Cooperative Credit Associations Act — C-41.01 420
Directors and officers and their interests 420 (1) Subject to subsection (2) and sections 421 and 422, an association may enter into any transaction with a related party of the association if the related party is (a) a natural person who is a related party of the association only because the person is (i) a director or senior officer of the association or of an entity that controls the association, or (ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer of the association or of an entity that controls the association; or (b) an entity that is a related party of the association only because the entity is controlled by (i) a director or senior officer of the association or of an entity that controls the association, or (ii) the spouse or common-law partner, or a child who is less than eighteen years of age, of a director or senior officer of the association or of an entity that controls the association. Loans to full-time senior officers (2) An association may, with respect to a related party of the association referred to in subsection (1) who is a full-time senior officer of the association, make, take an assignment of or otherwise acquire a loan to the related party only if the aggregate principal amount of all outstanding loans to the related party that are held by the association and its subsidiaries, together with the principal amount of the proposed loan, does not exceed the greater of twice the annual salary of the related party and $100,000. Exception (3) Subsection (2) does not apply in respect of (a) loans referred to in paragraph 415(b), and (b) margin loans referred to in section 422, and the amount of any such loans to a related party of an association shall not be included in determining, for the purposes of subsection (2), the aggregate principal amount of all outstanding loans made by the association to the related party. Preferred terms — loan to senior officer (4) Notwithstanding section 425, an association may make a loan, other than a margin loan, to a senior officer of the association on terms and conditions more favourable to the officer than market terms and conditions, as defined in subsection 425(2), if those terms and conditions of the loan have been approved by the conduct review committee of the association. Preferred terms — loan to spouse or common-law partner of senior officer (4.1) Despite section 425, an association may make a loan referred to in paragraph 415(b) to the spouse or common-law partner of a senior officer of the association on terms and conditions more favourable than market terms and conditions, as defined in subsection 425(2), by the association if those terms and conditions have been approved by the conduct review committee of the association. Preferred terms — other financial services (5) Despite section 425, an association may offer financial services, other than loans or guarantees, to a senior officer of the association, or to the spouse or common-law partner, or to a child who is less than eighteen years of age, of a senior officer of the association, on terms and conditions more favourable than market terms and conditions, as defined in subsection 425(2), if (a) the financial services are offered by the association to employees of the association on those favourable terms and conditions; and (b) the conduct review committee of the association has approved the practice of making those financial services available on those favourable terms and conditions to senior officers of the association or to the spouses or the common-law partners, or to the children under eighteen years of age, of senior officers of the association. 1991, c. 48, s. 420; 1997, c. 15, s. 153; 2000, c. 12, s. 86; 2001, c. 9, s. 319