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

Marginal note:Disclosure by Superintendent

• 436 (1) The Superintendent shall disclose at such times and in such manner as the Minister may determine, such information obtained by the Superintendent under this Act as the Minister considers ought to be disclosed for the purposes of the analysis of the financial condition of an association and that

  • (a) is contained in returns filed pursuant to the Superintendent’s financial regulatory reporting requirements in respect of associations; or

  • (b) has been obtained as a result of an industry-wide or sectoral survey conducted by the Superintendent in relation to an issue or circumstances that could have an impact on the financial condition of associations.

• Marginal note:Prior consultation required

  (2) The Minister shall consult with the Superintendent before making any determination under subsection (1).

Marginal note:Disclosure by an association

436.1 An association 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 purpose 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:Exceptions to disclosure

436.2 No information obtained by an association regarding any of its customers shall be disclosed or made available under subsection 436(1) or section 436.1.

Marginal note:Report respecting disclosure

436.3 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 associations and describing the state of progress made in enhancing the disclosure of information in the financial services industry.

Inspection of Associations

Marginal note:Examination of associations

• 437 (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 association that the Superintendent considers to be necessary or expedient to determine whether the association is complying with the provisions of this Act and whether the association is in a sound financial condition and, after the conclusion of each examination and inquiry, shall report on it to the Minister.

• Marginal note:Access to records of association

  (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 an association; and

  • (b) may require the directors, officers and auditor of an association 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 association or any entity in which the association has a substantial investment.

Marginal note:Power of Superintendent on inquiry

438 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

438.1 The Superintendent may enter into an agreement, called a “prudential agreement”, with an association for the purposes of implementing any measure designed to maintain or improve its safety and soundness.

Directions of Compliance

Marginal note:Superintendent’s directions to association

• 439 (1) Where, in the opinion of the Superintendent, an association, or a person with respect to an association, is committing, or is about to commit, an act that is an unsafe or unsound practice in conducting the business of the association, 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 association, the Superintendent may direct the association 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:Opportunity for representations

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

• Marginal note:Temporary direction

  (3) Where, 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) having effect for a period of not more than fifteen days.

• Marginal note:Idem

  (4) Subject to section 440, 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 association or person that the Superintendent is not satisfied that there are sufficient grounds for revoking the direction.

440 [Repealed, 1996, c. 6, s. 58]

Marginal note:Court enforcement

• 441 (1) Where an association or person

  • (a) is contravening or has failed to comply with a prudential agreement entered into under section 438.1 or a direction of the Superintendent issued to the association or person pursuant to subsection 439(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 association 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 association 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

441.01 In sections 441.1 and 441.2, senior officer means the chief executive officer, secretary, treasurer, controller of an association or any other officer reporting directly to the association’s board of directors or chief executive officer.

Marginal note:Application

• 441.1 (1) This section applies only in respect of an association

  • (a) that has been notified by the Superintendent that this section applies to it where the association 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 association’s business, or

    • (ii) are contained in a prudential agreement entered into under section 438.1 or an undertaking given by the association to the Superintendent; or

  • (b) that is the subject of a direction made under section 439 or an order made under subsection 409(3).

• Marginal note:Information to be provided

  (2) An association 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, and

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

  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 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.

• Marginal note:Disqualification

  (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, disqualify the person from being elected or appointed as a director of an association or from being appointed as a senior officer.

• 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 association 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 association 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) disqualifying a person from being elected or appointed to a position, the person shall not be, and the association shall not permit the person to be, elected or appointed to the position.

Marginal note:Removal of directors or senior officers

• 441.2 (1) The Superintendent may, by order, remove a person from office as a director or senior officer of an association 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 439,

    • (iii) an order made under subsection 409(3),

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

    • (v) a prudential agreement entered into under section 438.1 or an undertaking given by the association 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 association 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 association 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 association 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 association 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

• 442 (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of an association, the Superintendent may

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

    • (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 association.

• Marginal note:Circumstances for taking control

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

  • (a) the association 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. 335]

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

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

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

  • (f) the association has failed to comply with an order of the Superintendent under paragraph 409(3)(a);

  • (g) in the case of a retail association, the association’s deposit insurance has been terminated by the Canada Deposit Insurance Corporation; or

  • (h) in the opinion of the Superintendent, any other state of affairs exists in respect of the association that may be materially prejudicial to the interests of the depositors or creditors of the association or to those of the owners of any assets under the association’s administration.

• Marginal note:Notice of proposed action

  (1.2) The Superintendent must notify an association 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 10 days after it receives the notice.

• Marginal note:Objectives of Superintendent

  (2) If, pursuant to subsection (1), the Superintendent has control of the assets of an association 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 association.

• Marginal note:Powers of Superintendent

  (3) Where, pursuant to subsection (1), the Superintendent has control of the assets of an association referred to in that subsection,

  • (a) the association shall not make, acquire or transfer any loan or make any purchase, sale or exchange of membership shares or 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 association shall have access to any cash or securities held by or under the administration of the association 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.