jswizzle3737/ontario_laws_and_regs huggingface dataset:
71 (1) The Chief Executive Officer shall issue a receipt for an offering statement unless it appears to the Chief Executive Officer that, (a)  the statement or any document accompanying it, (i)  fails to comply in any substantial respect with this Act or the regulations, (ii)  contains any statement, promise, estimate or forecast that is misleading, false or deceptive, (iii)  contains an extract from an opinion or statement of an expert that does not fairly represent the opinion or statement, or (iv)  conceals or omits to state any material facts necessary in order to make any statement contained in the offering statement not misleading in light of the circumstances in which it was made; (b)  the proceeds from the sale of the securities are insufficient, together with the other resources of the credit union, to accomplish the purpose of the issue that is stated in the offering statement; or (c)  it would not be in the public interest to issue a receipt for the offering statement. Refusal to issue, revocation (2) The Chief Executive Officer may refuse to issue or may revoke a receipt for an offering statement in any of the following circumstances: 1.  The credit union is in contravention of section 77. 2.  The credit union is subject to the supervision of the Chief Executive Officer or under the administration of the Chief Executive Officer. Same (3) Before refusing to issue a receipt or revoking a receipt, the Chief Executive Officer shall give the applicant an opportunity to make written submissions. Same (4) A decision to refuse to issue a receipt or a decision to revoke a receipt must be given in writing and must include the reasons for the refusal or revocation. Expiry of receipt (5) A receipt for an offering statement expires on the earlier of, (a)  the date that is six months after the day it is issued; and (b)  the date on which the offering of securities contemplated by the offering statement for which the receipt is granted is closed in accordance with the offering statement.
72 (1) Application for renewal of the receipt for an offering statement may be made by filing an application with the Chief Executive Officer with a copy of the statement and paying the fee established by Authority rule. Time for application (2) Application for renewal must be made before the receipt for the offering statement expires. Receipt (3) Section 71 applies, with necessary modifications, with respect to the renewal of a receipt.
73 (1) If there is a material change in the facts set out in an offering statement, the credit union shall file with the Chief Executive Officer, (a)  an amendment to the offering statement, if no receipt has been issued for the statement; or (b)  a statement of material change, if a receipt has been issued for the offering statement and the receipt has not been revoked or expired. 2020, c. 36, Sched. 7, s. 73 (1). Time (2) The credit union shall give the Chief Executive Officer the amendment or statement of material change promptly and, in any event, within ten days after the date on which the material change occurred. 2020, c. 36, Sched. 7, s. 73 (2). Notice to persons (3) The credit union shall give a copy of the amendment or statement of material change to every person to whom it gave a copy of the offering statement. 2020, c. 36, Sched. 7, s. 73 (3). Replacement statement (4) A credit union may, and if requested to do so by the Chief Executive Officer, shall file with the Chief Executive Officer a new offering statement instead of one or more statements of material change. 2020, c. 36, Sched. 7, s. 73 (4). Contents (5) Sections 70 and 71 apply with respect to a statement of material change as if it were an offering statement. 2020, c. 36, Sched. 7, s. 73 (5). (6) Repealed: 2021, c. 40, Sched. 5, s. 5. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 5 - 01/03/2022
74 (1) A credit union shall give a copy of an offering statement or statement of material change to each member that requests a copy of one. Same (2) A person who offers a security in a credit union for sale shall give a copy of the offering statement and statement of material change, if any, to a prospective purchaser upon request and to a purchaser. Withdrawal from purchase (3) An agreement of purchase and sale in respect of securities is not binding on the purchaser if the person from whom the purchaser has agreed to purchase the security receives written notice of the purchaser’s intention not to be bound by the agreement not later than midnight on the second business day after receipt by the purchaser of the latest offering statement and any statement of material change. Same (4) Subsection (3) applies with necessary modifications in respect of a person who is subscribing for securities to be issued by a credit union. Business day (5) In subsection (3), “business day” means a day that is not, (a)  Saturday, or (b)  Sunday or any other holiday, other than Easter Monday and Remembrance Day.
75 (1) If an offering statement or a statement of material change contains a misrepresentation, a purchaser of a security shall be deemed to have relied upon the misrepresentation if it was a misrepresentation when the purchase was made. Exception (2) Subsection (1) does not apply if the purchaser knew about the misrepresentation when purchasing the security. Right of action (3) The purchaser has a right of action for damages against, (a)  the credit union; (b)  every person, other than an employee of a credit union, who sells the security on behalf of the credit union; (c)  every director of the credit union at the time the offering statement or statement of material change was filed with the Chief Executive Officer; (d)  every person whose consent has been filed pursuant to a requirement of the regulations but only with respect to reports, opinions or statements that have been made by them; and (e)  every person who signed the offering statement or statement of material change other than the persons included in clauses (a) to (d). Same (4) If the purchaser purchased the security from a credit union, the purchaser may elect to exercise a right of rescission against the credit union, in which case the purchaser has no right of action for damages against the credit union. Defence (5) A person who signed the disclosure certificate required under subsection 70 (4) or a director is not liable under this section if the person proves one of the following: 1.  The offering statement or statement of material change was filed with the Chief Executive Officer without the person’s knowledge or consent.  As soon as the person became aware that it had been filed with the Chief Executive Officer, the person advised the Chief Executive Officer that it was filed with the Chief Executive Officer without the person’s knowledge or consent. 2.  The person was not aware of the misrepresentation when the offering statement or material change statement was filed with the Chief Executive Officer. After the receipt for the statement was issued but before the purchaser bought the security, the person immediately after the person became aware of the misrepresentation advised the Chief Executive Officer that the person withdrew consent to the filing of the statement with the Chief Executive Officer. 3.  The person had no reasonable grounds to believe, and did not believe, that there had been a misrepresentation. Interpretation (6) In this section, “misrepresentation” means, (a)  an untrue statement of material fact, or (b)  an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Restriction on Commission for Purchase or Sale
76 None of the following persons shall charge or accept payment of a commission on the purchase or sale of a security of a credit union: 1.  The directors, officers and employees of the credit union. 2.  The related persons of a director, officer or employee of the credit union. 3.  If the credit union is a member of a central, the directors, officers and employees of the central. part v   Capital and Liquidity
77 (1) A credit union shall maintain, in relation to its operations, adequate and appropriate forms of capital and liquidity. 2020, c. 36, Sched. 7, s. 77 (1). Same (2) A credit union shall comply with the Authority rules governing adequate and appropriate forms of capital and liquidity. 2020, c. 36, Sched. 7, s. 77 (2); 2021, c. 40, Sched. 5, s. 6. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 6 - 01/03/2022
78 (1) A credit union shall establish capital and liquidity policies for the credit union consistent with the Authority rules governing adequate capital and liquidity and the credit union shall adhere to those policies. Policies to be prudent (2) The capital and liquidity policies of a credit union shall consist of policies, standards and procedures that a reasonable and prudent person would apply in order to ensure the financial soundness of the credit union, avoid undue risk of loss and obtain a reasonable return. Approval and review by board (3) The capital and liquidity policies of a credit union are subject to the approval of the board and the board shall review the policies at least once each year. Order if policies inadequate, etc. (4) If the Chief Executive Officer considers the capital and liquidity policies of a credit union to be inadequate or imprudent, the Chief Executive Officer may order the credit union to amend them in accordance with the order. Procedural rules (5) Section 209 applies with respect to an order under this section. Appeal to Tribunal (6) A credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 212.
79 (1) The Chief Executive Officer may order a credit union, (a)  to increase its capital; or (b)  to provide additional liquidity in such forms and amounts as the Chief Executive Officer may require. Circumstances (2) Despite a credit union’s compliance with the Authority rules governing adequate capital and liquidity, the Chief Executive Officer may impose the requirements set out in subsection (1), (a)  if there are reasonable grounds to believe that the credit union is not complying with the requirements of this Act, the regulations and the Authority rules concerning the management of risk in making loans and investments and in the general management of credit union business; (b)  if the Chief Executive Officer considers that imposing the requirement is necessary to protect the interests of members, shareholders or depositors; or (c)  if the Chief Executive Officer considers that imposing the requirement is necessary to ensure the financial security and integrity of the credit union. Compliance (3) The credit union shall comply with the order within such time as the Chief Executive Officer specifies in the order. Procedural rules (4) Section 209 applies with respect to an order under this section. Appeal to Tribunal (5) A credit union that is subject to an order under this section may appeal the order to the Tribunal in accordance with section 212.
80 (1) A credit union may apply to the Chief Executive Officer for a variation of the requirements under section 77. Application (2) An application must be in a form approved by the Chief Executive Officer and must describe how and when the credit union will meet the requirements under section 77. Variation (3) The Chief Executive Officer may grant the variation subject to any terms the Chief Executive Officer considers appropriate if the Chief Executive Officer considers that granting the variation is in the interest of the members of the credit union and that the credit union will meet the requirements under section 77 within a reasonable time.
81 If the Chief Executive Officer has appraised the value of an asset held by a credit union or a subsidiary and the value determined by the Chief Executive Officer varies materially from the value placed by the credit union or the subsidiary on the asset, the Chief Executive Officer shall send to the credit union, its auditor and its audit committee a written notice of the value of the asset as determined by the Chief Executive Officer.
82 A credit union shall provide a report in a form approved by the Chief Executive Officer concerning its compliance with section 77 to such persons and at such times as required by the Chief Executive Officer.
82.1 A credit union shall make monthly provision for doubtful loans and establish reserves as required by the Authority rules or the Authority by-laws. 2021, c. 40, Sched. 5, s. 7. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 7 - 01/03/2022 Part VI   Governing the Credit union Directors
83 Only an individual who meets the following criteria is eligible to be a director of a credit union: 1.  The person is a member of the credit union. 2.  The person is at least 18 years of age. 3.  The person is a Canadian citizen or a person lawfully admitted to Canada for permanent residency who is ordinarily resident in Canada.
84 Such individuals as may be prescribed by Authority rule are disqualified from being directors of a credit union.
85 If the by-laws of a credit union permit it, the chief executive officer of the credit union may be a director of the credit union, subject to any limits or restrictions set out in the regulations.
86 A credit union must have the minimum number of directors prescribed by Authority rule.
87 Subject to the Authority rules, directors shall be elected in the manner provided in the by-laws of the credit union. 2021, c. 40, Sched. 5, s. 8. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 8 - 01/03/2022
88 The board shall be composed in the manner provided in the Authority rules.
89 Subject to the Authority rules, directors shall hold office for such term as the by-laws of the credit union provide. 2021, c. 40, Sched. 5, s. 9. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 9 - 01/03/2022
90 A majority of the board constitutes a quorum, unless the Authority rules provide otherwise.
91 If a vacancy occurs in the board, the vacancy shall be filled in accordance with the Authority rules.
92 A director ceases to hold office in the circumstances prescribed by Authority rule.
93 (1) The board may remove a director in accordance with the Authority rules. Same (2) The removal of a director is subject to such conditions and requirements as may be prescribed by Authority rule.
94 (1) The Chief Executive Officer may, by order, remove a director of a credit union if the Chief Executive Officer is of the opinion, (a)  that the director is not suitable to hold office as a director on the basis of the character or competence of the director; or (b)  that it is in the best interests of the credit union’s members that the director be removed. Risk of prejudice (2) In forming an opinion under subsection (1), the Chief Executive Officer must consider whether the interests of the members, depositors and creditors of the credit union have been or are likely to be prejudiced by the director’s holding office. Order re more than one director (3) An order made under this section may remove more than one director of a credit union. Same (4) If there is not a quorum of directors in office because of an order made under this section to remove directors, the Chief Executive Officer shall appoint the necessary number of directors so there is a quorum of directors in office. Procedural rules (5) Section 209 applies with respect to an order under this section. Appeal to Tribunal (6) A director who is subject to an order under this section may appeal the order to the Tribunal in accordance with section 212.
95 (1) A director may resign from the board in accordance with the Authority rules. Same (2) The resignation of a director is subject to such conditions and requirements as may be prescribed by Authority rule.
96 (1) A director who opposes any proposed action or resolution by the directors or members is entitled to give the credit union a written statement setting out why the director opposes the proposed action or resolution. Circulation of statement (2) The credit union shall, within 30 days after receipt of the statement, send a copy of the statement to the Chief Executive Officer. Immunity (3) A credit union and a person acting on its behalf do not incur any liability by reason only of sending the statement as required by subsection (2). Powers and Duties of Board
97 (1) The board shall manage or supervise the management of the business and affairs of the credit union and shall perform such additional duties as may be imposed under this Act, the regulations or the Authority rules respecting credit unions, or the by-laws of the credit union. Board, etc., not to manage day to day activities (2) The board, a committee of the board or a director shall not directly manage, or be involved in, the day to day activities of the credit union. First directors (3) The first directors of a credit union named in the articles have all the powers and duties and are subject to all the liabilities of directors.
98 (1) The board may pass by-laws governing the conduct of the affairs of the credit union. 2020, c. 36, Sched. 7, s. 98 (1). Required matters (2) The by-laws of a credit union shall provide for the following matters: 1.  The appointment of officers of the credit union and the establishment of their duties. 2.  The calling of meetings of the board, including the minimum number of times the board must meet each financial year if the minimum number of times exceeds the minimum number of times prescribed by regulation, the place or places where meetings of the board may be held and the manner in which notice of the meetings must be given. 3.  Such other matters as may be prescribed by regulation. 2020, c. 36, Sched. 7, s. 98 (2); 2021, c. 40, Sched. 5, s. 10 (1). (3) Repealed: 2021, c. 40, Sched. 5, s. 10 (2). Limitation (4) By-laws that are contrary to this Act, the regulations or the articles of the credit union are void. 2020, c. 36, Sched. 7, s. 98 (4). Same (5) By-laws that relieve a person of obligations or requirements under this Act or the regulations are void. 2020, c. 36, Sched. 7, s. 98 (5). Restrictive by-laws (6) A by-law may impose greater restrictions in respect of a matter than are imposed under this Act or the regulations. 2020, c. 36, Sched. 7, s. 98 (6). Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 10 (1, 2) - 01/03/2022
99 The procedures for setting, paying and disclosing the remuneration and expenses of directors and members of committees shall be established by Authority rule.
100 (1) A by-law is not effective until it is passed by the board and confirmed, with or without variation, by a special resolution passed at a general meeting of the members duly called for that purpose or by such greater proportion of the votes cast as the articles may provide. Filing (2) Within 30 days after a by-law is confirmed, the credit union shall file a copy of it with the Chief Executive Officer.
101 The board may establish committees in accordance with the Authority rules and may delegate powers and assign duties to those committees in accordance with the Authority rules.
102 (1) The board of every credit union shall adopt a code of market conduct. Same, filing requirement (2) The board of a credit union shall file a copy of the credit union’s code of market conduct, and any amendments to the code, with the Chief Executive Officer. Chief Executive Officer may require amendment of code (3) The Chief Executive Officer may direct the board of a credit union to amend the credit union’s code of market conduct at any time. Chief Executive Officer may require adoption of code (4) If the board of a credit union does not adopt a code of market conduct under subsection (1), the Chief Executive Officer may require that the board adopt a code of market conduct selected by the Chief Executive Officer. Compliance (5) A credit union shall comply with its code of market conduct.
103 (1) The board of every credit union shall report annually on the gender diversity of the board. Same (2) A gender diversity report must comply with such requirements as may be prescribed by regulation. Audit Committee
104 (1) The board of every credit union shall establish an audit committee composed of members appointed by the board from among the directors. Powers and duties of audit committee (2) The audit committee has such powers and duties as are set out in this Act, prescribed by the Authority rules or set out in the by-laws of the credit union. Officers
105 (1) A credit union must have such officers as are provided for in the Authority rules and may have such additional officers as are provided for in the credit union’s by-laws. Powers and duties of officers (2) Subject to this Act, the regulations, the Authority rules and the by-laws of the credit union, the board may establish the duties of the credit union’s officers.
106 The procedures for setting, paying and disclosing the remuneration and expenses of officers shall be established by Authority rule. Duties of Directors, Officers and Committee Members
107 (1) Every director, officer, member of a committee or employee of a credit union shall keep confidential all information received by the credit union or by a subsidiary or other affiliate of the credit union that the director, officer, committee member or employee knows or should know is confidential to the credit union or subsidiary or other affiliate. Use of information (2) No director, officer, member of a committee or employee of a credit union shall make use of information referred to in subsection (1) in any transaction in order to obtain, directly or indirectly, a benefit or advantage for any person other than the credit union or a subsidiary or other affiliate of the credit union.
108 (1) Every director, officer, member of a committee or employee of a credit union shall keep confidential all information respecting members of the credit union. Exception — consent (2) Despite subsection (1), information respecting a member may be disclosed with the consent of the member. Exceptions (3) Despite subsection (1), a director, officer or member of a committee or an employee authorized by the board may disclose information, (a)  to a person acting in a confidential or professional relationship to the credit union, including an employee of a central in which the credit union is a member; (b)  to a financial institution with which the credit union has transactions that may involve confidential matters; (c)  to another credit union with which the credit union of the director, officer, committee member or employee proposes to amalgamate, for the purposes of the amalgamation, if the credit unions have signed letters of intent to enter into an agreement for the amalgamation; (d)  to a person to whom the credit union proposes to sell assets, for the purposes of the sale, if the credit union and the person have signed letters of intent to enter into an agreement of purchase and sale for the sale; (e)  to a credit grantor or to a reporting agency, if the disclosure is for the purpose of determining the creditworthiness of the member; (f)  to the Chief Executive Officer and the Authority; and (g)  to any other person entitled to the information by law.
109 (1) Every director, officer and member of a committee shall exercise their powers and discharge their duties honestly, in good faith and in the best interests of the credit union. Standard of care (2) The director, officer or committee member shall exercise the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
110 (1) Every director, officer, member of a committee and employee of a credit union shall comply with this Act, the regulations, the Authority rules, the by-laws of the credit union and any requirements imposed by the Chief Executive Officer under this Act. 2020, c. 36, Sched. 7, s. 110. No exculpation (2) No provision in any contract, in any resolution or in the by-laws of a credit union relieves a director, an officer, a committee member or an employee from a duty under this section or relieves that individual from liability for a breach of a duty. 2021, c. 40, Sched. 5, s. 11. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 11 - 01/03/2022 Conflicts of Interest
111 (1) This section applies to every director, officer, member of a committee or employee of a credit union who, (a)  is a party to a material contract or proposed material contract with the credit union; (b)  is a director or an officer of an entity that is a party to a material contract or proposed material contract with the credit union; (c)  has a material interest in a person who is a party to a material contract or proposed material contract with the credit union; or (d)  is a spouse, parent or child of an individual who is a party to a material contract or proposed material contract with the credit union. 2020, c. 36, Sched. 7, s. 111 (1); 2021, c. 4, Sched. 11, s. 6 (2). Same (2) The director, officer, committee member or employee shall disclose, in writing, to the credit union or ask to have the nature and extent of that person’s interest entered in the minutes of board meetings. 2020, c. 36, Sched. 7, s. 111 (2). Time of disclosure, director (3) A director shall make the disclosure, (a)  at the board meeting at which a proposed contract is first considered; (b)  if the director was not then interested in a proposed contract, at the first meeting after the director becomes so interested; (c)  if the director becomes interested after a contract is made, at the first meeting after the director becomes so interested; or (d)  if a person who is interested in a contract later becomes a director, at the first meeting after that person becomes a director. 2020, c. 36, Sched. 7, s. 111 (3). Same, officer or committee member (4) An officer, committee member or employee shall make the disclosure, (a)  promptly after the officer, committee member or employee becomes aware that a proposed contract is to be considered or a contract has been considered at a board meeting; (b)  if the officer, committee member or employee becomes interested after a contract is made, promptly after becoming so interested; or (c)  if a person who is interested in a contract later becomes an officer, committee member or employee, promptly after becoming an officer, committee member or employee. 2020, c. 36, Sched. 7, s. 111 (4). Same, no board approval (5) If a material contract or proposed material contract is one that, in the ordinary course of business of the credit union, would not require approval by the board or the members, the director, officer, committee member or employee shall make the disclosure promptly after becoming aware of the contract or proposed contract. 2020, c. 36, Sched. 7, s. 111 (5). Continuing disclosure (6) A general notice to the board by a director, officer, committee member or employee declaring that the director, officer, committee member or employee is a director or officer of an entity, or has a material interest in a person, and is to be regarded as interested in any contract made with that entity or person, is sufficient disclosure of an interest in relation to any contract so made. 2020, c. 36, Sched. 7, s. 111 (6). Section Amendments with date in force (d/m/y) 2021, c. 4, Sched. 11, s. 6 (2) – 01/03/2022
112 (1) A director to whom section 111 applies shall not be present at any meeting while the contract is being discussed or vote on, or attempt to influence the voting on, any resolution to approve the contract. Exception (2) Subsection (1) does not apply if the contract is, (a)  an arrangement by way of security for money lent to or obligations undertaken by the director for the benefit of the credit union or a subsidiary of it; (b)  a contract relating primarily to the director’s remuneration as a director or as a member of a committee or an officer, employee or agent of the credit union or a subsidiary of it or an entity controlled by it; (c)  a contract for indemnity under section 123 or for insurance under section 122; or (d)  a contract with a subsidiary of the credit union. Ineligibility (3) A director who knowingly contravenes subsection (1) ceases to hold office as a director and is not eligible, for a period of five years after the date on which the contravention occurred, for election or appointment as a director of any financial institution that is incorporated or formed by or under an Act of the Province of Ontario.
113 (1) If a director, officer, committee member or employee made a required disclosure in respect of a contract referred to in subsection 111 (1), the contract was approved by the board or by the members of the credit union and the contract was reasonable and fair to the credit union at the time it was approved, the contract is neither void nor voidable by reason only, (a)  of the relationship between the person or entity and the director, officer, committee member or employee; or (b)  that an interested director is present at or is counted to determine the presence of a quorum at the board meeting that authorized the contract. Application to court (2) If a director, officer, committee member or employee of a credit union fails to disclose an interest in a material contract in accordance with section 111, a court may, on the application of the credit union or a member of the credit union, set aside the contract on such conditions as the court thinks fit.
114 (1) This section applies with respect to a person who is a director of a credit union or a member of a committee. Same (2) The person or a partnership or corporation from which the person receives compensation shall not act, for compensation, in a professional capacity in respect of business matters related to the credit union.
115 An officer or employee of a credit union shall not act as a trustee with respect to a deposit with the credit union or any other business or transaction with the credit union unless the beneficiary is a related person of the officer or employee. Miscellaneous
116 An act by a director, officer or member of a committee is not invalid by reason only of a defect discovered afterward in the appointment, election or qualification of the director, officer or member.
117 (1) Every director, officer or employee of a credit union who receives or has charge of money shall, on assuming the director, officer or employee’s duties, furnish to the credit union proof of bonding insurance that is satisfactory to the Chief Executive Officer. Bond (2) The bond must be for an amount equal to or greater than the amount that is prescribed by Authority rule or determined in the manner prescribed by Authority rule and must satisfy such conditions as may be prescribed by Authority rule.
118 A liability imposed under this Act upon a director, officer or member of a committee is in addition to any other liability that is imposed upon that person by law.
119 (1) The directors of a credit union who vote for or consent to a resolution of the directors authorizing the issue of shares contrary to subsection 51 (1), or the issue of subordinated indebtedness contrary to section 151 for a consideration other than money are jointly and severally liable to the credit union to make good any amount by which the consideration is less than the fair market value that the credit union would have received if the share or subordinated indebtedness had been issued for money on the date of the resolution. Further liabilities (2) The directors of a credit union who vote for or consent to a resolution of the directors authorizing any of the distributions or payments listed in subsection (3) are jointly and severally liable to restore to the credit union any amounts so distributed or paid and not otherwise recovered by the credit union and any amounts in relation to any loss suffered by the credit union. Same (3) The following are the distributions and payments referred to in subsection (2): 1.  A redemption or purchase of shares contrary to this Act. 2.  A reduction of capital contrary to this Act. 3.  A payment of a dividend contrary to this Act. 4.  The payment of an indemnity contrary to this Act. 5.  Any transaction with a restricted party contrary to this Act.
120 (1) A director who has satisfied a judgment in relation to the director’s liability under section 119 is entitled to contribution from the other directors who voted for or consented to the unlawful act on which the judgment was founded. Recovery (2) A director who is liable under section 119 is entitled to apply to a court for an order compelling a member, shareholder or other person to pay or deliver to the director, (a)  any money or property that was paid or distributed to the member, shareholder or other person contrary to this Act; or (b)  an amount equal to the value of the loss suffered by the credit union as a result of any transaction contrary to Part IX or the regulations made for the purposes of that Part. Court order (3) Where an application is made to a court under subsection (2), the court may, where it is satisfied that it is equitable to do so, (a)  order a member, shareholder, or other person to pay or deliver to a director any money or property that was paid or distributed to the member, shareholder or other person contrary to this Act or any amount referred to in clause (2) (b); (b)  order a credit union to return or issue membership shares or shares to a member or shareholder from whom the credit union has purchased, redeemed or otherwise acquired membership shares or shares; or (c)  make any further order it thinks fit.
121 (1) A director, officer, member of a committee or an employee of a credit union is not liable under section 119 or 196 and has fulfilled their duty under section 110 if they exercised the degree of care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances, including reliance in good faith on, (a)  financial statements of the credit union represented to them by an officer of the credit union or in a written report of the auditor of the credit union fairly to reflect the financial condition of the credit union; or (b)  a report of an accountant, lawyer or other professional person whose profession lends credibility to a statement made by the person. Same (2) A director, officer or member of a committee of a credit union has fulfilled their duty under section 109 if they relied in good faith on, (a)  financial statements of the credit union represented to them by an officer of the credit union or in a written report of the auditor of the credit union fairly to reflect the financial condition of the credit union; or (b)  a report of an accountant, lawyer or other professional person whose profession lends credibility to a statement made by the person.
122 (1) A credit union may purchase and maintain insurance for the benefit of an eligible person as defined in section 123 against any liability incurred by the person in the person’s capacity as, (a)  a director, officer or member of a committee; or (b)  a director or officer of another entity if the person acts or acted in that capacity at the credit union’s request. Exception (2) Subsection (1) does not apply if the liability relates to the person’s failure to act honestly, in good faith and in the best interests of the credit union.
124 (1) A credit union or an eligible person under section 123 may apply to a court for an order approving an indemnity under that section and the court may so order and make any further order it thinks fit. Notice (2) The applicant shall give the Chief Executive Officer written notice of the application. Other notice (3) The court may order notice to be given to any interested person. Right to participate (4) The Chief Executive Officer and each interested person is entitled to appear and to be heard at the hearing of the application in person or by counsel. Auditor
125 (1) A credit union shall appoint an auditor in accordance with the Authority rules. Qualifications of auditor (2) The auditor must have the qualifications prescribed by Authority rule.
126 (1) The credit union may remove an auditor in accordance with the Authority rules. Same (2) The removal of an auditor is subject to such conditions and requirements as may be prescribed by Authority rule.
127 The Chief Executive Officer may, by order, remove an auditor of a credit union if the Chief Executive Officer is of the opinion that it is in the best interests of the credit union that the auditor be removed.
128 (1) An auditor may resign from the credit union in accordance with the Authority rules. Same (2) The resignation of an auditor is subject to such conditions and requirements as may be prescribed by Authority rule.
129 If an auditor is removed or resigns, the credit union must appoint a replacement auditor in accordance with the Authority rules.
130 The procedures for setting, paying and disclosing the remuneration of auditors shall be established by the board of the credit union, subject to the Authority rules. 2021, c. 40, Sched. 5, s. 12. Section Amendments with date in force (d/m/y) 2021, c. 40, Sched. 5, s. 12 - 01/03/2022
131 (1) A credit union shall take all necessary steps to ensure that its auditor is duly appointed as the auditor of each of its subsidiaries unless the Chief Executive Officer authorizes another person to act as auditor of a subsidiary. Exception (2) If a person is appointed as auditor by a body corporate before it becomes a subsidiary of a credit union, the person may complete the term of the appointment. Rights and Duties of Auditors
132 (1) The auditor of a credit union has a right of access at all times to all records and documents of the credit union. Same (2) The auditor is entitled to require from the board, directors, officers, employees and agents of the credit union such information and explanations as the auditor considers necessary to enable the auditor to make such reports as are required under this Act. Same (3) On the request of the auditor, the former directors, officers, employees or agents of the credit union shall, to the extent that they are reasonably able to do so, provide such information and explanations as are, in the opinion of the auditor, necessary to enable the auditor to perform the auditor’s duties.
133 (1) The auditor is entitled, (a)  to attend any meeting of members or shareholders of the credit union; (b)  to receive all notices and other communications relating to a meeting that a member or shareholder is entitled to receive; and (c)  to be heard at a meeting on any part of the business of the meeting that concerns the auditor. Required attendance (2) A member of a credit union who is entitled to vote at a meeting of members may require the auditor to attend such a meeting and the auditor shall do so at the credit union’s expense. Notice (3) The member must give written notice to the credit union at least five days before the meeting that the member wishes the auditor to attend.
134 (1) The auditor is entitled to call a meeting with the board, the audit committee or the internal auditor of the credit union. Required attendance (2) If the auditor calls a meeting under subsection (1), the board, the audit committee or the internal auditor of the credit union, as the case may be, shall attend the meeting.
135 (1) The auditor shall make such examinations as will enable the auditor to report to the members of the credit union in accordance with this section. Same (2) The auditor shall report to the members on the financial statements to be placed before them at the annual meeting. Qualified report (3) If the auditor’s report is not an unqualified report, the auditor shall state in the report the reason for the qualified report. Facts discovered subsequently (4) If facts come to the attention of an officer, the board or the audit committee which, if they had been known before the most recent annual meeting, would have required a material adjustment to the financial statement presented at the meeting, the officer, board or audit committee shall notify the auditor who reported to the members at the meeting and the board shall promptly amend the financial statement and send it to the auditor. Amendment of report (5) Upon receipt of the facts furnished under subsection (4) or from any other source, the auditor shall amend the report in respect of the financial statement furnished under that subsection if the auditor considers the amendment necessary. Notice of amendment (6) The board shall deliver the amended report to the members but, if the board does not do so within a reasonable time, the auditor shall deliver it to them. Amended report to Chief Executive Officer (7) Within 10 days after providing the amended report to the credit union, the auditor shall provide a copy of the amended report to the Chief Executive Officer. Auditing standards (8) The auditor’s examination referred to in subsection (1) shall, except as otherwise specified by the Chief Executive Officer, be conducted in accordance with generally accepted auditing standards, the primary source of which is the Handbook of the Chartered Professional Accountants of Canada. Report to address adequacy of capital (9) The auditor’s report shall address the credit union’s compliance with section 77.
136 (1) The Chief Executive Officer may, in writing, require that the auditor of a credit union, (a)  report to the Chief Executive Officer on the extent of the auditor’s procedures in the examination of the credit union’s financial statements; (b)  enlarge or extend the scope of that examination; or (c)  perform any other specific procedure. Same (2) The auditor shall comply with any direction by the Chief Executive Officer under subsection (1) and report to the Chief Executive Officer the results of the extended examination of specified procedure. Special examination (3) The Chief Executive Officer may, in writing, require that the auditor make an examination relating to the adequacy of the procedures adopted by the credit union for the safety of its creditors, members and shareholders, or any other examination that the public interest may require. Same (4) The auditor shall report the results of an examination to the Chief Executive Officer or to such persons as the Chief Executive Officer may direct. Special examination by auditor appointed by Chief Executive Officer (5) The Chief Executive Officer may direct that a special audit of a credit union be made if, in the opinion of the Chief Executive Officer, it is necessary and may appoint, for that purpose, an auditor qualified pursuant to subsection 125 (2). Expenses payable by credit union (6) The credit union shall pay the expenses of an examination or audit referred to in this section after the expenses have been approved, in writing, by the Chief Executive Officer.
137 (1) The auditor of a credit union shall report in writing to the chair of the board and to the audit committee of the credit union any transaction or conditions that have come to the auditor’s attention adversely affecting the credit union that, in the auditor’s opinion, are not satisfactory and require rectification. Same (2) A report under subsection (1) shall include such information as may be prescribed by Authority rule and shall be transmitted by the auditor to the persons prescribed by Authority rule. Part vii   Business powers Permitted Business Activities
138 Subject to this Act, a credit union shall not engage in or carry on a business or business activity other than the following businesses and business activities: 1.  Provide financial services primarily to its members, depositors, subsidiaries and affiliates. 2.  Hold and deal with real property. 3.  Act as a custodian of property on behalf of its members, depositors, subsidiaries and affiliates. 4.  Provide administrative, educational, promotional, technical, research and consultative services to its members, depositors, subsidiaries and affiliates. 5.  Make loans to officers and employees of the credit union. 6.  Such other businesses and business activities as may be authorized by this Act or prescribed by the Authority rules. Restrictions on Powers
139 (1) A credit union shall not deal in goods or engage in any trade or business except as authorized by this Act or the Authority rules. Same (2) Despite subsection (1), a credit union may, with the Chief Executive Officer’s written approval, deal in goods or engage in a trade or business that is not otherwise authorized by this Act, the regulations or the Authority rules. Same (3) A credit union may request a written approval under subsection (2) in accordance with the Authority rules and the approval is subject to such conditions or limitations as may be prescribed by the Authority rules. Prohibition (4) A credit union shall not provide services that are prescribed by Authority rule as prohibited. Networking (5) Subject to this Act, a credit union may act as an agent for a subsidiary or other persons or entities prescribed by Authority rule in respect of the provision of services to the credit union’s members, depositors, affiliates and other subsidiaries and refer members, depositors, affiliates or subsidiaries to one of its subsidiaries or other persons or entities prescribed by Authority rule.
140 (1) A credit union shall not be a general partner in a limited partnership or a partner in any other partnership. Exception (2) Despite subsection (1), the Chief Executive Officer may authorize a credit union to become a general partner in a limited partnership or a partner in another partnership.
141 (1) A credit union may undertake the business of insurance or act as an agent for any person in placing insurance only to the extent permitted by the Authority rules. Savings (2) Nothing in this section precludes a credit union from, (a)  requiring insurance to be placed by a member for the security of the credit union; or (b)  obtaining group insurance for its employees, its members or the employees of a subsidiary. Same (3) Nothing in this section precludes a central from obtaining group insurance for its employees, its members or the employees of its members or of a subsidiary. No pressure (4) A credit union shall not exercise pressure on a member to place insurance for the security of the credit union with any particular insurance company. Insurance requirement (5) A credit union may require that any insurance chosen by a member meet with its approval. Same (6) The approval required under subsection (5) shall not be unreasonably withheld. Interpretation (7) For the purpose of this section, the business of insurance includes the issuing of an annuity where the liability thereon is contingent on the death of a person.
142 A credit union may undertake fiduciary activities only to the extent permitted by the Authority rules.