Bank Act (S.C. 1991, c. 46)

Marginal note:Disclosure by a bank

• 640 (1) A bank shall make available to the public such information concerning

  • (a) the compensation of its executives, as that expression is defined by the regulations, and

  • (b) its business and affairs for the purposes of the analysis of its financial condition,

  in such form and manner and at such times as may be required by or pursuant to such regulations as the Governor in Council may make for the purpose.

• Marginal note:Exemption by regulation

  (2) Paragraph (1)(a) does not apply to a bank that is within such class or classes of banks as may be prescribed.

Marginal note:Exceptions to disclosure

641 Subject to any regulations made under paragraph 627.998(n), no information obtained by a bank regarding any of its customers shall be disclosed or made available under subsection 639(1) or section 640.

Marginal note:Report respecting disclosure

642 The Superintendent shall prepare a report, to be included in the report referred to in section 40 of the Office of the Superintendent of Financial Institutions Act, respecting the disclosure of information by banks and describing the state of progress made in enhancing the disclosure of information in the financial services industry.

Inspection of Banks

Marginal note:Examination of banks

• 643 (1) The Superintendent, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry into the business and affairs of each bank that the Superintendent considers to be necessary or expedient to determine whether the bank is complying with the provisions of this Act, whether the bank is in a sound financial condition and whether the bank has adequate policies and procedures to protect itself against threats to its integrity or security. After the conclusion of each examination and inquiry, the Superintendent shall report on it to the Minister.

• (1.1) [Repealed, 2023, c. 26, s. 556]

• Marginal note:Access to records of bank

  (2) The Superintendent or a person acting under the Superintendent’s direction

  • (a) has a right of access to any records, cash, assets and security held by or on behalf of a bank; and

  • (b) may require the directors, officers and the auditor or auditors of a bank to provide information and explanations, to the extent that they are reasonably able to do so, in respect of the condition and affairs of the bank or any entity in which the bank has a substantial investment.

Marginal note:Power of Superintendent on inquiry

644 The Superintendent has all the powers of a person appointed as a commissioner under Part II of the Inquiries Act for the purpose of obtaining evidence under oath, and may delegate those powers to any person acting under the Superintendent’s direction.

Remedial Powers

Prudential Agreements

Marginal note:Prudential agreement

644.1 The Superintendent may enter into an agreement, called a “prudential agreement”, with a bank for the purposes of implementing any measure designed to maintain or improve its safety and soundness or establishing adequate policies and procedures to protect it against threats to its integrity or security.

Directions of Compliance

Marginal note:Superintendent’s directions to bank

• 645 (1) Where, in the opinion of the Superintendent, a bank, or a person with respect to a bank, is committing, or is about to commit, an act that is an unsafe or unsound practice in conducting the business of the bank, or is pursuing or is about to pursue any course of conduct that is an unsafe or unsound practice in conducting the business of the bank, the Superintendent may direct the bank or person to

  • (a) cease or refrain from committing the act or pursuing the course of conduct; and

  • (b) perform such acts as in the opinion of the Superintendent are necessary to remedy the situation.

• Marginal note:Directions — policies and procedures

  (1.1) If, in the opinion of the Superintendent, a bank does not have adequate policies and procedures to protect itself against threats to its integrity or security, the Superintendent may direct the bank to take any measures that in the opinion of the Superintendent are necessary to remedy the situation.

• Marginal note:Opportunity for representations

  (2) Subject to subsection (3), no direction shall be issued to a bank or person under subsection (1) or (1.1) unless the bank or person is provided with a reasonable opportunity to make representations in respect of the matter.

• Marginal note:Temporary direction

  (3) If, in the opinion of the Superintendent, the length of time required for representations to be made under subsection (2) might be prejudicial to the public interest, the Superintendent may make a temporary direction with respect to the matters referred to in paragraphs (1)(a) and (b) or subsection (1.1) having effect for a period of not more than 15 days.

• Marginal note:Continued effect

  (4) A temporary direction under subsection (3) continues to have effect after the expiration of the fifteen day period referred to in that subsection if no representations are made to the Superintendent within that period or, if representations have been made, the Superintendent notifies the bank or person that the Superintendent is not satisfied that there are sufficient grounds for revoking the direction.

Marginal note:Court enforcement

• 646 (1) Where a bank or person

  • (a) is contravening or has failed to comply with a prudential agreement entered into under section 644.1 or a direction of the Superintendent made under subsection 645(1), (1.1) or (3),

  • (b) is contravening this Act, or

  • (c) has omitted to do any thing under this Act that is required to be done by or on the part of the bank or person,

  the Superintendent may, in addition to any other action that may be taken under this Act, apply to a court for an order requiring the bank or person to comply with the prudential agreement or the direction, cease the contravention or do any thing that is required to be done, and on such application the court may so order and make any other order it thinks fit.

• Marginal note:Appeal

  (2) An appeal from a decision of a court under subsection (1) lies in the same manner, and to the same court, as an appeal from any other order of the court.

Disqualification and Removal of Directors or Senior Officers

Meaning of senior officer

646.1 In sections 647 and 647.1, senior officer means the chief executive officer, secretary, treasurer or controller of a bank or any other officer reporting directly to the bank’s board of directors or chief executive officer.

Marginal note:Application

• 647 (1) This section applies only in respect of a bank

  • (a) that has been notified by the Superintendent that this section applies to it where the bank is subject to measures designed to maintain or improve its safety and soundness, which measures

    • (i) have been specified by the Superintendent by way of conditions or limitations in respect of the order approving the commencement and carrying on of the bank’s business, or

    • (ii) are contained in a prudential agreement entered into under section 644.1 or an undertaking given by the bank to the Superintendent; or

  • (b) that is the subject of a direction made under section 645 or an order made under subsection 485(3).

• Marginal note:Information to be provided

  (2) A bank shall provide the Superintendent with the name of

  • (a) each person who has been nominated for election or appointment as a member of its board of directors,

  • (b) each person who has been selected by the bank for appointment as a senior officer, and

  • (c) each person who is newly elected as a director of the bank and who was not proposed for election by anyone involved in the management of the bank,

  together with such other information about the background, business record and experience of the person as the Superintendent may require.

• Marginal note:When information to be provided

  (3) The information required by subsection (2) shall be provided to the Superintendent

  • (a) at least thirty days prior to the date or proposed date of the election or appointment or within such shorter period as the Superintendent may allow; or

  • (b) in the case of a person referred to in paragraph (2)(c), within fifteen days after the date of the election of the person.

• Marginal note:Disqualification or removal

  (4) If the Superintendent is of the opinion that, on the basis of the competence, business record, experience, conduct or character of a person, he or she is not suitable to hold that position, the Superintendent may, by order,

  • (a) in the case of a person referred to in paragraph (2)(a) or (b), disqualify the person from being elected or appointed as a director of a bank or from being appointed as a senior officer; or

  • (b) in the case of a person referred to in paragraph (2)(c), remove the person from office as a director of the bank.

• Marginal note:Risk of prejudice

  (4.1) In forming an opinion under subsection (4), the Superintendent must consider whether the interests of the depositors and creditors of the bank would likely be prejudiced if the person were to take office or continue to hold office, as the case may be.

• Marginal note:Representations may be made

  (5) The Superintendent must in writing notify the person concerned and the bank of any action that the Superintendent proposes to take under subsection (4) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

• Marginal note:Prohibition

  (6) Where an order has been made under subsection (4)

  • (a) disqualifying a person from being elected or appointed to a position, the person shall not be, and the bank shall not permit the person to be, elected or appointed to the position; or

  • (b) removing a director from office, the person shall not continue to hold, and the bank shall not permit the person to continue to hold, office as a director.

Marginal note:Removal of directors or senior officers

• 647.1 (1) The Superintendent may, by order, remove a person from office as a director or senior officer of a bank if the Superintendent is of the opinion that the person is not suitable to hold that office

  • (a) on the basis of the competence, business record, experience, conduct or character of the person; or

  • (b) because the person has contravened or, by action or negligence, has contributed to the contravention of

    • (i) this Act or the regulations made under it,

    • (ii) a direction made under section 645,

    • (iii) an order made under subsection 485(3),

    • (iv) a condition or limitation in respect of the order approving the commencement and carrying on of the bank’s business, or

    • (v) a prudential agreement entered into under section 644.1 or an undertaking given by the bank to the Superintendent.

• Marginal note:Risk of prejudice

  (2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors and creditors of the bank have been or are likely to be prejudiced by the person’s holding office as a director or senior officer.

• Marginal note:Representations may be made

  (3) The Superintendent must in writing notify the person concerned and the bank of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.

• Marginal note:Suspension

  (4) If the Superintendent is of the opinion that the public interest may be prejudiced by the director or senior officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the director or senior officer. The suspension may not extend beyond 10 days after the expiration of that period.

• Marginal note:Notice of order

  (5) The Superintendent shall, without delay, notify the director or senior officer, as the case may be, and the bank of a removal order or suspension order.

• Marginal note:Consequences of removal order

  (6) The director or senior officer, as the case may be, ceases to hold that office as of the date the removal order is made or any later date specified in the order.

• Marginal note:Appeal

  (7) The director or senior officer, as the case may be, or the bank may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.

• Marginal note:Powers of Federal Court

  (8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.

• Marginal note:Order not stayed by appeal

  (9) A removal order is not stayed by an appeal.

Supervisory Intervention

Marginal note:Superintendent may take control

• 648 (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of a bank, the Superintendent may

  • (a) take control, for a period not exceeding sixteen days, of the assets of the bank and the assets under its administration; or

  • (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,

    • (i) take control, for a period exceeding sixteen days, of the assets of the bank and the assets under its administration,

    • (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph, or

    • (iii) take control of the bank.

• Marginal note:Circumstances for taking control

  (1.1) Control by the Superintendent under subsection (1) may be taken in respect of a bank where

  • (a) the bank has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (b) [Repealed, 2001, c. 9, s. 182]

  • (c) the assets of the bank are not, in the opinion of the Superintendent, sufficient to give adequate protection to the bank’s depositors and creditors;

  • (d) any asset appearing on the books or records of the bank or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;

  • (e) the regulatory capital of the bank has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its depositors or creditors;

  • (f) the bank has failed to comply with an order of the Superintendent under paragraph 485(3)(a);

  • (g) the bank’s deposit insurance has been terminated by the Canada Deposit Insurance Corporation;

  • (g.1) in the opinion of the Superintendent, the bank’s depositors and creditors may be detrimentally affected because all of the common shares or membership shares of the bank must be disposed of under a direction made by the Minister or because there is a prohibition under this Act in respect of the exercise of the right to vote attached to all of the common shares or membership shares of the bank;

  • (h) in the opinion of the Superintendent, any other state of affairs exists in respect of the bank that may be materially prejudicial to the interests of the bank’s depositors or creditors or the owners of any assets under the bank’s administration, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the holding body corporate of the bank;

  • (i) in the opinion of the Superintendent, the continued operation of the bank by the directors of the bank or by the officers of the bank responsible for its management would be materially prejudicial to its integrity or security; or

  • (j) in the opinion of the Superintendent, the continued operation of the bank by the directors of the bank or by the officers of the bank responsible for its management would pose a risk to national security.

• Marginal note:Minister’s powers

  (1.11) Subject to this Act, the Minister may, for reasons related to national security, direct the Superintendent to

  • (a) take control, for a period not exceeding 16 days, of the assets of the bank and the assets under its administration;

  • (b) take control, for a period exceeding 16 days, of the assets of the bank and the assets under its administration;

  • (c) if control of assets has been taken under paragraph (a), continue the control beyond the 16 days referred to in that paragraph; or

  • (d) take control of the bank.

• Marginal note:Notice of proposed action

  (1.2) The Superintendent must notify a bank of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding ten days after it receives the notice.

• Marginal note:Notice — up to 16 days

  (1.3) If the Superintendent takes control of the assets of the bank under paragraph (1.11)(a), the Superintendent shall notify the bank that control has been taken at the direction of the Minister.

• Marginal note:Notice — more than 16 days

  (1.4) If the Minister is considering whether to exercise the powers under any of paragraphs (1.11)(b) to (d), the Superintendent shall notify the bank of the action that is being considered and of its right to make written representations to the Minister within the time specified in the notice, not exceeding 10 days after it receives the notice.

• Marginal note:Notice — Committee and Review Agency

  (1.5) Within 30 days after exercising any of the powers under subsection (1.11), the Minister shall notify

  • (a) the Committee, as defined in section 2 of the National Security and Intelligence Committee of Parliamentarians Act; and

  • (b) the Review Agency, as defined in section 2 of the National Security and Intelligence Review Agency Act.

• Marginal note:Objectives of Superintendent

  (2) If the Superintendent has control under subsection (1) or (1.11) of the assets of a bank referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the bank.

• Marginal note:Powers of Superintendent

  (3) If the Superintendent has control under subsection (1) or (1.11) of the assets of a bank referred to in that subsection,

  • (a) the bank shall not make, acquire or transfer any loan or make any purchase, sale or exchange of securities or any disbursement or transfer of cash of any kind without the prior approval of the Superintendent or a representative designated by the Superintendent; and

  • (b) no director, officer or employee of the bank shall have access to any cash or securities held by the bank unless

    • (i) a representative of the Superintendent accompanies the director, officer or employee, or

    • (ii) the access is previously authorized by the Superintendent or the Superintendent’s representative.