Cooperative Credit Associations Act

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.

• Marginal note:Exception

  (3) Paragraph (1)(a) does not apply in respect of a guarantee given on behalf of a central, within the meaning of section 472, or a local cooperative credit society if the payment guaranteed represents the obligation of the central or the local cooperative credit society to settle for payment items in accordance with the by-laws and rules of the Canadian Payments Association.

• Marginal note:Regulations

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