Cooperative Credit Associations Act (S.C. 1991, c. 48)

Marginal note:Networking

377 Subject to section 381, an association may

• (a) act as agent for any entity referred to in paragraph 375(1)(a), any member of a cooperative credit society or, if the association is a retail association, any other person in respect of the provision of any service that is provided by a financial institution, a permitted entity as defined in subsection 386(1) or a prescribed entity and may enter into an arrangement with any person in respect of the provision of that service; or

• (b) refer any person to any such financial institution or entity.

Marginal note:Restriction on fiduciary activities

378 No association shall act in Canada as

• (a) an executor, administrator or official guardian or a guardian, tutor, curator, judicial adviser or committee of a mentally incompetent person; or

• (b) a trustee for a trust.

Marginal note:Restriction on deposit taking

• 378.1 (1) A retail association shall not accept deposits in Canada unless

  • (a) it is a member institution as defined in section 2 of the Canada Deposit Insurance Corporation Act;

  • (b) it has been authorized under subsection 26.03(1) of that Act to accept deposits without being a member institution, as defined in section 2 of that Act; or

  • (c) the order approving the commencement and carrying on of business by the retail association authorizes it to accept deposits solely in accordance with subsection (2).

• Marginal note:Deposits that fall below $150,000

  (2) A retail association referred to in paragraph (1)(b) or (c) shall ensure that, on each day that is at least 30 days after it receives the authorization referred to in that paragraph,

  A/B ≤ 0.01

  where

  A

  is the sum of all amounts each of which is the sum of all the deposits held by it at the end of a day in the preceding 30 days each of which deposits is less than $150,000 and payable in Canada; and

  B

  is the sum of all amounts each of which is the sum of all deposits held by it at the end of a day in those preceding 30 days and payable in Canada.

• Marginal note:Exchange rate

  (3) For the purpose of subsection (2), the rate of exchange to be applied on any day in determining the amount in Canadian dollars of a deposit in a currency of a country other than Canada is to be determined in accordance with rules prescribed under subsection 26.03(2) of the Canada Deposit Insurance Corporation Act.

• Definition of deposit

  (4) For the purpose of subsection (2), deposit has the meaning that would be given to it by the schedule to the Canada Deposit Insurance Corporation Act for the purposes of deposit insurance if that schedule were read without reference to subsections 2(2), (5) and (6) of that schedule, but does not include prescribed deposits.

• Marginal note:Regulations

  (5) The Governor in Council may make regulations

  • (a) prescribing the deposits referred to in subsection (4); and

  • (b) prescribing terms and conditions with respect to the acceptance of those deposits.

Marginal note:Notice before opening account or providing prescribed product

• 378.2 (1) Before a retail association referred to in paragraph 378.1(1)(b) or (c) opens a deposit account in Canada or provides in Canada any prescribed product that relates to a deposit, the retail association shall, in the prescribed manner, give the person requesting the opening of the account or the provision of the product

  • (a) a notice in writing that deposits to the deposit account, or that the deposit that relates to the prescribed product, as the case may be, will not be insured by the Canada Deposit Insurance Corporation or, if the request is made by telephone, a verbal notice to that effect; and

  • (b) any other information that may be prescribed.

• Marginal note:Other notice

  (2) A retail association referred to in paragraph 378.1(1)(b) or (c) shall, in accordance with any regulations that may be made,

  • (a) post notices at all of its branches, and at prescribed points of service, in Canada where deposits are accepted, and on all of its websites at which deposits are accepted in Canada, to inform the public that deposits with the association are not insured by the Canada Deposit Insurance Corporation; and

  • (b) include in its advertisements notices to inform the public that deposits with the retail association are not insured by the Canada Deposit Insurance Corporation.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations

  • (a) prescribing the manner in which notices referred to in subsection (1) are to be given and the additional information to be contained in the notices; and

  • (b) respecting notices for the purpose of subsection (2).

Marginal note:Deposits less than $150,000

• 378.3 (1) Subject to the regulations, a retail association referred to in paragraph 378.1(1)(b) or (c) may not, in respect of its business in Canada, act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

• Meaning of deposit

  (2) In this section, deposit has the meaning assigned to that term by subsection 378.1(4).

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the circumstances in which, and the conditions under which, a retail association referred to in subsection (1) may act as agent for any person in the taking of a deposit that is less than $150,000 and payable in Canada.

Marginal note:Shared premises

• 378.4 (1) Subject to the regulations, no retail association referred to in paragraph 378.1(1)(b) or (c) shall carry on business in Canada on premises that are shared with those of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the retail association.

• Marginal note:Limitation

  (2) Subsection (1) only applies in respect of premises or any portion of premises on which both the retail association and the member institution carry on business with the public and to which the public has access.

• Marginal note:Adjacent premises

  (3) Subject to the regulations, no retail association referred to in paragraph 378.1(1)(b) or (c) shall carry on business in Canada on premises that are adjacent to a branch or office of a member institution, within the meaning of section 2 of the Canada Deposit Insurance Corporation Act, that is affiliated with the retail association, unless the retail association clearly indicates to its customers that its business and the premises on which it is carried on are separate and distinct from the business and premises of the affiliated member institution.

• Marginal note:Regulations

  (4) The Governor in Council may make regulations

  • (a) respecting the circumstances in which, and the conditions under which, a retail association referred to in paragraph 378.1(1)(b) or (c) may carry on business in Canada on premises that are shared with those of a member institution referred to in subsection (1); and

  • (b) respecting the circumstances in which, and the conditions under which, a retail association referred to in paragraph 378.1(1)(b) or (c) may carry on business in Canada on premises that are adjacent to a branch or office of a member institution referred to in subsection (3).

Marginal note:Restriction on guarantees

• 379 (1) An association shall not guarantee on behalf of any person the payment or repayment of any sum of money unless

  • (a) the sum of money is a fixed sum of money with or without interest thereon; and

  • (b) the person on whose behalf the association has undertaken to guarantee the payment or repayment has an unqualified obligation to reimburse the association for the full amount of the payment or repayment to be guaranteed.

• Marginal note:Exception

  (2) Paragraph (1)(a) does not apply where the person on whose behalf the association has undertaken to guarantee a payment or repayment is a subsidiary of the association.

• (3) [Repealed, 2014, c. 39, s. 287]

• Marginal note:Regulations

  (4) The Governor in Council may make regulations imposing terms and conditions in respect of guarantees permitted by this section.

Marginal note:Restriction — liquidity support

379.1 An association shall not provide any prescribed form of liquidity support for central cooperative credit societies or local cooperative credit societies except in accordance with prescribed terms and conditions.

Marginal note:Restriction on securities activities

380 An association shall not deal in Canada in securities to the extent prohibited or restricted by such regulations as the Governor in Council may make for the purposes of this section.

Marginal note:Prohibition

• 380.1 (1) It is prohibited for an association to issue a debt obligation in relation to which the amounts of principal and interest owing are guaranteed to be paid from loans or other assets held by an entity that is created and organized for the principal purpose of holding those loans or other assets and with the intention of legally isolating those loans or other assets from the association, unless

  • (a) the debt obligation is a covered bond as defined in section 21.5 of the National Housing Act;

  • (b) the association is a registered issuer as defined in section 21.5 of that Act other than one whose right to issue covered bonds has been suspended; and

  • (c) the debt obligation is issued under a registered program as defined in section 21.5 of that Act.

• Marginal note:Exception

  (2) The Governor in Council may make regulations exempting any type of debt obligation from the application of subsection (1).

Marginal note:Restriction on insurance business

• 381 (1) An association shall not undertake the business of insurance except to the extent permitted by this Act or the regulations.

• Marginal note:Restriction on acting as agent

  (2) An association shall not act in Canada as agent for any person in the placing of insurance and shall not lease or provide space in its offices in Canada to any person engaged in the placing of insurance.

• Marginal note:Regulations

  (3) The Governor in Council may make regulations respecting the matters referred to in subsection (1) and regulations respecting relations between associations and

  • (a) entities that undertake the business of insurance; or

  • (b) insurance agents or insurance brokers.

• Marginal note:Saving

  (4) Nothing in this section precludes an association from

  • (a) requiring insurance to be placed by a borrower for the security of the association; or

  • (b) obtaining group insurance for its employees or the employees of its members or of any bodies corporate in which it has a substantial investment pursuant to section 390.

• Marginal note:No pressure

  (5) No association shall exercise pressure on a borrower to place insurance for the security of the association with any particular insurance company, but an association may require that an insurance company chosen by a borrower meet with its approval, which shall not be unreasonably withheld.

• Definition of business of insurance

  (6) In this section, business of insurance includes

  • (a) the issuance of any annuity if the liability in respect of the annuity is contingent on the death of a person; and

  • (b) the issuance of any debt obligation, any of whose terms and conditions are established on the basis of mortality considerations, under which the issuer is obliged to make periodic payments.