submission under subsection (1), and the member failed to present the proposal at that meeting; or

(d) substantially the same proposal was submitted to the members in the notice of a meeting of members held within 2 years preceding the receipt of the member's request, and the proposal was defeated; or

(e) the rights conferred by this section are being abused to secure publicity.

Immunity

65(6)

No credit union or person acting on its behalf incurs any liability by reason only of circulating a proposal or statement in compliance with this section.

Notice of refusal

65(7)

Where a credit union refuses to include a proposal in a notice of meeting, the credit union shall within 10 days after receiving the proposal notify the member submitting the proposal of its intention to omit the proposal from the notice and send to the member a statement of the reasons for the refusal.

Member application to court

65(8)

Upon the application of a member claiming to be aggrieved by a refusal under subsection (7), the court may restrain the holding of the meeting to which the proposal is sought to be presented and make any further order it thinks fit.

Credit union application to court

65(9)

The credit union or any person claiming to be aggrieved by a proposal may apply to the court for an order permitting the credit union to omit the proposal from the notice of meeting, and the court, if it is satisfied that subsection (5) applies, may make the order.

Registrar entitled to notice

65(10)

An applicant under subsection (8) or (9) shall give the Registrar notice of the application, and the Registrar is entitled to appear and be heard in person or by counsel.

S.M. 1996, c. 28, s. 34.

Quorum

66(1)

Unless its by-laws otherwise provide, the quorum for members' meetings of a credit union is the number of members that is five more than the number of its directors.

Opening quorum sufficient

66(2)

If a quorum is present at the opening of a meeting of members, the members present may, unless the by-laws otherwise provide, proceed with the business of the meeting, notwithstanding that a quorum is not present throughout the meeting.

Adjournment

66(3)

If a quorum is not present at the opening of a meeting of members, the members present may adjourn the meeting to a fixed time and place but may not transact any other business.

Non application

66(4)

This section does not apply to associates.

Fully electronic meetings

66(5)

The requirement in subsection (3) to adjourn to a fixed place does not apply to a fully electronic meeting.

S.M. 1996, c. 28, s. 31; S.M. 2004, c. 29, s. 22; S.M. 2022, c. 4, s. 47.

Voting eligibility

67(1)

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.

One member one vote

67(2)

Subject to subsection (1) and subsection 35(2), a member of a credit union has only one vote on a matter that is submitted to the members for a decision.

S.M. 2004, c. 29, s. 23.

Representatives of corporations

68(1)

Where a body corporate or association is a member of a credit union, the credit union shall recognize an individual authorized by resolution of the directors or governing body of the body corporate or association to represent it at meetings of members of the credit union.

Powers of representative

68(2)

An individual authorized under subsection (1) may exercise, on behalf of the body corporate or association referred to in that subsection, all the powers the body corporate or association could exercise if it were an individual member.

Proxy

69(1)

Unless the by-laws otherwise provide, no member, other than a member that is a body corporate or association, shall vote by proxy at any meeting of members of a credit union.

Limitations on proxies and representation

69(2)

Where the by-laws provide for voting by proxy, no person other than a member of a credit union may be appointed proxy, and

(a) no member may vote more than one proxy;

(b) no member may represent more than one body corporate or association; and

(c) no member may both vote a proxy and represent a body corporate or association;

at a meeting of members of a credit union.

Non application

69(3)

This section does not apply to associates.

S.M. 1996, c. 28, s. 31.

Joint membership

70

A credit union may, in its by-laws, provide that 2 or more individuals may jointly hold a membership in a credit union but that membership is entitled to one vote only.

S.M. 1996, c. 28, s. 31.

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.

S.M. 1996, c. 28, s. 35; S.M. 2004, c. 29, s. 24; S.M. 2021, c. 24, s. 18.

Electronic voting

71.1

If a meeting of members of a credit union is held as an electronic meeting, the meeting must be held in a manner that allows for electronic voting and reasonable steps must be taken to ensure that

(a) the identity of each person who votes is verified;

(b) each person who votes does so only in their own right or by valid proxy; and

(c) if a ballot is demanded, the vote is conducted in a manner that allows votes to be individually counted.

S.M. 2022, c. 4, s. 48.

Executors and administrators

72

Every executor or administrator holding a membership or share in the credit union in the capacity of executor or administrator shall represent that membership or share at meetings of the credit union and may vote as a member or shareholder.

Method of voting

73(1)

Subject to section 71.1, any regulations respecting electronic meetings and the by-laws of a credit union, voting at a meeting of members shall be by show of hands, except where a ballot is demanded by a member entitled to vote at the meeting.

Time for demanding ballot

73(2)

A member may demand a ballot either before or after any vote by show of hands, and the result of the ballot shall be the decision of the members.

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.

S.M. 1996, c. 28, s. 31; S.M. 2021, c. 24, s. 19; S.M. 2022, c. 4, s. 49.

Members calling meetings

74(1)

Twenty-five members who have the right to vote at a meeting sought to be held or such other number of members or percentage of members as the by-laws may provide, may, by written requisition, require the directors to call a special meeting of members for the purposes stated in the requisition.

Form of requisition

74(2)

The requisition referred to in subsection (1) may consist of several documents of like form each signed by one or more members, and shall state the business to be transacted at the meeting and shall be sent to the registered office of the credit union.

Directors calling meeting

74(3)

Upon receiving the requisition referred to in subsection (1), the directors shall call a meeting of members to transact the business stated in the requisition, unless the business of the meeting as stated in the requisition includes a matter described in clauses 65(5)(b) to (e).

Member calling meeting

74(4)

If the directors do not within 30 days after receiving the requisition referred to in subsection (1) call a meeting, any member who signed the requisition may call the meeting.

Procedure

74(5)

A meeting called under this section shall be called as nearly as possible in the manner in which meetings are to be called pursuant to this Act and the by-laws.

Reimbursement

74(6)

Unless the members otherwise resolve at a meeting called under subsection (4), the credit union shall reimburse the members for the expenses reasonably incurred by them in requisitioning, calling and holding the meeting.

S.M. 1996, c. 28, s. 31.

Meeting called by Registrar

75(1)

If, for any reason, it is impracticable to call a meeting of members of a credit union in the manner in which meetings of members may be called, or to conduct the meeting in the manner prescribed by the Act and the by-laws, or if for any other reason the Registrar thinks fit, the Registrar may order a meeting to be called, and direct the manner of conducting the meeting and such meeting is for all purposes a meeting of members of the credit union duly called and conducted.

Varying quorum

75(2)

Without restricting the generality of subsection (1), the Registrar may order that the quorum required by the Act or the by-laws be varied or dispensed with at a meeting called, held and conducted pursuant to this section.

S.M. 1996, c. 28, s. 31.

PART VII

DIRECTORS AND OFFICERS

Power to manage

76(1)

The directors shall

(a) exercise the powers of the credit union directly, or indirectly through the employees and agents of the credit union; and

(b) direct the management of the business and affairs of the credit union.

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.

S.M. 1996, c. 28, s. 35; S.M. 2004, c. 29, s. 25; S.M. 2021, c. 24, s. 20.

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.

Persons who may not be directors

77(2)

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, the central or the guarantee corporation;

(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) 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) 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;

(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).

77(3) to (5)   [Repealed] S.M. 2021, c. 24, s. 21.

S.M. 1996, c. 28, s. 36; S.M. 2004, c. 29, s. 26; S.M. 2010, c. 20, s. 10; S.M. 2021, c. 11, s. 80; S.M. 2021, c. 24, s. 21.

Terms of office of first directors

78(1)

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

(b) in the case of an amalgamation, until the expiry of his or her term of office as set out in the amalgamation agreement.

Election of directors

78(2)

The members of a credit union shall, by ordinary resolution at the first meeting of the members and at each succeeding annual meeting of the members at which an election of directors is required, elect directors to hold office for a term established in the by-laws, which term shall not exceed 3 years.

Election of district directors

78(3)

Notwithstanding the provisions of subsection (2) the by-laws of a credit union may provide the manner in which members of a credit union elect directors for a district at a district meeting.

Staggered terms

78(4)

It is not necessary that all directors elected at a meeting of members hold office for the same term.

No stated terms

78(5)

A director not elected for an expressly stated term ceases to hold office at the close of the first annual meeting of members following that director's election.

Incumbent directors

78(6)

Notwithstanding anything in this section to the contrary, if directors are not elected at a meeting of the members, the incumbent directors continue in office until their successors are elected.

S.M. 1996, c. 28, s. 31; S.M. 2004, c. 29, s. 27.

Ceasing to hold office

79(1)

A director of a credit union ceases to hold office when he

(a) dies or resigns; or

(b) is removed from office in accordance with section 80; or

(c) ceases to meet the qualifications set out in section 77 or the by-laws of the credit union for being a director.

Effective date of resignation

79(2)

The resignation of a director becomes effective at the time a written resignation is received by the credit union, or at the time specified in the resignation, whichever is later.

S.M. 1996, c. 28, s. 37.

Removal of directors

80(1)

The members of a credit union may, by ordinary resolution, at a special meeting remove any director from office.

Vacancy

80(2)

A vacancy created by the removal of a director from office may be filled at the meeting of the members at which the director is removed or, if not so filled, may be filled under section 82.

Statement of director

81(1)

A director who

(a) resigns; or

(b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing him or her from office; or

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed or elected to fill the office of director in his or her stead, whether because of his or her resignation or removal or because his or her term of office has expired or is about to expire;

is entitled to submit to the credit union a written statement giving the reasons for the resignation or for opposing any action or resolution proposed for the purposes described in clauses (b) and (c).

Circulating statement

81(2)

A credit union shall forthwith send a copy of the statement referred to in subsection (1) to every member and to the Registrar.

Immunity

81(3)

No credit union or person acting on its behalf incurs any liability by reason only of circulating a statement in compliance with subsection (2).

Filling vacancy

82(1)

Subject to subsection (4), a quorum of directors may fill any vacancy among the directors, except a vacancy resulting from an increase in, or the members' failure to elect, the fixed or minimum number of directors.

82(2)

[Repealed] S.M. 2021, c. 24, s. 22.

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.

Members filling vacancy

82(4)

The articles or by-laws may provide that a vacancy among the elected directors shall be filled only by a vote of the members.

Ratification

82(5)

If a vacancy among the elected directors is filled pursuant to subsection (1), the appointment shall be ratified at the next meeting of members.

S.M. 1996, c. 28, s. 31; S.M. 2021, c. 24, s. 22

Notice of change of directors

83(1)

Within 15 days after a change of directors occurs, a credit union shall send to the Registrar a notice setting out the change, and the Registrar shall file the notice.

Application to court

83(2)

Any interested person or the Registrar may apply to the court for an order requiring a credit union to comply with subsection (1), and upon the application the court may make the order and any further order it thinks fit.

Effect of notice

83(3)

A director named in the articles or in a notice sent by the credit union to the Registrar pursuant to subsection (1) and filed by the Registrar is presumed for the purposes of this Act to be a director of the credit union.

S.M. 1987-88, c. 66, s. 6; S.M. 2004, c. 29, s. 28.

Meeting of directors

84(1)

Unless the articles or by-laws otherwise provide, the directors of a credit union may meet at such place and upon such notice as the directors may determine.

Quorum

84(2)

Unless the articles or by-laws otherwise provide, a majority of the directors constitutes a quorum at any meeting of directors and, notwithstanding any vacancy among the directors, a quorum of directors may exercise all the powers of the directors.

Notice of meeting

84(3)

Unless the by-laws otherwise provide, a notice of a meeting of directors need not specify any matter that is to be dealt with at the meeting except

(a) any question or matter requiring the approval of the members; or

(b) the filling of a vacancy among the directors; or

(c) the issuance or redemption of any securities of the credit union other than common shares; or

(d) the approval of any financial statements of a kind referred to in section 98.

Waiver of notice

84(4)

A director may in any manner waive notice of a meeting of directors and attendance of a director at a meeting of directors is a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting to the transaction of any business on the grounds that the meeting was not lawfully called.

Adjournment

84(5)

Notice of an adjourned meeting of directors is not required to be given if the time and place of the adjourned meeting is announced at the original meeting.

Electronic meetings

84(6)

Unless prohibited by a credit union's articles or by-laws, a meeting of directors may be held as an electronic meeting. Such a meeting must be held in accordance with the regulations, if any.

Presence

84(7)

A director participating electronically in a meeting of directors is deemed to be present at the meeting.

Notice of electronic meeting

84(8)

If a meeting of directors is held as an electronic meeting, any notice of the meeting must include instructions on how to participate in the meeting electronically.

Fully electronic meetings

84(9)

A requirement in this section to meet at a specific place or to provide notice of the place of a meeting does not apply to a fully electronic meeting.

S.M. 1996, c. 28, s. 31; S.M. 2022, c. 4, s. 50.

Delegation

85(1)

The directors of a credit union may appoint from their number a committee of directors and delegate to that committee any of the powers of the directors.

Authority of directors

85(2)

Notwithstanding subsection (1), no committee of directors has authority to

(a) submit to the members any question or matter requiring approval of the members; or

(b) fill a vacancy among the directors; or

(c) issue or redeem securities, except in the manner and on the terms authorized by the directors; or

(d) approve any financial statement of a kind referred to in section 98.

Validity of act of directors and officers

86

An act of a director or officer is valid, notwithstanding any irregularity in the election of or appointment or any defect in the qualifications of the director.

Resolution in lieu of meeting

87(1)

A resolution in writing, signed by all the directors entitled to vote on that resolution at a meeting of directors or a committee of directors

(a) satisfies all requirements of this Act relating to meetings of directors or meetings of committees of directors, as the case may be;

(b) is as valid as if it had been passed at a meeting of directors or of a committee of directors, as the case may be; and

(c) is effective from the date specified in the resolution, which shall not be prior to the date on which the first director signed the resolution.

Filing resolution

87(2)

A copy of every resolution referred to in subsection (1) shall be kept with the minutes of the proceedings of the directors or committee of directors, as the case may be.

Liability of directors

88(1)

Directors of a credit union who vote for or consent to a resolution authorizing a payment contrary to sections 30 and 32, or the payment of an indemnity contrary to section 96, are jointly and severally liable to restore to the credit union any amount so distributed or paid and not otherwise recovered by the credit union.

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, the regulations, the standards of sound business practice or a directive of the guarantee corporation, 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, the regulations, the standards of sound business practice or a directive of the guarantee corporation, 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.

Contribution

88(3)

A director, officer, or member of a committee who satisfies a judgment rendered under this section, or a director or member of a committee who satisfies a judgment rendered under The Employment Standards Code, is entitled to contribution from all other persons who, by virtue of this Act or The Employment Standards Code, are also liable.

Recovery

88(4)

A director, officer, or member of a committee who is liable under subsection (1) or (2) may apply to the court for an order compelling a member or other recipient to pay any money or deliver any property to the director, officer or member of a committee that was improperly paid or distributed to the member or other recipient.

Limitations

88(5)

Any action to enforce a liability imposed by subsections (1) and (2) may not be commenced after 2 years from the date of the resolution authorizing the thing complained of.

S.M. 1998, c. 29, s. 156; S.M. 2010, c. 20, s. 11; S.M. 2021, c. 24, s. 23.

Application of The Employment Standards Code

89

Part 3 of The Employment Standards Code applies to credit unions and their directors.

S.M. 1998, c. 29, s. 156.

Duty of directors to report

90

Where any director of a credit union becomes aware that

(a) the credit union is unable to make any lawful payment it is required to make, except with the result that

(i) the credit union would after that payment be unable to pay its liabilities as they become due, or

(ii) the realizable value of the credit union's assets would thereby be less than the aggregate of its liabilities and the capital account of all classes of shares of the credit union other than common shares; or

(b) the credit union is financially unsound or conducting its affairs in a manner that tends to increase the risk of a claim upon the guarantee corporation;

the director shall within 7 days give written notice thereof to the Registrar.

S.M. 1996, c. 28, s. 38.

Definition

91(1)

Without in any way limiting those matters which may be considered to be material in nature, a "material contract" in this section includes a contract of any kind made by a credit union under which it

(a) employs a person as a full-time employee;

(b) retains the service of a person otherwise than as an employee; or

(c) disposes of or acquires property whether by sale, purchase, lease or otherwise, for consideration that exceeds $5,000 in value.

Interest in contracts of relatives

91(2)

A director or officer shall be deemed to have a material interest in any material contract in which any of the following persons is a party or in which they have a material interest:

(a) the spouse or common-law partner of the director or officer;

(b) the parent, child, grandparent, grandchild, brother or sister of the director or officer or of the spouse or common-law partner of the director or officer;

(c) the spouse or common-law partner of any person mentioned in clause (b).

Interest in contracts of others

91(3)

A director or officer shall be deemed to have a material interest in any material contract involving another person where the director or officer is

(a) a creditor of that person for a debt that is in excess of $5,000;

(b) a guarantor of the debts of that person in an amount that is in excess of $5,000;

(c) the owner or beneficial owner of not less than 20% of the issued shares of any class of shares of that person;

(d) a partner of that person;

(e) a member along with that person in any association; or

(f) a director or officer of that person.

Officer defined

91(4)

In this section "officer" includes a committee member, general manager, or agent of a credit union.

Exceptions

91(5)

For purposes of this section, a material contract does not include

(a) an arrangement by way of security for money lent to or obligations undertaken by a director, officer or employee of the credit union for the benefit of the credit union;

(b) a contract relating primarily to the remuneration of directors, or officers of the credit union;

(c) a contract for indemnity or insurance under section 96; or

(d) loans made to directors, officers or employees in the ordinary course of the credit union's business and in compliance with the Act, the standards of sound business practice, the by-laws and the lending policies of the credit union.

Disclosure

91(6)

A director or officer of a credit union who

(a) is a party to a material contract or proposed material contract with the credit union; or

(b) has a material interest in a contract or proposed contract between a person and the credit union;

shall be deemed to have a conflict of interest with the credit union and shall disclose in writing to the credit union and request to have entered in the minutes of meetings of directors, the nature and extent of the interest and shall not participate in any vote conducted by the directors or of a committee of the credit union relating to the material contract or proposed material contract.

Time of disclosure for director or officer

91(7)

A director or officer shall make the disclosure required by subsection (6) forthwith upon the director or officer becoming aware of the conflict of interest.

Continuing disclosure

91(8)

For the purposes of this section, general notice to the directors by a director or officer, declaring that he or she is a director or officer of or is to be regarded as having a material interest in any contract made with a person, is a sufficient declaration of interest in relation to any contracts so made.

Avoidance standards

91(9)

A contract or transaction in which a director or officer has a conflict of interest, is neither void nor voidable by reason only of that conflict of interest or by reason only that a director with a conflict of interest is present at or is counted to determine the presence of a quorum of a meeting of directors or a committee of directors that authorized the contract or transaction, if the director or officer disclosed the conflict of interest in accordance with this section, did not participate in the vote to authorize such contract or transaction, and the contract or transaction was approved by the directors or the members and it was reasonable and fair to the credit union at the time it was approved.

Approval by members

91(10)

When a director votes on a resolution in which the director has declared a conflict of interest, the contract or transaction that is the subject of the resolution will only be valid if it is approved by not less than 2/3 of the votes cast by the members at a special meeting of the credit union.

Application to court

91(11)

Where a director or officer of a credit union fails to disclose a conflict of interest in accordance with this section or participates in a vote which is not subsequently ratified by the members, the court may, upon the application of the credit union or a member of the credit union, set aside the contract or transaction on such terms as it sees fit.

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.

S.M. 1996, c. 28, s. 31; S.M. 2002, c. 24, s. 16; S.M. 2010, c. 20, s. 12; S.M. 2021, c. 24, s. 24.

Officers

92

Subject to the articles and by-laws,

(a) the directors may designate the officers of the credit union, elect or appoint as officers persons of full capacity, specify their duties and delegate to them powers to manage the business and affairs of the credit union except powers to

(i) submit to the members any question or matter requiring the approval of the members, or

(ii) fill a vacancy among the directors, or

(iii) issue or redeem securities, except in the manner and on the terms authorized by the directors, or

(iv) approve any financial statements of a kind referred to in section 98;

(b) the directors may elect or appoint committees and delegate powers, duties and responsibilities to them, except powers to do anything referred to in clause (a);

(c) a director may become an officer of the credit union and may become a member of a committee; and

(d) 2 or more offices of the credit union may be held by the same person.

S.M. 1996, c. 28, s. 31.

Remuneration

93

Subject to the articles and the by-laws, the directors of a credit union may fix the remuneration of the directors, officers, committee members, delegates and employees of the credit union.

Duty of care of directors and officers

94(1)

Every director and officer of a credit union, in exercising the powers and discharging the duties of a director or officer shall

(a) act honestly and in good faith with the view to the best interest of the credit union; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

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.

Interpretation

94(4)

This section is in addition to and not a derogation of any other enactment or rule of law relating to the duty or liability of directors or officers of a credit union.

S.M. 1996, c. 28, s. 31; S.M. 2021, c. 24, s. 25.

Dissent

95(1)

A director who is present at a meeting of directors is deemed to have consented to any resolution passed or action taken thereat, unless the director

(a) requests that the director's dissent be or the dissent is entered in the minutes of the meeting; or

(b) sends a written dissent to the secretary of the meeting before the meeting is adjourned; or

(c) sends a dissent by registered mail to the registered office of the credit union immediately after the meeting is adjourned.

Loss of right to dissent

95(2)

A director who votes for or consents to a resolution is not entitled to dissent under subsection (1).

Dissent of absent director

95(3)

A director who was not present at a meeting at which a resolution was passed or action taken is deemed to have consented thereto, unless within 7 days after becoming aware of the resolution the director

(a) causes his or her dissent to be placed with the minutes of the meeting; or

(b) sends a dissent by registered mail it to the registered office of the credit union.

Reliance of statements

95(4)

A director who relies in good faith upon

(a) financial statements of the credit union represented by an officer or the auditor of the credit union to reflect fairly the financial condition of the credit union; or

(b) the report of a lawyer, accountant, engineer, appraiser or any other person whose profession lends credibility to any statement made by him or her;

is not liable under section 88.

S.M. 1987-88, c. 66, s. 6.

Indemnification

96(1)

Except in the case of an action by or on behalf of the credit union or body corporate to procure a judgment in its favour, or by or on behalf of the Registrar or the guarantee corporation under section 208, in which case the approval of the court must first be obtained, a credit union may indemnify a director or officer of the credit union or a person who acts or acted at the credit union's request as a director or officer of a body corporate of which the credit union is or was a member, shareholder or creditor, and his or her heirs and legal representatives, against all costs, charges and expenses, including any amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer of the credit union or body corporate, if the director or officer

(a) acted honestly and in good faith with a view to the best interests of the credit union; and

(b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing the conduct was lawful.

Right to indemnity

96(2)

Notwithstanding anything in this section, a person referred to in subsection (1) is entitled to indemnity from the credit union in respect of all costs, charges and expenses reasonably incurred in connection with the defence of any civil, criminal or administrative action or proceeding to which that person is made a party by reason of being or having been a director or officer of a credit union or body corporate if the person seeking indemnity

(a) was substantially successful on the merits in defence of the action or proceeding; and

(b) fulfills the conditions set out in clauses (1)(a) and (b).

Insurance for directors and officers

96(3)

A credit union may purchase and maintain insurance for the benefit of any person referred to in subsection (1) against any liability incurred by that person

(a) as a director or officer of the credit union except where the liability relates to the failure of that person to act honestly and in good faith with a view to the best interests of the credit union; and

(b) as a director or officer of another body corporate where he acts or acted in that capacity at the credit union's request except where the liability relates to the failure to act honestly and in good faith with a view to the best interests of the body corporate.

Application to court

96(4)

A credit union or a person referred to in subsection (1) may apply to the court for an order approving an indemnity under this section, and the court may so order and make any further order it thinks fit.

Notice to Registrar

96(5)

An applicant under subsection (4) shall give the Registrar and the guarantee corporation notice of the application, and the Registrar and the guarantee corporation are entitled to appear and be heard in person or by counsel.

Other notice

96(6)

Upon an application under subsection (4), the court may order notice to be given to any interested person and that person is entitled to appear and be heard in person or by counsel.

S.M. 1996, c. 28, s. 39.

PART VIII

RETURNS AND FINANCIAL DISCLOSURE

Annual return

97(1)

Before a day fixed by the Registrar, a credit union shall send the Registrar an annual return in a form he or she approves.

97(2)

[Repealed] S.M. 2004, c. 29, s. 30.

Other returns

97(3)

In addition to the return required under subsection (1), the Registrar may require a credit union to file within a set time a return containing such other information as the Registrar considers necessary.

Fees

97(4)

The regulations may prescribe a filing fee payable by a credit union to the Registrar upon the filing of a return under this section, and additional fees for late filing.

S.M. 2004, c. 29, s. 30.

Annual financial statements

98(1)

At each annual meeting of members of a credit union, the directors shall place before the members,

(a) financial statements, as prescribed, for the period that began on the date the credit union came into existence and ended not more than 4 months before the annual meeting, or if the credit union has completed a financial year the period that began immediately after the end of the last completed financial year and ended not more than 4 months before the annual meeting;

(b) the report of the auditor; and

(c) any further information respecting the financial position of the credit union and the results of its operations required by this Act or the regulations or the articles or by-laws of the credit union.

Availability of financial statements

98(1.1)

The directors must have the financial statements and auditor's report available for review by the members at least 10 days before the day of the annual meeting.

Directors' and officers' disclosure

98(2)

At each annual meeting of members of a credit union, the directors shall disclose in a form satisfactory to the Registrar

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

(b) the aggregate amount paid to all directors as reimbursement for expenses incurred on credit union business;

(b.1) the aggregate amount the credit union paid on behalf of the directors; and

(c) a summary of all loans, deposits or fees that

(i) are made, received from, or charged to directors or officers or persons in whom any of them has a material interest, and

(ii) do not conform to the credit union's ordinary practices for members who are not directors or officers.

S.M. 1996, c. 28, s. 40; S.M. 2004, c. 29, s. 31; S.M. 2005, c. 42, s. 6.

Condition precedent to issue

99

A credit union shall not issue, publish or circulate copies of the financial statements referred to in section 98, unless the financial statements are

(a) approved by the directors, and the approval is evidenced by the signatures of 2 or more of the directors on the statements; and

(b) accompanied by the report of the auditor of the credit union.

Request for documents

100

A credit union shall, at any time on the request of a member, make available to that member a copy of the documents referred to in section 98.

Submission to Registrar and guarantee corporation

101(1)

A credit union shall, before each annual meeting of members, send a copy of the documents referred to in section 98 to the Registrar and to the guarantee corporation.

Submission to guarantee corporation

101(2)

A credit union shall, at all times, upon request, provide to the guarantee corporation such other information as the corporation may reasonably require to enable it to discharge its responsibilities under this Act.

S.M. 1996, c. 28, s. 41.

Appointment of auditor

102(1)

At each annual meeting of a credit union the members of the credit union shall appoint, from a list of approved auditors prepared by the guarantee corporation, auditors for the credit union.

Annual audit

102(2)

The auditor of a credit union shall conduct, on an annual basis, the audit of a credit union and shall make such inquiries as are necessary in the auditor's opinion to enable the auditor to report on the financial status of the credit union.

Disqualification of auditor

102(3)

Subject to subsection (7), a person who is not independent of the credit union or of the directors or officers of the credit union is disqualified from being an auditor of a credit union.

Independence

102(4)

For the purposes of this section,

(a) independence is a question of fact;

(b) a person is deemed not to be independent of the credit union if that person or his or her business partner

(i) is a business partner, director, officer or employee of the credit union or of any director, officer or employee of the credit union, or

(ii) is indebted to the credit union at the time an audit is performed.

Duty to resign

102(5)

An auditor who becomes disqualified under this section shall, subject to subsection (7), resign forthwith after becoming aware of the disqualification.

Disqualification order

102(6)

Notwithstanding subsection (7), any interested person may apply to the court for an order declaring an auditor to be disqualified under this section and the office of auditor to be vacant.

Exemption order

102(7)

Any interested person may apply to the Registrar for an order exempting an auditor from disqualification under this section, and the Registrar may, if satisfied that an exemption would not unfairly prejudice the members, make an exemption order on such terms as the Registrar thinks fit, and may make the order with retroactive effect.

S.M. 1996, c. 28, s. 42.

Ceasing to hold office

103(1)

An auditor of a credit union ceases to hold office on

(a) death or resignation; or

(b) removal from office pursuant to subsection 102(6) or 104(1).

Effective date of resignation

103(2)

A resignation of an auditor becomes effective at the time a written resignation is sent to the credit union, or at the time specified in the resignation, whichever is later.

Removal of auditor

104(1)

The members of a credit union may, at a special meeting, remove from office and replace any auditor appointed by them.

Notice of meeting

104(2)

Notice of a meeting called for the purpose of removing an auditor from office shall be given to the guarantee corporation and the guarantee corporation is entitled to be represented and be heard at such meeting.

S.M. 1996, c. 28, s. 43.

Filling vacancy

105(1)

Subject to subsection (3), the directors shall forthwith fill any vacancy in the office of auditor.

Calling meeting

105(2)

If there is not a quorum of directors, the directors then in office shall, within 21 days after a vacancy in the office of auditor occurs, call a special meeting of members to fill the vacancy and, if they fail to call a meeting or if there are no directors, the meeting may be called by any member.

Members filling vacancy

105(3)

The by-laws of a credit union may provide that a vacancy in the office of auditor shall only be filled by a vote of the members.

Unexpired term

105(4)

An auditor appointed to fill a vacancy holds office for the unexpired term of his predecessor.

S.M. 1996, c. 28, s. 31.

Court appointed auditor

106

If a credit union does not have an auditor, the court may, upon the application of a member or the Registrar, appoint and fix the remuneration of an auditor and the auditor so appointed holds office until an auditor is appointed by the members.

Right to attend meeting

107(1)

The auditor of a credit union is entitled to receive notice of every meeting of members and of the audit committee and to attend and be heard thereat on matters relating to the auditor's duties.

Duty to attend meeting

107(2)

Where a director or member of a credit union gives written notice, not less than 10 days before a meeting of members, to the auditor or a former auditor of the credit union, the auditor or former auditor shall attend the meeting at the expense of the credit union and answer questions relating to the auditor's or former auditor's duties as auditor of the credit union.

Notice to credit union

107(3)

A director or member who gives a notice under subsection (2) shall send concurrently a copy of the notice to the credit union.

Offence

107(4)

An auditor or former auditor of a credit union who fails to comply with subsection (2) is guilty of an offence and liable on summary conviction to a fine not exceeding $5,000 or imprisonment for a term not exceeding 6 months, or to both.

S.M. 2010, c. 20, s. 13.

Statement of auditor

108(1)

An auditor who

(a) resigns; or

(b) receives a notice or otherwise learns of a meeting of members called for the purpose of removing that auditor from office; or

(c) receives a notice or otherwise learns of a meeting of directors or members at which another person is to be appointed to fill the office of auditor, whether because of the resignation or removal of the incumbent auditor or because the auditor's term of office has expired or is about to expire;

is entitled to submit to the credit union a written statement giving the reasons for the resignation or opposing any proposed action or resolution.

Circulating statement

108(2)

The credit union shall forthwith send a copy of the statement referred to in subsection (1) to every member entitled to receive notice of any meeting referred to in subsection 107(1) and to the guarantee corporation.

Replacing auditor

108(3)

No person shall accept an appointment or consent to be appointed as an auditor of a credit union to replace an auditor who has resigned, been removed or whose term has expired or is about to expire until that person has requested and received from that auditor a written statement of the circumstances and the reason why, the auditor is to be replaced.

Exception

108(4)

Notwithstanding subsection (3), a person otherwise qualified may accept an appointment or consent to be appointed as auditor of a credit union if, within 15 days after making the request referred to in that subsection, no reply is received.

Effect of non-compliance

108(5)

Unless subsection (4) applies, the appointment of an auditor of a credit union of a person who has not complied with subsection (3) is void.

S.M. 1996, c. 28, s. 44.

Report to guarantee corporation

109(1)

The guarantee corporation may require the auditor to report to it upon the adequacy of the procedure adopted by the credit union for the safety of the creditors and members of the credit union and as to the sufficiency of the auditor's own procedure in auditing the affairs of the credit union.

Scope of audit

109(2)

The Registrar may, upon request of the guarantee corporation, enlarge or extend the scope of the audit or direct any other or particular examination to be made or procedure to be established in any particular case as, in the Registrar's opinion, the public interest may require.

S.M. 1996, c. 28, s. 45.

Right to information

110(1)

Upon the demand of an auditor of a credit union, the present or former directors, officers, committee members, employees or agents of the credit union or its subsidiary shall furnish such

(a) information and explanations; and

(b) access to records, documents, books, accounts and vouchers of the credit union;

as are, in the opinion of the auditor, necessary to enable the auditor to make the examination and report required under section 98 and as the directors, officers, committee members, employees or agents are reasonably able to furnish.

Information from subsidiaries

110(2)

Upon the demand of the auditor of a credit union, the directors of the credit union shall obtain from the present or former directors, officers, employees and agents of any subsidiary of the credit union and furnish to the auditor any information or explanations that the present or former directors, officers, employees and agents of the subsidiary are reasonably able to furnish and that, in the opinion of the auditor, is necessary to enable the auditor to make the examination or report required under section 98.

Audit committee

111(1)

The directors of a credit union shall establish an audit committee having at least three members

(a) each of whom is a member or director of the credit union;

(b) a majority of whom are not officers of the credit union or of any of its subsidiaries; and

(c) none of whom is

(i) the chair of the board of directors, or

(ii) an employee of a credit union.

111(2)

[Repealed] S.M. 1996, c. 28, s. 46.

Duties of audit committee

111(3)

The audit committee of a credit union shall perform such duties and functions as may be prescribed.

Calling meeting

111(4)

The auditor of a credit union or a member of the audit committee may call a meeting of the committee.

Notice of errors

111(5)

A director or an officer of a credit union shall forthwith upon becoming aware of any error or misstatement in a financial statement that the auditor or a former auditor has reported upon notify the audit committee and the auditor.

Error in financial statements

111(6)

An auditor or former auditor of a credit union who is notified or becomes aware of an error or misstatement in a financial statement that the auditor has reported upon, shall if in the auditor's opinion the error or misstatement is material, inform each director accordingly.

Duty of directors

111(7)

Where under subsection (6) the auditor or former auditor informs the directors of an error or misstatement in a financial statement, the directors shall

(a) prepare and issue a revised financial statement; and

(b) otherwise inform the members, the Registrar and the guarantee corporation.

111(8)

[Repealed] S.M. 2010, c. 20, s. 14.

S.M. 1996, c. 28, s. 46; S.M. 2010, c. 20, s. 14.

Duty of auditor to manager and directors

112(1)

It is the duty of the auditor to report to the manager, the audit committee and directors of the credit union in writing any transactions or conditions affecting the well-being of the credit union that in the auditor's opinion are not satisfactory and require rectification and, without restricting the generality of this requirement, the auditor shall as occasion requires make a report to the audit committee with respect to

(a) any transactions of the credit union that in the opinion of the auditor have not been within the powers of the credit union; and

(b) any unsound financial practices, transactions, or policies that in the auditor's opinion may contribute to losses by the credit union.

Procedure

112(2)

An auditor who makes a report under subsection (1), shall transmit it in writing to the manager, audit committee and directors of the credit union and the report shall be presented to the meeting of directors next ensuing after it is received, and it shall be incorporated in the minutes thereof and the auditor shall, at the time of transmitting the report, furnish a copy of the report to the guarantee corporation.

S.M. 1996, c. 28, s. 47.

Qualified privilege

113

Any oral or written statement or report made under this Act by the auditor of a credit union has qualified privilege.

PART IX

FUNDAMENTAL CHANGES

Amendment of Articles

114(1)

Subject to the approval of the Registrar under section 116, the articles of a credit union may be amended by special resolution of the members.

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.

Clerical errors

114(2)

The articles of a credit union containing a clerical error may be amended by resolution of the directors or by ordinary resolution of the members to correct the error.

Filing articles of amendment

114(3)

Where the articles of a credit union are amended under this section, articles of amendment shall, within 6 months of the date of the resolution of the members authorizing the amendment, be sent to the Registrar for filing and the Registrar shall refuse to file the articles if not so sent.

Revocation of amending resolution

114(4)

The directors of a credit union may, if authorized by the members in any resolution effecting an amendment under this section, revoke the resolution before it is acted upon without further approval of the members.

S.M. 1987-88, c. 66, s. 6; S.M. 2010, c. 20, s. 15.

Articles sent to Registrar

115

Subject to any revocation under subsection 114(4), after an amendment is adopted under subsection 114(1), articles of amendment shall be sent to the Registrar.

S.M. 2004, c. 29, s. 32.

Certificate of amendment

116(1)

Upon receiving articles of amendment, the Registrar may, if satisfied that the amendment is advisable and subject to section 127, file the articles and issue a certificate of amendment in accordance with section 190.9.

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).

S.M. 2010, c. 20, s. 16; S.M. 2021, c. 24, s. 26.

Effect of certificate

117(1)

An amendment becomes effective on the date shown on the certificate of amendment, and the articles are amended accordingly.

Existing rights preserved

117(2)

No amendment to the articles of a credit union affects any existing cause of action, claim or liability to prosecution in favour of or against the credit union or any of its directors, committee members or officers or any civil, criminal or administrative action or proceeding to which the credit union or any of its directors, committee members, or officers is a party.

Restated articles

118(1)

The directors may at any time, and shall when so directed by the Registrar, restate the articles of incorporation as amended and send restated articles of incorporation to the Registrar.

118(2)

[Repealed] S.M. 2004, c. 29, s. 33.

Restated certificate

118(3)

Upon receipt of restated articles of incorporation, the Registrar shall issue a restated certificate of incorporation in accordance with section 190.9.

Effect of certificate

118(4)

Restated articles of incorporation are effective on, from and after the date shown in the restated certificate of incorporation and supersede the original articles of incorporation and all amendments thereto.

S.M. 2004, c. 29, s. 33; S.M. 2021, c. 24, s. 26.

Amalgamation

119(1)

Two or more credit unions may amalgamate and continue as one credit union.

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.

Consent of supervisor

119(2)

A credit union that is under supervision shall not amalgamate without the consent of its supervisor.

S.M. 2010, c. 20, s. 17.

Amalgamation agreement

120

Credit unions proposing to amalgamate shall enter into an agreement with each other setting out the terms and means of effecting the amalgamation and, in particular, setting out

(a) the provisions that are required to be included in the articles of incorporation;

(b) the address of the registered office of the amalgamated credit union;

(c) the name, address and term of office of each proposed director of the amalgamated credit union;

(d) the manner in which the shares of each amalgamating credit union are to be converted into shares or other securities of the amalgamated credit union;

(e) if any shares of an amalgamating credit union are not to be converted into shares or other securities of the amalgamated credit union, the amount of money or securities that the holders of those shares are to receive in addition to or instead of securities of the amalgamated credit union;

(f) the proposed by-laws of the amalgamated credit union; and

(g) details of any arrangements necessary to perfect the amalgamation and to provide for the subsequent management and operation of the amalgamated credit union.

S.M. 1996, c. 28, s. 31; S.M. 2004, c. 29, s. 34.

Member approval of amalgamation agreement

121(1)

The directors of each amalgamating credit union shall submit the amalgamation agreement for approval to a meeting of the credit union's members. This is subject to subsection (5).

Notice of meeting

121(2)

A notice of a meeting of members shall be sent in accordance with section 63 to each member of each amalgamating credit union and shall

(a) include or be accompanied by a copy or summary of the amalgamation agreement; and

(b) state that a member is entitled to dissent in accordance with section 127.

Adoption of agreement

121(3)

An amalgamation agreement is adopted when the members of each amalgamating credit union have approved the amalgamation by a special resolution.

Termination of agreement

121(4)

An amalgamation agreement may provide that at any time before the issue of a certificate of amalgamation, the agreement may be terminated by the directors of any of the amalgamating credit unions.

Exception from requirement for members' approval

121(5)

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

(c) it certifies to the Registrar that the amalgamated credit union's articles and by-laws will be identical to its current articles and by-laws.

S.M. 2004, c. 29, s. 35.

Articles of amalgamation

122(1)

Subject to subsection 121(4), after an amalgamation has been adopted under section 121, articles of amalgamation shall be sent to the Registrar.

Attached declarations

122(2)

The articles of amalgamation shall have attached thereto a statutory declaration of a director or an officer of each amalgamating credit union that establishes to the satisfaction of the Registrar that

(a) there are reasonable grounds for believing that

(i) each amalgamating credit union is, and the amalgamated credit union will be, able to pay its liabilities as they become due, and

(ii) the realizable value of the assets of the amalgamated credit union upon completion of the amalgamation will not be less than the aggregate of its liabilities and capital account of all shares of the credit union other than common shares; and

(b) there are reasonable grounds for believing that

(i) no creditors and shareholders of the amalgamating credit unions who are not members thereof, will be prejudiced by the amalgamation, or

(ii) adequate notice has been given to all known creditors of the amalgamating credit unions and no creditor objects to the amalgamation otherwise than on grounds that are frivolous or vexatious.

Exemption from declaration

122(3)

The Registrar may exempt a credit union from the requirements of clause (2)(a) if the guarantee corporation consents to the amalgamation.

Adequate notice to creditors

122(4)

For the purposes of subsection (2), adequate notice is given if

(a) a notice in writing is sent to each known creditor having a claim against the credit union that exceeds $1,000;

(b) a notice is published in The Manitoba Gazette and once in a newspaper published or distributed in a place where each amalgamating credit union has its registered office; and

(c) each notice states that the credit union proposes to amalgamate with one or more specified other credit unions in accordance with this Act unless a creditor of the credit union objects to the amalgamation within 30 days from the date of the notice.

S.M. 1996, c. 28, s. 48; S.M. 2004, c. 29, s. 36; S.M. 2010, c. 20, s. 18.

Compulsory amalgamation

123

Where a credit union which is under supervision is ordered by its supervisor to amalgamate pursuant to section 214, the provisions of section 121 and subsection 122(2) shall not apply to the credit union which is ordered to amalgamate.

Certificate of amalgamation

124(1)

Upon receiving articles of amalgamation, the Registrar may, if satisfied that the amalgamation is advisable and subject to section 127, file the articles and issue a certificate of amalgamation in accordance with section 190.9.

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.

Effect of certificate of amalgamation

124(2)

On the date shown in the certificate of amalgamation,

(a) the amalgamation of the amalgamating credit unions and their continuance as one credit union becomes effective;

(b) the property of each amalgamating credit union continues to be the property of the amalgamated credit union;

(c) the amalgamated credit union continues to be liable for the obligations of each amalgamating credit union;

(d) any existing cause of action, claim or liability to prosecute remains unaffected;

(e) any civil, criminal or administrative action or proceeding pending by or against any of the amalgamating credit unions may be continued by or against the amalgamated credit union;

(f) any conviction against or any ruling, order or judgment in favour of or against any of the amalgamating credit union may be enforced by or against the amalgamated credit union;

(g) the articles of amalgamation are deemed to be the articles of incorporation of the amalgamated credit union and the certificate of amalgamation is deemed to be the certificate of incorporation of the amalgamated credit union;

(h) on the filing of a copy of the certificate of amalgamation, certified as a true copy by the Registrar, in any land titles, registry or other recording office, all the lands, charges on land, estates, properties, real, personal or mixed, charges on personal property, effects, rights, credits, judgments, assignments, choses in action of every description belonging to the amalgamating credit unions are transferred and vested in the amalgamated credit union without further act, conveyance or other deed; and

(i) the members and associates of the amalgamating credit unions become members and associates of the amalgamated credit union and the shares held in the amalgamating credit unions become shares in the amalgamated credit union subject to the terms of the amalgamation agreement.

S.M. 1987-88, c. 66, s. 6; S.M. 2010, c. 20, s. 19; S.M. 2021, c. 24, s. 26.

124.1

[Repealed]

S.M. 2010, c. 20, s. 20; S.M. 2021, c. 24, s. 27.

Extraordinary sale, lease or exchange

125(1)

A sale, lease or exchange of all or substantially all of the property of a credit union, requires the approval of the members in accordance with this section.

Notice of meeting

125(2)

A notice of a meeting of members shall be sent in accordance with section 63 to each member and shall

(a) include or be accompanied by a copy or summary of the agreement of sale, lease or exchange; and

(b) state that a member is entitled to dissent in accordance with section 127.

Terms and conditions of sale, lease or exchange

125(3)

At the meeting referred to in subsection (2), the members may by special resolution approve the sale, lease or exchange and may fix or authorize the directors to fix any of the terms and conditions thereof.

Approval of sale, lease or exchange

125(4)

A sale, lease or exchange referred to in subsection (1) is adopted when the members have approved the sale, lease or exchange.

Termination

125(5)

The directors of a credit union may, if so authorized by the members approving a proposed sale, lease or exchange and subject to the rights of third parties, abandon the sale, lease or exchange without further approval of the members.

Approval of Registrar

126(1)

The credit union shall, prior to completion of a sale, lease or exchange referred to in section 125, obtain the approval of the Registrar.

Declaration

126(2)

An approval shall not be granted under subsection (1) unless the Registrar has received a statutory declaration of a director or officer of the credit union proposing to sell, lease or exchange its property establishing to the satisfaction of the Registrar that there are reasonable grounds for believing that

(a) the sale, lease or exchange of the property will not increase the likelihood of a claim upon the guarantee corporation;

(b) no creditors, including shareholders of the credit union who are not members, will be prejudiced by the sale, lease or exchange of the property; and

(c) adequate notice has been given to all known creditors of the credit union and no creditor objects to the sale, lease or exchange of the property otherwise than on grounds that are frivolous or vexatious.

Adequate notice to creditors

126(3)

For the purposes of subsection (2), adequate notice is given if

(a) a notice is published once in The Manitoba Gazette and once in a newspaper published or distributed in the place where the credit union has its registered office; and

(b) each notice states that the credit union proposes to sell, lease or exchange all, or substantially all, of its property, as the case may be, pursuant to section 125, unless a creditor of the credit union objects to the sale, lease or exchange within 30 days from the date of the notice.

126(4)

[Repealed] S.M. 1992, c. 32, s. 3.

S.M. 1992, c. 32, s. 3; S.M. 1996, c. 28, s. 49.

Right to dissent

127(1)

Subject to sections 128 and 194, a member of a credit union may dissent if the credit union resolves to

(a) change its name;

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

(b) amalgamate with another credit union under section 121 without being exempted under subsection 121(5) from having the amalgamation approved by the members;

(c) sell, lease or exchange all or substantially all its property under section 125;

(d) add, change or remove any provision that is set out in the articles; or

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

Objection in writing

127(2)

A dissenting member shall send to the credit union, at or before any meeting of members at which a resolution referred to in subsection (1) is to be voted on, a written objection to the resolution, but where the dissenting member fails to send the written objection as required the dissenting member does not thereby lose the right to dissent if the credit union failed to give the dissenting member notice of the purpose of the meeting or of the right to dissent.

Objection to Registrar when subsection 121(5) applies

127(2.1)

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.

Notice to members and Registrar

127(3)

The credit union shall, within 10 days after the members adopt the resolution,

(a) send to each member who has filed an objection under subsection (2) a notice that the resolution has been adopted, but notice is not required to be sent to any member who withdraws an objection; and

(b) send to the Registrar a copy of the resolution and copies of any written objections received by the credit union under subsection (2).

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.

Approval of Registrar

127(4)

No resolution in respect of which written objection has been sent to the credit union under subsection (2) or the Registrar under subsection (2.1) or (3.4) shall be effective until approved by the Registrar.

Conditions

127(5)

The Registrar may require as a condition of approval under subsection (4) that a part or all of the indebtedness or other liability of the credit union to the dissenting member or shareholder be paid or satisfied on such terms as the Registrar may stipulate.

S.M. 2004, c. 29, s. 37; S.M. 2010, c. 20, s. 21.

"Reorganization" defined

128(1)

In this section, "reorganization" means the reorganization of a credit union pursuant to a court order made under

(a) section 194; or

(b) the Bankruptcy Act (Canada), approving a proposal; or

(c) any other Act of the Legislature that affects the rights of the credit union, its members or creditors.

Power of court

128(2)

Where a credit union is subject to an order referred to in subsection (1), its articles may be amended by the order to effect any change that might lawfully have been made by an amendment under section 114.

Further powers

128(3)

Where a court makes an order referred to in subsection (1), the court may also

(a) authorize the issue of debt obligations of the credit union and fix the terms thereof; and

(b) appoint directors in place of or in addition to all or any of the directors then in office.

Articles of reorganization

128(4)

After an order referred to in subsection (1) has been made, articles of reorganization shall be sent to the Registrar.

Certificate of amendment

128(5)

Upon the receipt of articles of reorganization, the Registrar shall file the articles and issue a certificate of amendment in accordance with section 190.9.

Effect of certificate of amendment

128(6)

A reorganization becomes effective on the date shown in the certificate of amendment, and the articles of incorporation are amended accordingly.

No dissent

128(7)

A member is not entitled to dissent under this section.

S.M. 2004, c. 29, s. 38; S.M. 2021, c. 24, s. 28.

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 190.9 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.

S.M. 2010, c. 20, s. 22; S.M. 2021, c. 24, s. 28.

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.

S.M. 2010, c. 20, s. 22.

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).

S.M. 2010, c. 20, s. 22.

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.

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.

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 190.9.

Notice of continuance deemed to be articles

128.4(8)

For the purposes of section 190.9, 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.

S.M. 2010, c. 20, s. 22; S.M. 2021, c. 24, s. 29.

Extra-provincial credit unions in Manitoba

129

A credit union incorporated under the laws of a jurisdiction other than Manitoba may, if so authorized by an agreement providing for reciprocal rights for credit unions from that jurisdiction, and upon filing with the Registrar such documents as the Registrar requires, become registered in Manitoba for such purposes as are specified in the agreement.

S.M. 1996, c. 28, s. 50; S.M. 1998, c. 45, s. 4.

Extra-provincial Registration

130

With the approval of the Registrar a credit union may register to carry on business under the laws of a jurisdiction other than Manitoba.

PART X

DISSOLUTION, LIQUIDATION
AND REVIVAL

Dissolution before commencing business

131(1)

A credit union that has not issued any shares may be dissolved at any time by resolution of all the directors.

Dissolution if no property

131(2)

A credit union that has no property and no liabilities may be dissolved by special resolution of the members and, where it has issued more than one class of shares, other than surplus shares, by special resolutions of the holders of each class of shares, whether or not they are otherwise entitled to vote.

Dissolution where property disposed of

131(3)

A credit union that has property or liabilities or both may be dissolved by special resolution of the members and, where it has issued more than one class of shares, other than surplus shares, by special resolutions of the holders of each class of shares if

(a) by the special resolution or resolutions the members and shareholders authorize the directors to cause the credit union to distribute any property and discharge any liabilities; and

(b) the credit union has, pursuant to section 125, sold its property and distributed any residual property and discharged all of its liabilities.

Shareholders not entitled to vote

131(4)

Notwithstanding subsections (2) and (3), the holders of any class of shares shall not be entitled to vote if, as a result of the dissolution, they would receive all moneys owing to them by the credit union.

Procedure

131(5)

A credit union which is being dissolved pursuant to this section shall prepare articles of dissolution in accordance with section 133.

Proposing liquidation and dissolution

132(1)

The directors, or a member, pursuant to section 65, may make a proposal for the voluntary liquidation and dissolution of a credit union.

Notice of meeting

132(2)

Notice of any meeting of members at which voluntary liquidation and dissolution is to be proposed shall set out the terms thereof.

Members resolution

132(3)

A credit union may liquidate and dissolve by special resolution of the members and, where the credit union has issued more than one class of shares, other than surplus shares, by special resolution of the holders of each class whether or not they are otherwise entitled to vote.

Shareholders not entitled to vote

132(4)

Notwithstanding subsection (3), the holders of any class of shares shall not be entitled to vote if, as a result of the dissolution, they would receive all moneys owing to them by the credit union.

Statement of intent to dissolve

132(5)

A statement of intent to dissolve shall be sent to the Registrar.

Certificate of intent to dissolve

132(6)

Upon receipt of a statement of intent to dissolve, the Registrar if satisfied that prior to dissolution the credit union will be able to discharge all of its obligations and liabilities shall issue a certificate of intent to dissolve in accordance with section 190.9.

Effect of certificate

132(7)

Upon issue of a certificate of intent to dissolve, the credit union shall cease to carry on business except to the extent necessary for the liquidation, but its legal existence continues until the Registrar issues a certificate of dissolution.

Liquidation

132(8)

After issue of a certificate of intent to dissolve, the credit union shall

(a) immediately cause notice thereof to be sent to each known creditor of the credit union;

(b) forthwith publish notice in the Manitoba Gazette and once in a newspaper published or distributed in the place where the credit union has its registered office and take reasonable steps to give notice thereof in every jurisdiction where the credit union carries on business;

(c) proceed to collect its property, to dispose of properties that are not to be distributed in kind to its members and shareholders, to discharge all its obligations and to do all other acts required to liquidate its business; and

(d) after giving the notice required under clauses (a) and (b) and adequately providing for the payment or discharge of all its obligations, distribute its remaining property, either in money or in kind, in accordance with the provisions of the special resolution authorizing the dissolution.

Revocation

132(9)

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).

Certificate of revocation of intent to dissolve

132(10)

Upon receipt of a statement of revocation of intent to dissolve, the Registrar shall issue a certificate of revocation of intent to dissolve in accordance with section 190.9.

Effect of certificate

132(11)

On the date shown in the certificate of revocation of intent to dissolve, the revocation is effective and the credit union may continue to carry on its business.

132(12)

[Repealed] S.M. 2004, c. 29, s. 39.

S.M. 2004, c. 29, s. 39; S.M. 2021, c. 24, s. 30.

Articles of dissolution

133(1)

After a credit union has complied with subsection 132(8), it shall send articles of dissolution to the Registrar if it has not revoked its certificate of intent to dissolve.

Certificate of dissolution

133(2)

Upon receipt of articles of dissolution, the Registrar shall issue a certificate of dissolution in accordance with section 190.9.

Effect of certificate

133(3)

The credit union ceases to exist on the date shown in the certificate of dissolution.

S.M. 2004, c. 29, s. 40; S.M. 2021, c. 24, s. 30.

Dissolution by Registrar

134(1)

Subject to subsections (2) and (3),

(a) where a credit union is in default for a period of 2 consecutive years in sending to the Registrar any notice or document required by this Act; or

(b) where the Registrar has reasonable cause to believe that a credit union is not carrying on business or is not in operation; or

(c) where a credit union is in default in sending to the Registrar any fee required by this Act;

the Registrar may dissolve the credit union by issuing a certificate of dissolution under this section.

Publication

134(2)

The Registrar shall not dissolve a credit union under this section until

(a) the credit union has been given 90 days notice of the Registrar's decision to dissolve the credit union; and

(b) a notice has been published in the Manitoba Gazette of the decision to dissolve the credit union not less than 30 days prior to the date the Registrar may dissolve the credit union.

Credit union not in operation

134(3)

Where a credit union, in writing, notifies the Registrar that it is not carrying on business or is not in operation, clause (2)(a) does not apply and the Registrar may publish a notice in compliance with clause (2)(b).

Certificate of dissolution

134(4)

Unless the credit union remedies the default or cause to the contrary is shown or an order is made by a court under section 202, the credit union is deemed to be dissolved on the date specified in the notice under clause (2)(b) and the Registrar shall issue a certificate of dissolution pursuant to section 133.

Application to court to liquidate or dissolve

135(1)

A member, the Registrar or the guarantee corporation may apply to the court for an order to liquidate and dissolve a credit union and if

(a) the court is satisfied that

(i) any act or omission of the credit union effects a result, or

(ii) the business or affairs of the credit union are or have been carried on or conducted in a manner, or

(iii) the powers of the directors of the credit union have been exercised in a manner

that is oppressive or unfairly prejudicial to, or unfairly disregards the interests of any depositor, security holder, creditor, director or officer; or

(b) the court is satisfied that the credit union is

(i) not fulfilling the purpose of a credit union generally under section 2, or

(ii) not carrying on business in accordance with the restrictions contained in its articles, or

(iii) not organized or operated in accordance with this Act, the regulations and the standards of sound business practice; or

(c) it is just and equitable that the credit union should be liquidated and dissolved;

the court may order that the credit union be placed under the supervision of a liquidator for the purposes of liquidation and dissolution.

Court order

135(2)

Upon an application under this section, the court may make such order, in addition to the order under subsection (1), as it thinks fit.

Certificate

135(3)

Upon receipt of an order under subsection (1), the Registrar shall

(a) publish notice of the order in the Manitoba Gazette, and

(b) issue a certificate of dissolution pursuant to section 190.9 after

(i) all obligations of the credit union are discharged and all its property distributed or disposed of, and

(ii) the liquidator has rendered a final report to the court.

S.M. 1987-88, c. 66. s. 6; S.M. 2021, c. 24, s. 31.

Custody of records

136

The guarantee corporation shall retain custody of the documents and records of any dissolved credit union for a period of 6 years following the effective date of the credit union's dissolution.

S.M. 1996, c. 28, s. 51.

"Member" defined

137(1)

In this section "member" includes the heirs of a member.

Continuation of actions

137(2)

Notwithstanding the dissolution of a credit union under this Act,

(a) a civil, criminal or administrative action or proceeding commenced by or against the credit union before its dissolution may be continued as if the credit union had not been dissolved;

(b) a civil, criminal or administrative action or proceeding may be brought against the credit union within 2 years after its dissolution as if the credit union had not been dissolved; and

(c) any property that would have been available to satisfy any judgment or order if the credit union had not been dissolved remains available for that purpose.

Service

137(3)

Service of a document upon a credit union after its dissolution may be effected by serving the document upon a person shown in the most recent notice on the records of the Registrar.

Reimbursement

137(4)

Notwithstanding the dissolution of a credit union, a member or shareholder to whom any of its property has been distributed is liable to any person claiming under subsection (2) to the extent of the amount received by that member or shareholder upon the distribution, and an action to enforce that liability may be brought within 2 years after the date of the dissolution of the credit union.

Representative action

137(5)

A court may order an action referred to in subsection (4) to be brought against the persons who were members or shareholders as a class, subject to such conditions as the court thinks fit and, if the plaintiff's claim is established the court may refer the proceedings to a referee or other officer of the court who may

(a) add as a party to the proceedings each person who was a member or shareholder found by the plaintiff;

(b) determine, subject to subsection (4) the amount that each person who was a member or shareholder shall contribute towards satisfaction of the plaintiff's claim; and

(c) direct payment of the amounts so determined.

Unknown claimants

138(1)

Upon the dissolution of a credit union, the portion of the property distributable to a creditor, shareholder or member who cannot be found shall be converted into money and paid to the guarantee corporation.

Constructive satisfaction

138(2)

A payment under subsection (1) is deemed to be in satisfaction of the debt to or claim of the creditor, shareholder or member.

Recovery

138(3)

If at any time it is established that a person is entitled to any moneys paid to the guarantee corporation under this Act, the guarantee corporation shall pay such an amount to that person.

Execution of documents after dissolution

138(4)

If at any time after the dissolution of a credit union, it is established that a person is entitled to receive a document for registration in a land titles office or the Personal Property Registry of the Province of Manitoba duly executed by that credit union, the guarantee corporation shall execute the document on behalf of the dissolved credit union.

Validity

138(5)

Any document executed by the guarantee corporation pursuant to subsection (4) shall be accepted for registration in any land titles office or Personal Property Registry of the Province of Manitoba, as the case may be, if the guarantee corporation has placed an explanation for its actions upon the document and the guarantee corporation has otherwise complied with the requirements of the land titles office or the Personal Property Registry.

Vesting in guarantee corporation

138(6)

Subject to this section and section 137, property of a credit union that has not been disposed of at the date of its dissolution vests in the guarantee corporation.

S.M. 1996, c. 28, s. 52.

Revival by the Registrar

139(1)

Where a credit union is dissolved under section 131, 132, or 134, any interested person may apply to the Registrar to have the credit union revived by filing articles of revival.

Revival by court

139(2)

Where a credit union is dissolved on the order of the court, any interested person may apply to the court to have the credit union revived.

S.M. 2004, c. 29, s. 41.

Certificate of revival

140(1)

Upon the receipt of articles of revival in prescribed form, or an order of the court to revive the credit union, the Registrar shall issue a certificate of revival in accordance with section 190.9.

Rights preserved

140(2)

A credit union is revived as a credit union under this Act on the date shown on the certificate of revival, and thereafter the credit union, subject to such reasonable terms as may be imposed by the court or the Registrar and to the rights acquired by any person after its dissolution, has all the rights and privileges and is liable for the obligations that it would have had if it had not been dissolved.

S.M. 2004, c. 29, s. 42; S.M. 2021, c. 24, s. 32.

Return of property on revival

141

If a credit union is revived under section 140, any property other than money that vested in the guarantee corporation pursuant to section 138 and that has not been disposed of shall be returned to the credit union and there shall be paid to the credit union by the guarantee corporation

(a) an amount equal to any money received by the guarantee corporation pursuant to section 138; and

(b) where property other than money vested in the guarantee corporation pursuant to section 138 and that property has been disposed of, an amount equal to the lesser of

(i) the value of the property at the date it vested in the guarantee corporation, and

(ii) the amount realized by the guarantee corporation from the disposition of the property.

S.M. 1996, c. 28, s. 53.

PART XI

THE GUARANTEE CORPORATION

Guarantee corporation continued

142

The guarantee corporation is continued as a body corporate.

S.M. 1996, c. 28, s. 55; S.M. 2010, c. 20, s. 24.

Purposes of the guarantee corporation generally

143(1)

The purposes of the 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;

(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.

Enabling satisfaction of withdrawals

143(2)

Without limiting the generality of subsection (1), the guarantee corporation shall do all things that are necessary to enable the credit unions to satisfy requests for withdrawal of deposits.

S.M. 1996, c. 28, s. 56; S.M. 2004, c. 29, s. 43; S.M. 2010, c. 20, s. 25; S.M. 2021, c. 24, s. 33.

Powers

144

Subject to the provisions of this Act and the regulations, the guarantee corporation may

(a) draw, make, accept, endorse, discount, execute and issue promissory notes, bills of exchange, bills of lading, warrants and negotiable and transferable instruments;

(b) borrow money upon the credit of the guarantee corporation;

(c) issue, reissue, sell or pledge debt obligations of the guarantee corporation;

(d) mortgage, hypothecate, pledge or otherwise create a security interest in all or any property of the guarantee corporation, owned or subsequently acquired, to secure any debt obligation of the guarantee corporation;

(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;

(f) acquire the assets and assume the liabilities of any credit union that is being wound-up or dissolved;

(g) enter into contracts to guarantee the whole or any part of the issue price of any class of shares of a credit union or any dividends thereon or any debt obligations of the credit union and to determine and fix the fees therefor;

(h) subject to the approval of the Registrar, invest moneys of the guarantee corporation in reasonable and proper investments;

(i) [repealed] S.M. 2021, c. 24, s. 34;

(j) establish insurance requirements and arrange group or blanket insurance coverage to be carried by credit unions in amounts that the guarantee corporation considers adequate;

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

(i) by a credit union, and

(ii) by the central,

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

(l) enter into an agreement with the Canada Deposit Insurance Corporation, the Government of Canada or of Manitoba, or an agent of the Canada Deposit Insurance Corporation, or of the Government of Canada, or of Manitoba, to extend to the board, loans or policies of insurance that the guarantee corporation deems adequate to enable it to meet its requirements for liquid funds and for its administration and operation and may, for the purpose of the foregoing, charge all or any of the assets of the guarantee corporation, and the moneys received or receivable from assessments or fees and the income therefrom;

(m) guarantee or advance loans to the central or a credit union if it is in financial difficulty and requires assistance to maintain solvency;

(n) make grants to a credit union to allow the credit union to meet the claims of its members for withdrawal of deposits;

(o) execute such documents on behalf of a credit union which has been dissolved as may be necessary for registration in any land titles office or Personal Property Registry;

(o.1) and (o.2) [repealed] S.M. 2021, c. 24, s. 34;

(p) do all other acts and things incidental to and necessary for the fulfilling of its purposes.

S.M. 1996, c. 28, s. 57; S.M. 2004, c. 29, s. 44; S.M. 2010, c. 20, s. 26; S.M. 2021, c. 24, s. 34.

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.

S.M. 2010, c. 20, s. 27.

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.

S.M. 1996, c. 28, s. 58; S.M. 2010, c. 20, s. 28; S.M. 2021, c. 24, s. 35.

Remuneration

145.1

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

S.M. 2010, c. 20, s. 28; S.M. 2021, c. 24, s. 36.

146

[Repealed]

S.M. 1996, c. 28, s. 58; S.M. 2010, c. 20, s. 29.

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 standards of sound business practice;

(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);

(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 requirements under this Act or the standards of sound business practice, 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) 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;

(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; or

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

(l) [repealed] S.M. 2021, c. 24, s. 37.

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).

S.M. 1996, c. 28, s. 59; S.M. 2010, c. 20, s. 30; S.M. 2021, c. 11, s. 80; S.M. 2021, c. 24, s. 37.

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.

S.M. 2021, c. 24, s. 38.

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.

S.M. 1996, c. 28, s. 60; S.M. 2021, c. 24, s. 38.

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.

S.M. 1996, c. 28, s. 60; S.M. 2010, c. 20, s. 31; S.M. 2021, c. 24, s. 38.

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.

S.M. 1996, c. 28, s. 61; S.M. 2010, c. 20, s. 31.

Quorum

152

A majority of the appointed members of the board constitutes a quorum.

S.M. 2021, c. 24, s. 39.

By-laws

153

The board, in order to regulate the business and affairs of the guarantee corporation, may enact by-laws not contrary to law and amend or repeal any of them, but no by-law and no amendment or repeal thereof is in force, or may be acted upon, unless the approval of the Registrar is obtained and a certified copy is filed with the Registrar.

S.M. 1996, c. 28, s. 61.

Records

154

The board shall keep proper records of the affairs of the guarantee corporation and shall keep such accounts of its finances as the Registrar may require.

S.M. 1996, c. 28, s. 61.

Fiscal year

155

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

S.M. 1996, c. 28, s. 62; S.M. 2010, c. 20, s. 32.

Annual financial statements

155.1(1)

The board must ensure that, within 120 days 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.

S.M. 2010, c. 20, s. 32; S.M. 2021, c. 24, s. 40.

155.2

[Repealed]

S.M. 2010, c. 20, s. 32; S.M. 2021, c. 24, s. 41.

Auditor to be appointed annually

156(1)

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

Auditor must be approved by the Registrar

156(2)

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

S.M. 1996, c. 28, s. 63; S.M. 2010, c. 20, s. 32; S.M. 2021, c. 24, s. 42.

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 (9);

(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.

S.M. 1996, c. 28, s. 64; S.M. 2010, c. 20, s. 32; S.M. 2022, c. 4, s. 51.

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.

S.M. 1994, c. 20, s. 4; S.M. 2010, c. 20, s. 32.

159

[Repealed]

S.M. 1996, c. 28, s. 65; S.M. 2010, c. 20, s. 33.

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.

S.M. 2021, c. 24, s. 43.

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.

S.M. 2021, c. 24, s. 43.

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.

S.M. 2021, c. 24, s. 43.

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.

S.M. 2021, c. 24, s. 43.

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.

S.M. 2021, c. 24, s. 43.

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.

S.M. 2021, c. 24, s. 43.

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.

S.M. 2021, c. 24, s. 43.

Amount of levies

160(1)

Subject to section 161, the guarantee corporation shall, at the end of each quarter of its fiscal year, make a levy upon each credit union, and the levy shall not exceed the prescribed percentage of the average of the month end totals in the quarter of

(a) the deposits with the credit union; and

(b) the accrued interest on the deposits.

Notice of levy

160(2)

Before the end of each quarter of the guarantee corporation's fiscal year, it must notify each credit union about the percentage on which the levy under subsection (1) for that quarter is to be based, and the credit union shall, within one month after the end of the quarter, pay the amount of the levy to the guarantee corporation.

Extension of time

160(3)

Notwithstanding subsection (2), the guarantee corporation may extend the time for payment of any amount levied under this section.

Special assessment

160(4)

If the guarantee corporation's board believes that the guarantee fund is, or is about to be, impaired, the corporation may by notice require each credit union to pay, in addition to amounts levied under subsection (1), a special assessment not to exceed the prescribed percentage of the total, as of the end of the fiscal year of the corporation immediately preceding the date the assessment is made, of

(a) the deposits with the credit union; and

(b) the accrued interest on the deposits.

Only one assessment per year

160(5)

The guarantee corporation shall not make more than one assessment under subsection (4) in any year.

Time for payment of assessment

160(6)

If the guarantee corporation makes an assessment under subsection (4), each credit union shall pay the amount of the assessment calculated on the percentage set out in the notice of assessment within the time specified in the notice of the assessment.

S.M. 1996, c. 28, s. 66; S.M. 2010, c. 20, s. 34.

Reduction of levy

161(1)

Subject to subsection (4), the guarantee corporation may reduce or refund all or part of the amount levied against a credit union under section 160.

161(2)

[Repealed] S.M. 2004, c. 29, s. 45.

Continuation of levies

161(3)

Notwithstanding that a levy against a credit union is reduced or refunded, in whole or in part, the guarantee corporation may subsequently continue to make prescribed levies against the credit union and collect them.

Restriction on reductions and refunds

161(4)

At the end of its fiscal year, and before any reduction or refund of a levy is allowed to be made to a credit union, the guarantee corporation shall credit any surplus in that year and debit any loss in that year to the guarantee fund and shall not reduce any levy or make any refund of a levy to a credit union that would reduce the guarantee fund below an amount to be set out in the guarantee corporation's by-laws, which in its opinion is necessary to enable it to fulfill its purposes.

S.M. 1996, c. 28, s. 67; S.M. 2004, c. 29, s. 45; S.M. 2010, c. 20, s. 35.

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).

S.M. 2021, c. 24, s. 44.

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;

(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.

Further report to Registrar

162(2)

The board of the guarantee corporation must report to the Registrar about the guarantee corporation's administration at such other times as the Registrar may require.

S.M. 1996, c. 28, s. 68; S.M. 2010, c. 20, s. 36; S.M. 2021, c. 24, s. 45.

Advertising

163

No credit union shall advertise or make representation to the public, with respect to the nature of the guarantee corporation's guarantee of members' deposits, except in accordance with the policy which the guarantee corporation may establish from time to time.

S.M. 1996, c. 28, s. 69; S.M. 2021, c. 24, s. 46.

163.1

[Not proclaimed, but repealed by S.M. 2021, c. 24, s. 121]

163.2

[Repealed]

S.M. 2010, c. 20, s. 37; S.M. 2021, c. 24, s. 47.

PART XII

THE CENTRAL

ROLE AND RESPONSIBILITIES

Application

164(1)

This Part applies to the central.

164(2) and (3)    [Repealed] S.M. 2021, c. 24, s. 50.

S.M. 2021, c. 24, s. 50.

The central continued as a body corporate

164.1

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

S.M. 2010, c. 20, s. 38; S.M. 2021, c. 24, s. 51.

Purposes of the central

165(1)

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 the central,

including educational, research, and advisory work relating to credit unions and the function of the 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 the caisse populaire.

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.

S.M. 2010, c. 20, s. 39; S.M. 2021, c. 24, s. 52.

Capacity of the central

166(1)

The central has the capacity, and subject to this Act, the rights, powers and privileges of a natural person.

Extra-territorial capacity

166(2)

Subject to the approval of the Registrar, the central has the capacity to carry on its business, conduct its affairs, and exercise its powers in any jurisdiction outside Manitoba to the extent that the laws of that jurisdiction permit.

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 53.

167(1)

[Repealed] S.M. 2021, c. 24, s. 54.

Restricted business or powers

167(2)

The central must not

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

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

Rights preserved

167(3)

No act of the central is invalid by reason only that the act is contrary to its by-laws or this Act.

S.M. 2010, c. 20, s. 41; S.M. 2021, c. 24, s. 54.

Registered office and records

168

Part IV of this Act, except subsection 18(5), applies, with the necessary changes, to the central.

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 55.

FINANCIAL MATTERS

Common shares

169(1)

The central is authorized to issue to its members an unlimited number of common shares, which shall have an issue price of $5. each.

Shares per member

169(2)

Members of the central shall be required to purchase and hold such number of shares in the central as may be required by by-law.

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 57.

Shares other than common shares

170

In addition to common shares, the articles of the central may provide for the issuance to its members of more than one class of shares, and if the articles so provide, there shall be set out therein the maximum number of shares in each class, other than common shares, that the central is entitled to issue, the total consideration to be paid for each such class of shares, and the rights, privileges, restrictions, conditions, including dividends, attached to the shares of each such class.

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 58.

Share certificates

171

Part V.2 applies, with the necessary changes, to the issuance of share certificates for shares of the central.

S.M. 1996, c. 28, s. 70; S.M. 2010, c. 20, s. 40.

Patronage refunds

172

Section 28 applies with the necessary changes to the payment of patronage refunds by the central.

S.M. 2010, c. 20, s. 40.

Use of patronage refunds

173

The central may in its by-laws provide that, in each fiscal year of the central, the whole of any patronage refund, credited to a member or associate member or such part thereof as may be prescribed in the by-laws, shall be applied to purchase on behalf of the member or associate member additional shares of the central, up to such number, if any, as may be specified in the by-laws.

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 59.

Redemption of shares and payment of dividends

174

The central shall not pay a dividend on, or redeem, shares if there are reasonable grounds for believing that

(a) the central is, or would thereby be, unable to pay its liabilities as they become due; or

(b) the realizable value of the central's assets is, or would thereby be, less than the aggregate of

(i) its liabilities, and

(ii) the amount that would, at that time, be required to pay the holders of shares that have a right to be paid, on a redemption or in a liquidation, rateably with or prior to the holders of the shares to be purchased or redeemed.

S.M. 2010, c. 20, s. 40.

Securities

175

Part V.1 applies with the necessary changes to the issuance of securities by the central.

S.M. 1996, c. 28, s. 71; S.M. 2010, c. 20, s. 40.

Voting rights

176

Section 35 applies, with the necessary changes, to all shares issued by the central.

S.M. 2010, c. 20, s. 40.

Financial matters

177(1)

Sections 37 and 44 apply, with the necessary changes, to the central.

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.

S.M. 1987-88, c. 66, s. 6; S.M. 1996, c. 28, s. 72; S.M. 2004, c. 29, s. 46; S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 60.

177.1

[Repealed]

S.M. 1996, c. 28, s. 73; S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 61.

MEMBERSHIP AND GOVERNANCE

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.

S.M. 2004, c. 29, s. 47; S.M. 2010, c. 20, s. 42.

Associate members

179(1)

The central may, in its by-laws, permit persons who are not credit unions to become associate members of the central upon such terms and conditions as are set out in its by-laws.

Rights and privileges of associate members

179(2)

An associate member of the central shall have only those rights and privileges which are specifically granted to associate members in the by-laws of the central.

S.M. 2010, c. 20, s. 43; S.M. 2021, c. 24, s. 63.

Establishment of delegate system

180(1)

The powers of the members of the central shall be vested in delegates to be elected or appointed by the members of the central in such a manner as shall be prescribed in the by-laws of the central.

Scope of powers

180(2)

Delegates elected or appointed pursuant to the by-laws of the central shall exercise fully and completely the powers, or any of them, of the members of the central and, as such, a meeting of the delegates of the central shall have the same effect in every way as a meeting of the members of the central.

Voting by delegates

180(3)

Except as otherwise provided in a by-law of the central, a delegate has only one vote on any question that may be voted at a meeting of members of the central.

S.M. 1996, c. 28, s. 74; S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 63.

Limit of liability

181

Subject to this Act, a member or associate member is not responsible for any act, default or liability whatsoever of the central or for any engagement, claim, payment, loss, injury, transaction, matter or thing whatsoever relating to or connected with the central.

S.M. 2010, c. 20, s. 40.

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.

S.M. 1996, c. 28, s. 75; S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 64.

183 and 184     [Repealed]

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 65.

Members bound by by-laws

185

The by-laws of the central bind the central and its members.

S.M. 2010, c. 20, s. 40; S.M. 2021, c. 24, s. 66.

186(1)

[Repealed] S.M. 2021, c. 24, s. 67.

Power to manage

186(2)

The directors of the central shall

(a) exercise the powers of the central directly, or indirectly through the employees and the agents of the central; and

(b) direct the management of the business and affairs of the central.

S.M. 2010, c. 20, s. 40.

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.

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) 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

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

S.M. 1996, c. 28, s. 76; S.M. 2010, c. 20, s. 44; S.M. 2021, c. 11, s. 80; S.M. 2021, c. 24, s. 68.

Application of other Parts of the Act

188(1)

Parts VII and VIII and sections 114 to 118 and 128 apply, with the necessary changes, to the central.

Non-application of clause 91(3)(f) in some cases

188(2)

Despite subsection (1), clause 91(3)(f) does not apply in respect of a contract between the central and a credit union.

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.

S.M. 2004, c. 29, s. 48; S.M. 2010, c. 20, s. 45; S.M. 2021, c. 24, s. 69.

189

[Repealed]

S.M. 1996, c. 28, s. 77; S.M. 2010, c. 20, s. 46; S.M. 2021, c. 24, s. 70.

System credit committee

190(1)

The central shall establish a credit committee as prescribed for the purpose of monitoring the credit granting procedures of credit unions in Manitoba and the credit committee shall perform those duties assigned to it pursuant to the Act and regulations.

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.

S.M. 2010, c. 20, s. 47.

CONTINUANCE OUTSIDE MANITOBA

Continuance in another jurisdiction

190.1(1)

Subject to subsections (2) to (6) and (11), the central 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)

The central 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, the central 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 the central 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 190.9.

Notice of continuance deemed to be articles

190.1(8)

For the purposes of section 190.9, 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 the central 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 the central is continued under the laws of another jurisdiction.

Restrictions on continuance outside Manitoba

190.1(11)

The central 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 the central;

(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 central 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 the central may be enforced by or against the continued body corporate.

S.M. 2010, c. 20, s. 48; S.M. 2021, c. 24, s. 72.

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.

S.M. 2021, c. 24, s. 73.

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.

S.M. 2021, c. 24, s. 73.

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.

S.M. 2021, c. 24, s. 73.

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.

S.M. 2021, c. 24, s. 73.

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.

S.M. 2021, c. 24, s. 73.

Form and content of documents

190.7

The Registrar may

(a) specify the form of any document that this Act or the regulations require a person to file with or send to the Registrar;

(b) specify the form 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.

S.M. 2004, c. 29, s. 50; S.M. 2021, c. 24, s. 101.

Proof required by Registrar

190.8(1)

The Registrar may require that a document or a fact stated in a document required by this Act to be sent to the Registrar shall be verified in accordance with subsection (2).

Form of proof

190.8(2)

A document or fact required by this Act or by the Registrar to be verified may be verified by affidavit.

Authentication

190.8(3)

The Registrar may require a credit union, the central or the guarantee corporation to authenticate a document, and the authentication may be signed by the secretary, or any director or authorized person or by the solicitor for the credit union, the central or the guarantee corporation.

S.M. 1987-88, c. 66, s. 6; S.M. 2021, c. 24, s. 97.

"Statement" defined

190.9(1)

In this section, "statement" means a statement of intent to dissolve or statement of revocation of intent to dissolve referred to in section 132.

Filings

190.9(2)

Where this Act requires that articles or a statement relating to a credit union be sent to the Registrar, unless otherwise specifically provided herein

(a) 2 duplicate originals of the articles or the statement shall be signed by a director or officer of the credit union or, in the case of articles of incorporation by the incorporators; and

(b) if the articles or statement conform to law and are accompanied by all the required by-laws or other documents and the fees in respect thereof are paid, the Registrar shall, subject, where required by this Act, to being satisfied that it is advisable,

(i) endorse on each of the 2 duplicate originals of the articles or statement the prescribed certificate indicating the date on which the articles or statement become effective,

(ii) file 1 duplicate original of the articles or statement endorsed in accordance with sub-clause (i),

(iii) send the other duplicate original of the articles or statement, endorsed in accordance with sub-clause (i), to the credit union or its representative, and

(iv) publish in The Manitoba Gazette a notice of the issue of the certificate and the date the articles or statement to which it relates become effective.

Effective date

190.9(3)

The date indicated on a certificate issued under subsection (2) as the date the articles or statement becomes effective shall not be earlier than the date on which the Registrar received the articles or statement or court order pursuant to which the certificate is issued.

Certificates, searches, etc.

190.9(4)

The Registrar may furnish any person

(a) with a certificate that a credit union or other person has or has not filed with the Registrar a document required to be filed under this Act or any other Act for which this Act was substituted; or

(b) with a certified copy of any document in the custody and control of the Registrar.

S.M. 2021, c. 24, s. 100.

Alteration

190.10

The Registrar may alter any notice or document, other than an affidavit or statutory declaration, if so authorized by or on behalf of the person who sent the notice or document to the Registrar.

S.M. 2021, c. 24, s. 102.

Corrections

190.11(1)

Where a certificate or order containing an error is issued by the Registrar, the Registrar shall issue a corrected certificate or order and may

(a) demand the surrender of the certificate or order containing the error; and

(b) request the directors or members of the credit union

(i) to pass resolutions, or

(ii) to send to the Registrar the documents required to comply with this Act,

and to take such other steps as the Registrar reasonably requires.

Date of corrected certificate

190.11(2)

A certificate or order corrected under subsection (1) shall have effect from the date of the certificate or order it replaces.

Notices

190.11(3)

Where a corrected certificate or order issued under subsection (1) materially amends the terms of the original certificate or order, the Registrar shall forthwith give notice of the correction in The Manitoba Gazette.

S.M. 2021, c. 24, s. 103.

Form of records of Registrar

190.12(1)

Records required by this Act to be prepared and maintained by the Registrar may be in bound or loose-leaf form or in photographic film form, or may be entered or recorded by any system of mechanical or electronic data processing or by any other information storage device that is capable of reproducing any required information in intelligible written form within a reasonable time.

Obligation to furnish

190.12(2)

Where records maintained by the Registrar are prepared and maintained in other than written form,

(a) the Registrar shall furnish any copy required to be furnished under subsection 223.1(2) in intelligible written form; and

(b) a report reproduced from those records, if it is certified by the Registrar, is admissible in evidence to the same extent as the original records would have been if they had been in written form.

Production of records limitation

190.12(3)

The Registrar is not required to produce any document, other than a certificate and attached articles or statement filed under section 190.9, after 6 years from the date the Registrar receives it.

S.M. 2021, c. 24, s. 105.

PART XIII

REMEDIES, OFFENCES AND PENALTIES

Definitions

191

In this Part,

"action" means an action under this Act; (« action »)

"complainant" means

(a) a member,

(b) a registered owner or beneficial owner, or former registered owner or beneficial owner, of a security of a credit union or the central,

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

(d) a creditor,

(e) the Registrar,

(f) a credit union,

(g) the central,

(h) the guarantee corporation, or

(i) any other person who, in the discretion of the court, is a proper person to make an application under this Part. (« plaignant »)

S.M. 1996, c. 28, s. 78; S.M. 2010, c. 20, s. 49; S.M. 2021, c. 24, s. 74.

Commencing derivative action

192(1)

Subject to subsection (2), a complainant may apply to the court for leave to bring an action in the name and on behalf of a credit union, or intervene in an action to which the credit union is a party, for the purpose of prosecuting, defending or discontinuing the action on behalf of the credit union.

Notice to Registrar

192(2)

A complainant under this section shall give the Registrar notice of the application, and the Registrar is entitled to appear and be heard in person or by counsel.

Conditions precedent

192(3)

No action may be brought and no intervention in an action may be made under subsection (1) unless the court is satisfied that

(a) the complainant has given reasonable notice to the directors of the credit union of the complainant's intention to apply to the court under subsection (1) if the directors of the credit union do not bring and diligently prosecute or defend, or discontinue the action;

(b) the complainant is acting in good faith; and

(c) it appears to be in the interest of the credit union that the action be brought, prosecuted, defended or discontinued, as the case may be.

Powers of court

193

In an action brought or intervened in under section 192, the court may at any time make any order it thinks fit including, without limiting the generality of the foregoing,

(a) an order authorizing the complainant or any other person to control the conduct of the action;

(b) an order giving directions for the conduct of the action;

(c) an order directing that any amount adjudged payable by the defendant in the action shall be paid, in whole or in part, directly to former and present members or other security holders of the credit union;

(d) an order requiring the credit union to pay reasonable legal fees incurred by the complainant in connection with the action;

(e) an order requiring the credit union to furnish to the complainant or to any other person all material or information relevant to the action including, without limitation,

(i) the financial statements of the credit union,

(ii) the name and address of each member of the credit union, and

(iii) the name and address of each creditor of the credit union, including any creditor with unliquidated, future or contingent claims and any person with whom the credit union has a contract.

Application to court by complainant

194(1)

A complainant may apply to the court for an order under this section.

Grounds

194(2)

Where, upon an application under subsection (1) with respect to a credit union, the central or the guarantee corporation, the court is satisfied that

(a) any act or omission of the credit union, central or guarantee corporation effects a result; or

(b) the business or affairs of the credit union, central or guarantee corporation are or have been carried on or conducted in a manner; or

(c) the powers of the directors of the credit union, central or guarantee corporation are or have been exercised in a manner;

that is unlawful, unfairly prejudicial, or that unreasonably disregards the interests of any complainant, the court may make an order to rectify the matters complained of.

Powers of the court

194(3)

In an application under this section, the court may make any interim or final order it thinks fit including, without limiting the generality of the foregoing,

(a) an order restraining the conduct complained of;

(b) an order placing the credit union under supervision within the meaning of section 209 or the central under supervision within the meaning of section 210;

(c) [repealed] S.M. 2010, c. 20, s. 50;

(d) an order to regulate the affairs of the credit union, central or guarantee corporation by amending its articles or by-laws as the case may be;

(e) an order directing an issue or exchange of securities;

(f) in the case of a credit union or the central, an order appointing directors in place of or in addition to all or any of the directors then in office;

(g) an order varying or setting aside a transaction or contract to which the credit union, central or guarantee corporation is a party, and compensating the credit union, central or guarantee corporation or any other party to the transaction or contract;

(h) an order directing rectification of the registers or other records of the credit union, central or guarantee corporation under section 196;

(i) [repealed] S.M. 2010, c. 20, s. 50;

(j) an order requiring the trial of any issue; or

(k) an order compensating a complainant or any other person.

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.

Duty of directors

194(4)

Where an order made under this section directs an amendment of the articles or by-laws of a credit union or the central,

(a) in the case of an amendment to the articles, the directors shall forthwith comply with subsection 128(4); and

(b) in the case of an amendment to the by-laws, the directors shall forthwith send to the Registrar the amended by-laws together with a certified copy of the court order;

and no other amendment to the articles or by-laws shall be made without consent of the court, until the court otherwise orders.

Exclusion

194(5)

A member of a credit union is not entitled to dissent under section 127 if an amendment to the articles is effected under this section.

S.M. 1996, c. 28, s. 79; S.M. 2010, c. 20, s. 50; S.M. 2021, c. 24, s. 75.

Evidence of member approval not decisive

195(1)

An application made or an action brought or intervened in under this Part shall not be stayed or dismissed by reason only that it is shown that an alleged breach of a right or duty owed to a credit union or the central has been or may be approved by the members thereof, but evidence of approval by the members may be taken into account by the court in making an order under this Part.

Court approval to discontinue

195(2)

An application made or an action brought or intervened in under this Part shall not be stayed, discontinued, settled or dismissed for want of prosecution without the approval of the court given upon such terms as the court thinks fit and, if the court determines that the interest of any complainant may be substantially affected by the stay, discontinuance, settlement or dismissal, the court may order any party to the application or action to give notice thereof to that complainant.

No security for costs

195(3)

A complainant is not required to give security for costs in any application made or action brought or intervened in under this Part.

Interim costs

195(4)

In an application made or an action brought or intervened in under this Part, the court may at any time order the credit union, central or guarantee corporation to pay to the complainant interim costs including legal fees and disbursements, but the complainant may be held accountable for any interim costs so paid upon final disposition of the application or action.

S.M. 1996, c. 28, s. 80; S.M. 2021, c. 24, s. 76.

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, the central or the 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.

S.M. 1996, c. 28, s. 81; S.M. 2010, c. 20, s. 51; S.M. 2021, c. 24, s. 77.

197 and 198   [Repealed]

S.M. 1996, c. 28, s. 82; S.M. 2010, c. 20, s. 52.

Compliance or restraining order

199

Where a credit union, the central or the guarantee corporation, or any director, officer, member, employee, agent, auditor, trustee, or supervisor thereof does not comply with or is acting in breach of

(a) a provision of this Act;

(b) the regulations;

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

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

(c) the articles or by-laws of the credit union or the central; or

(d) an order of the Registrar or the guarantee corporation made under this Act;

any complainant may, in addition to any other remedy the complainant has, apply to the court for an order directing compliance with or restraining the action in breach of the provision, standard, directive, articles, by-laws or order and the court may make the order and any further order it thinks fit.

S.M. 1996, c. 28, s. 83; S.M. 2021, c. 24, s. 78.

Application for directions

200

The Registrar or the guarantee corporation may apply to the court for directions in respect of any matter concerning their respective duties under this Act, and upon the application the court may give such directions and make such order as it thinks fit.

S.M. 2021, c. 24, s. 79.

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.

S.M. 2021, c. 24, s. 80.

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.

S.M. 2021, c. 24, s. 80.

203

[Repealed]

S.M. 1996, c. 28, s. 84; S.M. 2021, c. 24, s. 81.

204

[Repealed]

S.M. 2010, c. 20, s. 53; S.M. 2021, c. 24, s. 81.

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.

S.M. 2021, c. 24, s. 82.

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.

S.M. 2021, c. 24, s. 82.

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, the guarantee corporation 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.

S.M. 2010, c. 20, s. 54; S.M. 2021, c. 24, s. 83.

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.

S.M. 2010, c. 20, s. 54.

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.

S.M. 2010, c. 20, s. 54.

Order to comply

207(1)

Where a person is convicted of an offence under this Act, the convicting court may, in addition to any punishment imposed, order the person to comply with the provisions of the Act for the contravention of which that person has been convicted.

Time limited for proceedings

207(2)

A prosecution for an offence under this Act shall be instituted at any time within 2 years from the time when the subject matter of the complaint arose.

Civil remedy not affected

207(3)

No civil remedy for an act or omission under this Act is suspended or affected by reason only that the act or omission is an offence under this Act.

Suit at instance of Registrar or guarantee corporation

208

Notwithstanding anything in this Part to the contrary, where an action could be brought against a person by a credit union or the central for any loss or damage suffered by or any accounting due to the credit union or central by reason of the negligence of the person or the failure of the person to comply with this Act, or with the articles or by-laws of the credit union or central or any orders, directions or notices of the Registrar or the guarantee corporation,

(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;

and any money recovered by the Registrar or the guarantee corporation shall be held for the benefit of the credit union or central or, where a grant, loan or advance has been made by the guarantee corporation, shall be held for the benefit of the guarantee corporation.

S.M. 1996, c. 28, s. 85; S.M. 2021, c. 24, s. 84.

PART XIV

SUPERVISION

Supervision of credit union

209

If the guarantee corporation is satisfied that a credit union is carrying on its business in a manner that contravenes this Act, the regulations or the standards of sound business practice, or that is financially unsound, including those situations where

(a) a credit union is unable to pay its liabilities as they become due;

(b) the realizable value of a credit union's assets is less than the aggregate of its liabilities and the capital account of all classes of shares of the credit union, other than common shares;

(c) a credit union has requested and the guarantee corporation has determined to give it financial assistance;

(d) a credit union fails to adhere to the operating standards established pursuant to Part V of this Act;

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

(e) a credit union fails to file a report or document required to be filed by this Act within the time fixed for filing by this Act;

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.

S.M. 1996, c. 28, s. 86; S.M. 2010, c. 20, s. 55; S.M. 2021, c. 24, s. 85.

Supervision of central

210

If the guarantee corporation is satisfied that the central is carrying on its business in a manner that contravenes this Act, the regulations or the prudential standards, or that is financially unsound, including those situations where

(a) the central is unable to pay its liabilities as they become due;

(b) the realizable value of the central's assets is less than the aggregate of its liabilities and the capital account of all classes of shares of the central;

(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

(d) the central fails to file a report or document required to be filed by this Act within the time fixed for filing by this Act;

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.

S.M. 2010, c. 20, s. 56; S.M. 2021, c. 24, s. 86.

211

[Repealed]

S.M. 1996, c. 28, s. 87; S.M. 2010, c. 20, s. 57.

212

[Repealed]

S.M. 1996, c. 28, s. 87; S.M. 2021, c. 24, s. 87.

Term of supervision

213

Where a credit union or the central is declared to be under supervision, the credit union or central shall remain subject to the supervision until

(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) the guarantee corporation by notice to the credit union or central and its supervisor releases the credit union or central from supervision;

(d) the credit union is liquidated, dissolved or amalgamated; or

(e) if the credit union or the central has been placed under supervision by the court, an order of the court has been made releasing the credit union or central from supervision.

S.M. 2010, c. 20, s. 58; S.M. 2021, c. 24, s. 88.

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

(a) exercise or cause to be exercised any or all of the powers of the credit union or central;

(b) inspect the affairs of the credit union or central and make inquiries from its officers, directors, committee members, employees and members;

(c) require the credit union or central to correct any practices that in the opinion of the supervisor are contributing to the financial difficulties suffered by the credit union or central or are likely to contribute to the unsound conduct of its affairs;

(d) order the credit union or central and its directors, committee members, officers and employees to refrain from exercising in whole or in part such of the powers of the credit union or central or of its directors, committee members, officers or employees or any of them as may be specified in the order unless approved by the supervisor or the supervisor's authorized agent or employee;

(e) order the credit union or central not to declare or pay interest or dividends, or to restrict the amount of interest or dividends to be paid to a rate or an amount fixed by the supervisor;

(f) carry on, manage and conduct the operations of the credit union or central and in the name of the credit union or central preserve, maintain, realize, dispose of and add to the property of the credit union or central, receive the incomes and revenues of the credit union or central and exercise all the powers of the credit union or central and of its directors, officers, committees and employees;

(g) exclude the directors of the credit union or central and its officers, committee members, employees and agents from the property and business of the credit union;

(h) in the case of a credit union, amalgamate, dissolve, wind-up, liquidate or otherwise dispose of the business of the credit union;

(i) exercise such other powers as may be granted to it by order of the court.

Powers of supervisor on liquidation

214(2)

Sections 215 and 216 of The Corporations Act apply, with necessary changes, to the guarantee corporation in relation to liquidating assets of the credit union.

Duty of supervisor to creditors on liquidation

214(3)

A supervisor shall ensure that the interests of all creditors of a credit union or the central are properly and lawfully provided for.

S.M. 2010, c. 20, s. 59; S.M. 2021, c. 24, s. 89.

Court direction

215

A supervisor may apply to the court for direction in the exercise of any of the supervisor's powers.

S.M. 2010, c. 20, s. 60.

Accounting to Registrar

216

A supervisor shall, upon request of the Registrar and upon discharge, fully account to the Registrar for the supervision of the credit union or central.

S.M. 2010, c. 20, s. 61.

Discharge

217

Unless the Registrar or the court otherwise orders, within 30 days after completion of the final accounting under section 216, the supervisor is released from all claims by the credit union or central or any member or any creditor thereof other than claims arising out of fraud or dishonesty.

S.M. 1987-88, c. 66, s. 6.

218

[Repealed]

S.M. 1996, c. 28, s. 88; S.M. 2010, c. 20, s. 62; S.M. 2021, c. 24, s. 90.

PART XV

GENERAL

Notice to directors and members

219(1)

A notice or document that is required by this Act or the by-laws of a credit union or the central to be sent to a person entitled to receive notice from the credit union or central may be given in accordance with the by-laws or, in the absence of a provision in the by-laws, may be sent by prepaid mail addressed to, or may be delivered personally to,

(a) the person at the latest address of the person, as shown in the records of the credit union or central or its transfer agent; and

(b) in the case of a director, at the latest address of the director, as shown in the records of the credit union or central, or in the last notice filed under section 83.

Deemed receipt

219(2)

A notice or document mailed in accordance with subsection (1) is deemed to have been received by the person entitled to receive notice at the time it would be delivered in the ordinary course of mail, unless there are reasonable grounds for believing that the person did not receive the notice or document at that time or at all.

Undelivered notices

219(3)

Where a credit union or the central mails a notice or document to a person in accordance with subsection (1) and the notice or document is returned on 2 consecutive occasions because the person cannot be found, the credit union or central is not required to send any further notices or documents to the person until the credit union or central is informed, in writing, of that person's new address.

Published notices

219(4)

Where the by-laws of a credit union or the central provide for the giving of a notice to members under subsection (1) by insertion of the notice in a newspaper or other publication, the notice is deemed to have been received by the members at the time the publication containing the notice is distributed in the ordinary course.

Posted notices

219(5)

Where the by-laws of a credit union or the central provide for the giving of a notice to members under subsection (1) by posting the notice in a specified place or places, the notice is deemed to have been received by the members at the time the notice is posted.

S.M. 1996, c. 28, s. 31; S.M. 2010, c. 20, s. 63; S.M. 2021, c. 24, s. 91.

Notice to and service upon credit union and central

220

A notice or document required to be sent to or served upon a credit union or the central may be sent by registered mail to the registered office of the credit union or central shown in the last prescribed notice filed with the Registrar and, if so sent, is deemed to have been received or served at the time it would be delivered in the ordinary course of mail, unless there are reasonable grounds for believing that the credit union or central did not receive the notice or document at that time or at all.

S.M. 2021, c. 24, s. 92.

Waiver of notice

221

Where a notice or document is required by this Act to be given or sent, the giving or sending thereof may be waived or the time for the giving or sending thereof may be waived or abridged at any time with the consent in writing of the person entitled thereto.

Certificate of Registrar

222(1)

Where this Act requires or authorizes the Registrar to issue a certificate or to certify any fact, the certificate shall be signed by the Registrar or by a Deputy Registrar appointed under subsection 190.2(1).

Evidence

222(2)

A certificate referred to in subsection (1) or a certified copy thereof, when introduced as evidence in any civil, criminal or administrative action or proceeding, is conclusive proof of the facts so certified without proof of the signature or official character of the person appearing to have signed the certificate.

S.M. 2021, c. 24, s. 93.

Certificate of credit union or central

223(1)

A certificate issued on behalf of a credit union or the central stating any fact that is set out in the articles or the by-laws of the credit union or central, or in the minutes of the meetings of the directors, a committee of directors, or the members of the credit union or central, or in a trust indenture or other contract to which the credit union or central is a party may be signed by a director, officer or a transfer agent of the credit union or central.

Proof

223(2)

When introduced as evidence in any civil, criminal or administrative action or proceeding,

(a) a certificate of a kind referred to in subsection (1);

(b) a certified extract from a members register or a securities register of a credit union or the central; or

(c) a certified copy of minutes or an extract from minutes of a meeting of members or directors or a committee of directors of a credit union or the central;

is, in the absence of evidence to the contrary, proof of the facts thereby certified without proof of the signature or official character of the person appearing to have signed the certificate.

Security certificate

223(3)

An entry in a securities register of, or a security certificate issued by, a credit union or the central is, in the absence of evidence to the contrary, proof that the person in whose name the security is registered is the owner of the securities described in the register or in the certificate.

S.M. 1987-88, c. 66, s. 6; S.M. 1996, c. 28, s. 31; S.M. 2010, c. 20, s. 64; S.M. 2021, c. 24, s. 94.

Inspection

223.1(1)

A person who has paid the appropriate fee is entitled during usual business hours to examine the annual returns, notices or articles of a credit union 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.

Copies

223.1(2)

The Registrar shall furnish, upon receipt of the appropriate fee, any person with a copy or a certified copy of any document to which reference is made in subsection (1).

S.M. 1996, c. 28, s. 90; S.M. 2021, c. 24, s. 104.

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.

S.M. 2021, c. 24, s. 95.

224

[Repealed]

S.M. 2021, c. 24, s. 96.

225

[Renumbered as section 190.8]

226

[Repealed]

S.M. 2021, c. 24, s. 98.

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;

(d.1) respecting electronic meetings, including

(i) notices and the calling of electronic meetings, and

(ii) voting at electronic meetings;

(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.

S.M. 1987-88, c. 66, s. 6; S.M. 1996, c. 28, s. 89; S.M. 2004, c. 29, s. 49; S.M. 2010, c. 20, s. 65; S.M. 2021, c. 24, s. 99 (as amended by S.M. 2022, c. 4, s. 53); S.M. 2022, c. 4, s. 52.

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.

S.M. 2021, c. 24, s. 99.

228

[Renumbered as section 190.9]

228.1

[Renumbered as section 190.7]

229

[Renumbered as section 190.10]

230

[Renumbered as section 190.11]

231

[Renumbered as section 223.1]

232

[Renumbered as section 190.12]

TRANSITIONAL MATTERS

Continuation of former incorporations, etc.

233(1)

Notwithstanding the repeal of The Credit Unions and Caisses Populaires Act

(a) all articles and licences;

(b) all cancellations, suspensions, proceedings, acts, registrations and things; and

(c) all affidavits, declarations, by-laws, resolutions, regulations and documents;

shall be continued under this Act as if they had in fact been granted, issued, imposed, made, taken, done, commenced, filed or passed under this Act.

Saving clause re by-laws, etc.

233(2)

Subject to subsection (4), where any provision of the articles, by-laws or resolutions of a credit union, the central or the guarantee corporation

(a) that was in force immediately prior to the date this Act comes into force; and

(b) that was not unlawful under the law as it was immediately prior to the date this Act comes into force;

is inconsistent with the provisions of this Act, that provision is not invalid solely for that reason.

233(3)

[Repealed] S.M. 1987-88, c. 66, s. 6.

Two years to comply

233(4)

Where a provision of the articles, by-laws or resolutions of a credit union, the central or the guarantee corporation is inconsistent with the provisions of this Act, the credit union, central or guarantee corporation shall file with the Registrar amending articles, by-laws or resolutions that comply with this Act within two years after the coming into force of this Act or such longer period as may be prescribed.

Amendments

233(5)

Any addition or amendment to or deletion from any provision in the letters patent, supplementary letters patent, articles, or by-laws of a credit union, the central or the guarantee corporation shall be made in accordance with this Act.

Reference to Act

233(6)

Any reference in an Act, articles, by-laws or resolutions to The Credit Unions and Caisses Populaires Act, as it existed before the coming into force of this Act, or to any procedure under that Act, shall be deemed to be a reference to this Act and to the equivalent procedure under this Act.

S.M. 1987-88, c. 66, s. 6; S.M. 1996, c. 28, s. 91; S.M. 2010, c. 20, s. 66; S.M. 2021, c. 24, s. 107.

REPEALS, C.C.S.M. REFERENCE AND
COMING INTO FORCE

Reference in Continuing Consolidation

234

This Act may be referred to as chapter C301 in the Continuing Consolidation of the Statutes of Manitoba.

Repeal of former Act

235

The Credit Unions and Caisses Populaires Act, chapter C300 of the Continuing Consolidation of the Statutes of Manitoba is repealed.

236 and 237    [Repealed]

S.M. 2021, c. 24, s. 108.

Commencement of Act

238

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

NOTE: S.M. 1986-87, c. 5, was proclaimed in force October 15, 1987.