jswizzle3737/ontario_laws_and_regs huggingface dataset:
0.1 In the Act and in this Regulation, “bank” means a bank to which the Bank Act (Canada) applies. O. Reg. 314/98, s. 1.
1. (1) In this Regulation, “agricultural loan” means an agricultural loan described in section 52; (“prêt agricole”) “bridge loan” means a bridge loan described in section 53; (“prêt-relais”) “Capital Adequacy Guideline for Ontario’s Credit Unions and Caisses Populaires” means the publication with that title that is published in The Ontario Gazette by the Superintendent, as the publication may be amended from time to time; (“Lignes directrices relatives à la suffisance du capital des caisses populaires et credit unions de l’Ontario”) “class 1 credit union” means a credit union that is not a class 2 credit union; (“caisse de catégorie 1”) “class 2 credit union” means a credit union that, according to section 1.1, is a class 2 credit union; (“caisse de catégorie 2”) “commercial loan” means a commercial loan described in section 54; (“prêt commercial”) “connected person” means a connected person as determined under section 73; (“personne rattachée”) “institutional loan” means an institutional loan described in section 55; (“prêt institutionnel”) “liquidity pool” means a liquidity pool described in section 19; (“fonds commun de liquidités”) “participating share” means a share of a body corporate that carries the right to participate in the earnings of the body corporate to an unlimited degree and to participate in a distribution of the remaining property of the body corporate on dissolution; (“action participante”) “personal loan” means a personal loan described in section 56; (“prêt personnel”) “regulatory capital” means regulatory capital as determined under section 14; (“capital réglementaire”) “residential mortgage loan” means a residential mortgage loan described in section 57. (“prêt hypothécaire résidentiel”) “residential property” means an individual condominium residential unit or a building with one to four units where at least one half of the floor area of the building is utilized as one or more private residential dwellings; (“propriété résidentielle”) “risk weighted assets” means the amount of the risk weighted assets as determined under section 15; (“actif à risques pondérés”) “total assets” means the total assets as determined under section 13. (“actif total”) O. Reg. 76/95, s. 1; O. Reg. 560/06, s. 1. (2) For the purposes of this Regulation, a lodgement of title is not a mortgage. O. Reg. 314/98, s. 2.
1.1 (1) A credit union is a class 2 credit union if either of the following circumstances exist at any time after January 31, 2007: 1. The total assets of the credit union are greater than or equal to $50 million. 2. The credit union makes a commercial loan. O. Reg. 560/06, s. 2. (2) A credit union becomes a class 2 credit union under subsection (1) on the first day on which either of the circumstances described in subsection (1) exist. O. Reg. 560/06, s. 2. (3) A credit union that changes the terms and conditions of a commercial loan made on or before January 31, 2007 or refinances such a loan in any other way shall be deemed, for the purposes of paragraph 2 of subsection (1), to have made a commercial loan on the date of the change or refinancing. O. Reg. 560/06, s. 2. (4) A credit union also becomes a class 2 credit union if, upon application by the credit union to the Superintendent, the Superintendent is satisfied that, (a) the credit union has established the policies required by sections 190 and 191 of the Act with respect to investment and lending; (b) those policies are appropriate for the size and complexity of the credit union; (c) the credit union is in compliance with the Corporation’s by-laws, including the by-law prescribing standards of sound business and financial practices; and (d) the credit union is in compliance with the minimum capital requirements that would apply under this Regulation if the credit union were a class 2 credit union. O. Reg. 560/06, s. 2. (5) Once a credit union becomes a class 2 credit union, it remains a class 2 credit union in perpetuity. O. Reg. 560/06, s. 2.
2. (1) A security is widely-distributed, (a) if it is listed or posted for trading on a recognized stock exchange; or (b) if a prospectus relating to the issuance of the security is filed under the laws of a province or a jurisdiction outside Canada. (2) A debt obligation is widely-distributed if no prospectus is required in respect of its distribution under the laws of a province or a jurisdiction outside Canada and, (a) at least 90 per cent of the maximum authorized principal of the debt obligation is held by one or more persons other than the credit union making the loan and its subsidiaries and, (i) the debt obligation is issued to at least 25 persons other than the credit union and its subsidiaries within six months after the day on which the first of the debt obligations is issued, or (ii) the debt obligations are issued on a continuous basis and there are, on average, at least 25 holders other than the credit union and its subsidiaries; or (b) when the debt obligation is issued, it meets at least three of the following criteria: 1. Its initial term is one year or less. 2. It is rated by a rating agency. 3. It is distributed through a person authorized to trade in securities. 4. It is distributed in accordance with an offering circular or memorandum or a similar document relating to the distribution of securities. O. Reg. 76/95, s. 2. PART II   ESTABLISHING A CREDIT UNION Articles of Incorporation
Articles of Incorporation
3. (1) The following information must be set out in the articles of incorporation of a credit union: 1. Its name. 2. The address of its head office and the name of the municipality or township in Ontario where its principal place of business is located. 3. The minimum and maximum number of directors. 4. The full name, citizenship or landed immigrant status and residential address of each director. 5. The classes and maximum number, if any, of shares other than membership shares that the credit union is authorized to issue. 6. The rights, privileges, restrictions and conditions, if any, attaching to each class of shares. 7. The board’s authority with respect to any class of shares that may be issued in series. (2) Articles filed when a credit union is first incorporated must also set out the full name and residential address of each incorporator. (3) Articles approved by the Minister before March 1, 1995 shall be deemed to comply with subsections (1) and (2). O. Reg. 76/95, s. 3. PART III   MEMBERSHIP Payments Re Deceased Members
Payments Re Deceased Members
4. For the purposes of subsection 43 (1) of the Act, the prescribed amount under clause 43 (1) (a) and under clause 43 (1) (b) of the Act is $10,000. O. Reg. 76/95, s. 4. PART IV   CAPITAL STRUCTURE Membership Share Certificate
Membership Share Certificate
5. For the purposes of subsection 52 (6) of the Act, a membership share certificate must include the following information and statements on its face: 1. The name of the credit union as it appears in the articles. 2. The name of each person to whom the certificate is issued. 3. A statement indicating that the credit union is governed by the Credit Unions and Caisses Populaires Act, 1994. 4. A statement indicating that the certificate represents membership shares in the credit union and indicating the number of shares. 5. A statement indicating that there may be a lien on the shares in favour of the credit union for indebtedness to it. 6. A statement indicating that the shares are not guaranteed or insured by the Corporation or another public agency. 7. A statement indicating that the certificate is not transferable. O. Reg. 76/95, s. 5. Offering Statement
Offering Statement
7. Revoked: O. Reg. 314/98, s. 4.
Offering Statement
8. Subsection 75 (1) of the Act does not apply to the conversion of shares under subsection 51 (4) of the Act. O. Reg. 76/95, s. 8.
Offering Statement
8.1 (1) A credit union may give any person or entity a notice respecting an offering after the offering statement is filed and before the Superintendent issues a receipt. (2) The notice must contain the following information: 1. A detailed description of the security that the credit union proposes to issue. 2. The price of the security, if the price has been determined. 3. The name and address of a person from whom the securities may be purchased. (3) The notice must include the following statements in conspicuous, bold type on the front cover, in the same language as is used in the offering statement: 1. This is not an offer to sell the securities described in this document. 2. The securities described in this document cannot be sold until after the Superintendent of Financial Services issues a receipt for an offering statement. You are advised to read the offering statement approved by the Superintendent, because the terms and conditions may be changed significantly. 3. The Superintendent may refuse to issue a receipt, in which case the securities described in this document will not be offered for sale. O. Reg. 314/98, s. 5. Statement of Material Change
Statement of Material Change
9. The following information must be set out in a statement of material change respecting an offering statement by a credit union: 1. The name of the credit union. 2. The date on which the receipt for the offering statement was issued. 3. The date on which the material change occurred. 4. A description of the material change. O. Reg. 76/95, s. 9.
Statement of Material Change
10. Revoked: O. Reg. 314/98, s. 6. Restrictions on Transfer of Securities
Restrictions on Transfer of Securities
11. For the purposes of subsection 83 (1) of the Act, the following are persons to whom securities issued pursuant to clause 75 (1) (a) of the Act may be transferred: 1. The Corporation. 2. A stabilization authority. 3. A league. O. Reg. 76/95, s. 11. PART V   CAPITAL AND LIQUIDITY Adequate Capital
Adequate Capital
12. (1) A class 1 credit union has adequate capital if its regulatory capital is at least 5 per cent of its total assets. O. Reg. 560/06, s. 3. (2) A class 2 credit union has adequate capital for a financial year if the following conditions are satisfied: 1. Its regulatory capital expressed as a percentage of its total assets is at least, i. 4.5 per cent for a financial year ending on or after February 1, 2007 but before January 1, 2008, ii. 4.25 per cent for the financial year ending in 2008, iii. 4 per cent for a financial year ending on or after January 1, 2009. 2. Its regulatory capital, expressed as a percentage of its risk weighted assets, is at least 8 per cent. O. Reg. 560/06, s. 3. Total Assets
Total Assets
13. (1) The total assets of a credit union is the amount represented by “C” in the formula, A – B = C in which, “A” equals the amount of all the credit union’s assets, and “B” equals the sum of, (a) the amount of goodwill and other intangible assets, and (b) the amount of deferred charges. O. Reg. 560/06, s. 4 (1). (2) For the purposes of subsection (1), the following rules apply: 1. The amount of an asset is its value as shown on the financial statements of the credit union. 2. Provisions or allowances for losses of a general nature must be deducted from the most closely applicable class of assets. 3. The equity method of accounting must be used to calculate an investment in the shares of a subsidiary. 4. Cash deposits in a financial institution must be offset against overdrafts with the same financial institution. O. Reg. 76/95, s. 13 (2); O. Reg. 560/06, s. 4 (2). Regulatory Capital
Adequate Liquidity
16. (1) A credit union shall maintain an amount at least equal to 1 per cent of its deposits and borrowings in the following classes of assets: 1. Cash. 2. Deposits in Canada that are callable at their issue price within 100 days after being issued with, i. a bank listed in Schedule I or II to the Bank Act (Canada), ii. a loan and trust corporation registered under the Loan and Trust Corporations Act, iii. the Province of Ontario Savings Office, or iv. a league or Credit Union Central of British Columbia. O. Reg. 76/95, s. 16 (1); O. Reg. 298/07, s. 2. (2) The assets maintained to meet the requirements of this section must be unencumbered, but may be pledged for the purpose of subsection 49 (2). O. Reg. 76/95, s. 16 (2).
Adequate Liquidity
17. (1) A credit union shall maintain an amount at least equal to 10 per cent of its deposits and borrowings in the following classes of assets: 1. The assets described in section 16. 2. Treasury bills or other debt obligations issued by the government of Canada or a province that mature in 100 days or less. 3. An amount equal to the payroll deductions, if any, made from the payroll of members that are in the course of being remitted. 4. Subject to subsection (3), bankers’ acceptances and discounted notes issued by a bank listed in Schedule I or II to the Bank Act (Canada), a league or Credit Union Central of British Columbia, but only if the credit union is authorized by a written investment policy to hold such assets and they mature in one year or less. 5. Deposits in Credit Union Central of Canada, the Caisse Centrale Desjardins, Credit Union Central of British Columbia or a league that mature in 100 days or less but only if the credit union is authorized by a written investment policy to hold such assets. 6. Debt obligations of Credit Union Central of Canada, the Caisse Centrale Desjardins, Credit Union Central of British Columbia or a league that mature in 100 days or less, but only if the credit union is authorized by a written investment policy to hold such assets. O. Reg. 76/95, s. 17 (1); O. Reg. 298/07, s. 3 (1). (2) The amount maintained under section 16 may be included in the amount maintained under subsection (1). O. Reg. 76/95, s. 17 (2). (3) Bankers’ acceptances or discounted notes issued by a bank must have not less than an R1 Middle rating as classified by the Dominion Bond Rating Service or not less than an A-1+ as classified by the Canadian Bond Rating Service. O. Reg. 76/95, s. 17 (3). (4) Despite subsection (1), a credit union shall maintain an amount at least equal to 8 per cent of its deposits and borrowings in the classes of assets described in subsection (1), (a) if the credit union has a line of credit with a financial institution, Credit Union Central of Canada, the Caisse Centrale Desjardins or Credit Union Central of British Columbia or is a member of a liquidity pool; (b) if the line of credit, (i) is for an amount not less than 2 per cent of the credit union’s deposits, shares and earnings, and (ii) is revocable only after 30 days notice to the credit union; and (c) if the terms of the line of credit are set out in writing. O. Reg. 76/95, s. 17 (4); O. Reg. 298/07, s. 3 (2). (5) The assets maintained to meet the requirements of this section must be unencumbered, but may be pledged for the purpose of subsection 49 (2). O. Reg. 76/95, s. 17 (5).
Adequate Liquidity
18. (1) A credit union may maintain in the following classes of assets an amount not greater than 50 per cent of the amounts that it is required to maintain under sections 16 and 17: 1. Subject to subsection (2), bonds, debentures or other debt obligations issued or guaranteed by the government of Canada or a province or territory of Canada that mature in more than 100 days but less than three years. 2. Debt obligations issued by the Corporation that mature in less than three years. 3. Debt obligations that mature in three years or less issued by a municipality in Canada or an agency of one, a school board, university, hospital or a social service provider that receives regular government financial support as its primary source of funding. 4. Subject to subsection (2), bankers’ acceptances and discounted notes issued by a bank listed in Schedule I or II to the Bank Act (Canada), a league or Credit Union Central of British Columbia, but only if the credit union is authorized by a written investment policy to hold such assets and they mature in three years or less. 5. Deposits in Credit Union Central of Canada, the Caisse Centrale Desjardins, Credit Union Central of British Columbia or a league that mature in less than three years, but only if the credit union is authorized by a written investment policy to hold such assets. 6. Debt obligations of Credit Union Central of Canada, the Caisse Centrale Desjardins, Credit Union Central of British Columbia or a league that mature in less than three years, but only if the credit union is authorized by a written investment policy to hold such assets. O. Reg. 76/95, s. 18 (1); O. Reg. 298/07, s. 4. (2) Bonds, debentures or other debt obligations, bankers’ acceptances and discounted notes issued by a bank must hold not less than an R1 Middle or AA rating as classified by the Dominion Bond Rating Service or not less than an A-1+ or A+ as classified by the Canadian Bond Rating Service. O. Reg. 76/95, s. 18 (2).
Adequate Liquidity
20. (1) A credit union that, for a period of five consecutive days (excluding Sundays and holidays), does not comply with sections 16, 17 and 18 shall not make a loan or an investment until it again complies with those sections. O. Reg. 76/95, s. 20 (1); O. Reg. 314/98, s. 10 (1). (2) The credit union shall submit to the Superintendent and to the Corporation a report addressing the following matters immediately after the five-day period expires: 1. The circumstances that led to the credit union’s non-compliance. 2. The steps it is taking to comply with those sections. 3. Details of when it will again comply with those sections. O. Reg. 76/95, s. 20 (2); O. Reg. 314/98, s. 10 (2).
Adequate Liquidity
21. (1) In this section, “A” means, with respect to a credit union, the value of its assets invested in the assets described in sections 17 and 18; “B” means, with respect to a credit union, the value of its borrowings that mature in less than 100 days; “C” means, with respect to a credit union, the value of the deposits in the credit union; “D” means, with respect to a credit union, the value of its borrowings that mature in 100 days or more. O. Reg. 314/98, s. 11. (2) A credit union that is a member of a liquidity pool or that has a line of credit with a financial institution, Credit Union Central of Canada, the Caisse Centrale Desjardins or Credit Union Central of British Columbia shall maintain sufficient assets described in sections 17 and 18 so that the amount calculated using the formula (A–B) is at least 6 per cent of the amount calculated using the formula (C+D). O. Reg. 298/07, s. 6. (3) A credit union that is not described in subsection (2) shall maintain sufficient assets described in sections 17 and 18 so that the amount calculated using the formula (A–B) is at least 8 per cent of the amount calculated using the formula (C+D). O. Reg. 314/98, s. 11. (4) A credit union that does not maintain the required percentage in assets described in sections 17 and 18 for five consecutive days (excluding Sundays and holidays) shall immediately notify the Superintendent and its league, if any, of that fact. O. Reg. 314/98, s. 11. (5) Within 10 days after notifying the Superintendent, the credit union shall give the Superintendent a plan for the repayment of its borrowings to the extent necessary to enable the credit union to maintain the required percentage in assets described in sections 17 and 18. O. Reg. 314/98, s. 11. Provision for Doubtful Loans and Required Reserves
Provision for Doubtful Loans and Required Reserves
22. (1) For the purposes of section 90 of the Act, the prescribed monthly provision for doubtful loans is the provision required by the Corporation in its by-laws. (2) For the purposes of section 90 of the Act, the prescribed reserves are those required by By-law No. 6 of the Corporation. O. Reg. 76/95, s. 22. PART VI   GOVERNING THE CREDIT UNION Mandatory By-laws
Mandatory By-laws
23. For the purposes of subsection 105 (2) of the Act, the board of a credit union shall pass by-laws governing the following matters: 1. Admission to membership in the credit union and any fees for admission. 2. Withdrawal, suspension or expulsion from membership in the credit union. 3. The allotment of shares, including the maximum number that may be allotted to a member, the payment for shares, the redemption or transfer of shares and the recording of information about these matters. 4. The procedure for deciding how to distribute the profits of the credit union. 5. If the credit union is a member of a league and assesses its own members to pay for the cost of membership in the league, the procedure for assessing credit union members’ annual assessment to be paid to the league. 6. The language or languages in which the credit union will carry on business. 7. Mandatory procedures governing the operation of the credit union. 8. The types of loans that the credit union is authorized to make. 9. The time, place and notice to be given for a members’ meeting, the record date for determining who is entitled to vote at such a meeting, and the quorum for such a meeting. 10. The time, place and notice to be given for a board meeting. 11. The time for, and manner of, electing directors and committee members. 12. The term of office of directors and of committee members, and the procedure for setting their remuneration. 13. The appointment and removal of officers and employees of the credit union, any security that they are required to give the credit union and the procedures for establishing their remuneration. O. Reg. 76/95, s. 23. Credit Committee
Credit Committee
24. (1) The following information must be included in the report of the credit committee to the board under subsection 120 (1) of the Act for the period reported upon: 1. The number of loan applications received by the credit union. 2. The number, type and aggregate value of loans that were granted. 3. The number of loan applications that were denied. 4. The security obtained for each loan of an amount greater than that specified by the credit union’s lending policies and procedures. 5. The number and status of delinquent loans and the details of each loan that is more than 90 days in arrears. 6. The number of and status of loans, i. for which the due date was postponed for all or part of a payment of interest or a repayment of any principal, ii. for which any security was substituted or released, or iii. that were renegotiated because of a change in the borrower’s circumstances. (2) The report must be made on a monthly basis and must be in writing. O. Reg. 76/95, s. 24.
Credit Committee
25. (1) The following information must be included in the report of the credit committee to the membership under subsection 120 (2) of the Act: 1. The number of loan applications received by the credit union. 2. The number, type and aggregate value of loans that were granted. 3. The number of loan applications that were denied. 4. The number and aggregate value of delinquent loans that are more than 90 days in arrears. (2) The report must be in writing. O. Reg. 76/95, s. 25. Audit Committee
Audit Committee
26. The duties of the audit committee of a credit union are the following: 1. Review the annual audited financial statements and make such recommendations to the board as the committee considers appropriate. 2. Review the audited financial statements of each subsidiary of the credit union. 3. Review and make recommendations to the board about the terms of the engagement letter and the remuneration of the auditor. 4. Review with the auditor the scope and plan of an audit. 5. Discuss with the auditor the audit findings, any restrictions on the scope of the auditor’s work and any problems that the auditor experienced in performing the audit. 6. Review and make recommendations to the board about any management letters, recommendations and reports by the auditor about the business or financial statements of the credit union and any response to them by management of the credit union. 7. Report to the board on any conflict between the auditor and management that the committee is unable to resolve within a reasonable time. 8. Recommend to the board arrangements to safeguard the credit union’s assets, to ensure the timeliness, accuracy and reliability of accounting data, to maintain adherence to the lending and investment policies and procedures and to provide for other matters concerning the financial policies of the credit union. 9. Report to the board any significant changes in the accounting principles and practices followed by the credit union. 10. Review the organization and assess the degree of independence of the credit union’s internal auditors, if any, including their goals, work plans and any problems that they experience in performing audits. 11. Review those recommendations of the internal auditors that they consider to be significant concerning the improvement of accounting practices and internal control practices and review any response to them by management of the credit union. 12. Review the credit union’s disaster recovery plans. 13. Review the credit union’s policies and procedures governing the way in which it meets the requirements under the Act about liquidity, capital adequacy and interest rate risk management. 14. Review material legal proceedings to which the credit union is a party. 15. Assess whether the credit union has enough staff to fulfill its accounting and financial responsibilities. 16. Monitor the adherence of the credit union’s directors, officers and employees to its code of conduct. 17. Review any report about the affairs of the credit union made by the Superintendent, the deposit insurer or a stabilization authority, monitor the implementation of recommendations that the committee considers significant and report to the board on the progress of the implementation. O. Reg. 76/95, s. 26; O. Reg. 314/98, s. 12. Bond from Officers and Employees
Bond from Officers and Employees
27. The minimum amount of the bond that an officer or employee is required by subsection 151 (1) of the Act to furnish is the lesser of $1 million or the amount of the credit union’s total assets as shown on its most recent financial statements. O. Reg. 76/95, s. 27. PART VII   RESTRICTIONS ON BUSINESS POWERS Definitions
Definitions
28. In this Part, “authorized types of insurance” means the types of insurance listed in subsection 34 (1); (“types d’assurance autorisés”) “insurance company” means an entity that is authorized under an Act of Parliament or of the legislature of a province to insure risks.(“compagnie d’assurance”) O. Reg. 76/95, s. 28; O. Reg. 414/97, s. 1. Ancillary Businesses
Ancillary Businesses
29. A credit union may engage in the following trades or businesses: 1. Operating a post office. 2. Operating a motor vehicle licence bureau. 3. Acting as an agent to receive payments for utility bills, realty tax, personal income tax and for similar transactions. 4. Providing facsimile transmission facilities. O. Reg. 76/95, s. 29. Financial Services
Financial Services
30. A credit union shall not directly provide the following financial services: 1. Services provided by a factoring corporation described in subsection 74 (2). 2. Services provided by an investment counselling and portfolio management corporation described in subsection 74 (5). 3. Services provided by a mutual fund corporation described in subsection 74 (6). 4. Services provided by a mutual fund distribution corporation described in subsection 74 (7). 5. Services provided by a securities dealer described in subsection 74 (10). O. Reg. 76/95, s. 30.
Financial Services
31. (1) A credit union or subsidiary must not enter into a financial lease agreement or a conditional sales agreement unless the agreement meets the following requirements: 1. The agreement concerns personal property, i. selected by the lessee or purchaser and acquired by the credit union or subsidiary at the request of the lessee or purchaser, or ii. previously acquired by the credit union or subsidiary under another financial lease agreement or conditional sales agreement. 2. The primary purpose of the agreement is to extend credit to the lessee or purchaser. 3. The agreement is for a fixed term. (2) A credit union or subsidiary must not direct a customer or prospective customer to particular dealers for the sale of personal property under a conditional sales agreement. (3) A financial lease agreement or conditional sales agreement must yield, (a) a reasonable rate of return; and (b) a return that at least equals the investment by the subsidiary in the property that is the subject of the agreement, taking into account in the case of a financial lease agreement, (i) rental charges payable or paid by the lessee, (ii) tax benefits to the credit union or subsidiary, and (iii) the guaranteed purchase or resale price, if any, for the property at the expiry of the agreement or the lesser of the estimated residual value of the property and 25 per cent of the original acquisition cost to the credit union or subsidiary. (4) The financial lease agreement or conditional sales agreement must set out the responsibilities of the credit union or its subsidiary respecting the benefit of the warranties, guarantees and undertakings made by the manufacturer or supplier of the property. (5) The aggregate estimated residual value of all property held by a credit union and its subsidiaries under financial lease agreements must not exceed 10 per cent of the aggregate original acquisition cost. (6) This section does not apply with respect to agreements in which the credit union or its subsidiary is the lessee or conditional purchaser. O. Reg. 76/95, s. 31. Networking
Networking
32. (1) For the purposes of subsection 174 (4) of the Act, the following are the prescribed persons or entities in respect of which a credit union may act as agent: 1. A financial institution. 2. The deposit insurer. 3. Credit Union Central of Canada. 4. Caisse Centrale Desjardins. 4.1 Credit Union Central of British Columbia. 5. A financial leasing corporation described in subsection 74 (3). 6. A mutual fund corporation described in subsection 74 (6). 7. A mutual fund distribution corporation described in subsection 74 (7). O. Reg. 76/95, s. 32 (1); O. Reg. 314/98, s. 13; O. Reg. 298/07, s. 7. (2) A credit union may act as agent for the deposit insurer only with respect to the administration of deposits under a deposit administration agreement. O. Reg. 76/95, s. 32 (2). (3) A credit union may act as agent for an entity that is a party to a syndicated loan agreement described in subsection 60 (2) only for the purpose of syndicating a loan. O. Reg. 76/95, s. 32 (3).
Networking
33. (1) A credit union that is acting as agent for a financial institution in respect of the provision of a service may, (a) enter into an agreement with the financial institution concerning the provision of the service; or (b) refer a person to the financial institution. O. Reg. 76/95, s. 33. (2) A credit union that is acting as agent for Credit Union Central of British Columbia in respect of the provision of a service may, (a) enter into an agreement with Credit Union Central of British Columbia concerning the provision of the service; or (b) refer a person to Credit Union Central of British Columbia. O. Reg. 298/07, s. 8. Authorized Types of Insurance
Authorized Types of Insurance
35. (1) A credit union may administer a group insurance policy described in section 34 only for its members, its employees or the employees of its subsidiaries. (2) A group insurance policy is a contract of insurance between an insurance company and the credit union that provides insurance severally for a group of identifiable persons who individually hold certificates of insurance. O. Reg. 76/95, s. 35.
Authorized Types of Insurance
36. (1) A credit union may provide advice about an authorized type of insurance. (2) A credit union may provide advice in respect of another type of insurance only if, (a) the advice is general in nature; and (b) the advice is not about a specific risk, a particular proposal respecting life insurance or a particular insurance policy, insurance company, agent, broker or service. (3) A credit union may provide services in respect of an authorized type of insurance. (4) A credit union may provide services in respect of another type of insurance only if the credit union does not refer a person to a particular insurance company, agent or broker. O. Reg. 76/95, s. 36. Restrictions on Insurance
Restrictions on Insurance
37. A credit union shall not underwrite insurance. O. Reg. 76/95, s. 37.
Restrictions on Insurance
38. (1) A credit union shall not act as an agent for any person in the placing of insurance. (2) A credit union shall not lease or provide space in its head office or any other of its offices to a person placing insurance. O. Reg. 76/95, s. 38.
Restrictions on Insurance
39. (1) A credit union that carries on business in premises adjacent to an office of an insurance company, agent or broker shall clearly indicate to its customers that the credit union’s premises are separate and distinct from the premises of the insurance company, agent or broker. (2) The premises of the credit union must be separate and distinct from the premises of the insurance company, agent or broker. O. Reg. 76/95, s. 39.
Restrictions on Insurance
40. A credit union shall not provide a telecommunications device that is primarily for the use of its customers to link a customer with an insurance company, agent or broker. O. Reg. 76/95, s. 40.
Restrictions on Insurance
41. (1) A credit union shall not promote an insurance company, agent or broker unless, (a) the company, agent or broker deals only in authorized types of insurance; or (b) the promotion takes place outside the head office and any other office of the credit union, and is directed to, (i) all of the holders of credit cards or charge cards issued by the credit union to whom statements of account are mailed regularly, (ii) all of the credit union members who are individuals and to whom statements of account are mailed regularly, or (iii) the general public. (2) A credit union shall not promote an insurance policy of an insurance company, agent or broker, or a service provided in respect of such a policy, unless, (a) the policy is of an authorized type of insurance or the service is in respect of such a policy; (b) the policy is to be provided by a corporation without share capital (other than a mutual insurance company or a fraternal benefit society) that carries on business without pecuniary gain to its members and the policy provides insurance to an individual in respect of the risks covered by travel insurance; (c) the service is in respect of a policy described in clause (b); or (d) the promotion takes place outside the head office of the credit union and any other office of the credit union, and is directed to, (i) all of the holders of credit cards or charge cards issued by the credit union to whom statements of account are mailed regularly, (ii) all of the credit union members who are individuals and to whom statements of account are mailed regularly, or (iii) the general public. (3) A credit union may exclude the following persons from a promotion described in clause (1) (b) or (2) (d): 1. Persons in respect of whom the promotion would contravene an Act of Parliament or of the legislature of a province. 2. Persons who have notified the credit union in writing that they do not wish to receive promotional material from the credit union. 3. Persons who hold a credit card or charge card issued by the credit union in respect of which the account is not in good standing. O. Reg. 414/97, s. 2.
Restrictions on Insurance
42. (1) Except as permitted by this section, a credit union shall not directly or indirectly give an insurance company, agent or broker information about, (a) a member of the credit union; (b) an employee of the member; (c) if the member is an entity with its own members, a member of the entity; or (d) if the member has partners, a partner of the member. (2) A credit union shall not permit its subsidiary to give directly or indirectly to an insurance company, agent or broker information that the subsidiary receives from the credit union. (3) A credit union shall not permit a subsidiary that is a loan or trust corporation to give directly or indirectly to an insurance company, agent or broker information about, (a) a customer of the subsidiary; (b) an employee of the customer; (c) if the customer is an entity with members, a member of the customer; or (d) if the customer has partners, a partner of the customer. O. Reg. 76/95, s. 42 (1-3). (4) A credit union or a subsidiary that is a loan or trust corporation may give information to an insurance company, agent or broker if, (a) the credit union or subsidiary has established procedures to ensure that the insurance company, agent or broker does not use the information to promote himself, herself or itself or an insurance policy or services respecting an insurance policy; and (b) the insurance company, agent or broker has given an undertaking to the credit union or subsidiary, in a form acceptable to the Superintendent, that he, she or it will not use the information for such a purpose. O. Reg. 76/95, s. 42 (4); O. Reg. 314/98, s. 14. (5) In this section, “loan or trust corporation” means a loan or trust corporation incorporated under the Loan and Trust Corporations Act or an Act of the legislature of another province. O. Reg. 76/95, s. 42 (5). Fiduciary Activities
Fiduciary Activities
43. A credit union is authorized under section 177 of the Act to act as a trustee with respect to, (a) deposits under registered savings plans, registered retirement income funds and registered education savings plans under the Income Tax Act (Canada); (b) trust funds established under the Cemeteries Act (Revised); (c) loan proceeds and security under loan participation agreements and syndication agreements; and (d) escrow agreements under Ontario Regulation 45/94 made under the Community Economic Development Act, 1993. O. Reg. 76/95, s. 43. Guarantees
Guarantees
44. For the purposes of the Act, “guarantee” includes the issuance of a letter of credit. O. Reg. 76/95, s. 44.
Guarantees
45. For the purposes of subsection 178 (3) of the Act, the following are the prescribed conditions and restrictions on a guarantee: 1. The guarantee must have a fixed term. 2. The credit union shall not guarantee an obligation, other than its own obligation or one of its subsidiary, unless the credit union has received security at least equal to the amount of the obligation guaranteed. O. Reg. 76/95, s. 45.
Guarantees
46. For the purposes of subsection 178 (4) of the Act (limit on the amount of guarantees), the prescribed percentage is 10 per cent. O. Reg. 76/95, s. 46. PART VIII   INVESTMENT AND LENDING Interpretation
Interpretation
47. In this Part, “unincorporated association” does not include a partnership registered under the Business Names Act. O. Reg. 76/95, s. 47.
Interpretation
48. For the purposes of this Part, a credit union’s regulatory capital is determined by using its most recent audited financial statements. O. Reg. 560/06, s. 7. Exception Re Pledging of Assets
Exception Re Pledging of Assets
49. (1) For the purposes of subsection 185 (5) of the Act, the prescribed amount is the greater of $25,000 or 1 per cent of the credit union’s assets. O. Reg. 76/95, s. 49 (1). (2) For the purposes of subsection 185 (5) of the Act, the following classes of personal property are prescribed: 1. A general security agreement and assignment of book debts given to a league or Credit Union Central of British Columbia by a member of a liquidity pool to secure its obligations as a member of the pool. 2. A security interest in the assets of a liquidity pool given by a league to secure an obligation to the Bank of Canada, Credit Union Central of Canada or Caisse Centrale Desjardins or to secure a line of credit described in subsection 19 (5). O. Reg. 76/95, s. 49 (2); O. Reg. 298/07, s. 9. Investment and Lending Policies and Procedures
Investment and Lending Policies and Procedures
50. For the purposes of subsection 191 (2) of the Act, the prescribed requirements and the prescribed standards, conditions and restrictions for a credit union’s investment and lending policies and procedures are as set out in the Guideline for Prudent Investment and Lending Policies and Procedures for Ontario’s Credit Unions and Caisses Populaires, published in The Ontario Gazette by the Superintendent, as it may be amended from time to time. O. Reg. 314/98, s. 15. Classes of Loans
Classes of Loans
51. The following are prescribed as classes of loans: 1. Agricultural loans. 2. Bridge loans. 3. Commercial loans. 4. Institutional loans. 5. Personal loans. 6. Residential mortgage loans. 7. Syndicated loans. 8. Loans to unincorporated associations. O. Reg. 76/95, s. 51.
Classes of Loans
52. An agricultural loan is a loan that is made for the purposes of financing, (a) the production of cultivated or uncultivated field-grown crops; (b) the production of horticultural crops; (c) the raising of livestock, fish, poultry or fur-bearing animals; or (d) the production of eggs, milk, honey, maple syrup, tobacco, wood from woodlots or fibre or fodder crops. O. Reg. 560/06, s. 8.
Classes of Loans
53. A bridge loan is a loan to an individual made under the following circumstances: 1. The loan is for the purchase of residential property in which the purchaser will reside. The property must consist of four units or less. 2. The term of the loan is not greater than 120 days. 3. The funds from the sale of another residential property owned by the individual will be used to repay the loan. 4. The credit union must receive a copy of the executed purchase and sale agreement for both properties before the loan is made. 5. The conditions of each of the purchase and sale agreements must be satisfied before the loan is made. 6. The loan is fully secured by a mortgage on the residential property being sold or, before the loan is made, the borrower’s solicitor has given the credit union an irrevocable letter of direction from the borrower stating that the funds from the sale of the residential property being sold will be remitted to the credit union. O. Reg. 76/95, s. 53; O. Reg. 560/06, s. 9.
Classes of Loans
54. A commercial loan is a loan, other than any of the following types of loans, that is made for any purpose: 1. An agricultural loan, a bridge loan, an institutional loan, a personal loan, a residential mortgage loan. 2. A loan to an unincorporated association. 3. A deposit made by the credit union with a financial institution or Credit Union Central of British Columbia. 4. A loan that is fully secured by a deposit with a financial institution, including the credit union making the loan. 5. A loan that is fully secured by debt obligations that are guaranteed by a financial institution other than the credit union making the loan. 6. A loan that is fully secured by a guarantee of a financial institution other than the credit union making the loan. 7. An investment in a debt obligation that is, i. fully guaranteed by a financial institution other than the credit union making the loan, ii. fully secured by deposits with a financial institution, including the credit union making the loan, or iii. fully secured by debt obligations that are fully guaranteed by a financial institution other than the credit union making the loan. 8. An investment in a debt obligation issued by the Government of Canada, the government of a province or territory of Canada or a municipality or by an agency of such a government or municipality. 9. An investment in a debt obligation guaranteed by, or fully secured by securities issued by, the Government of Canada, the government of a province or territory of Canada or a municipality or by an agency of such a government or municipality. 10. An investment in a debt obligation issued by a league or Credit Union Central of British Columbia. 11. An investment in a debt obligation that is widely-distributed. 12. An investment in shares or ownership interests that are widely-distributed. 13. An investment in a participating share. 14. An investment in shares of a league or Credit Union Central of British Columbia. O. Reg. 76/95, s. 54; O. Reg. 560/06, s. 10; O. Reg. 298/07, s. 10.
Classes of Loans
55. An institutional loan is a loan given to, (a) the Government of Canada or an agency of the Government; (b) the government of a province or territory of Canada or an agency of one; (c) a municipality or an agency of one; (d) a school board; or (e) an entity funded primarily by the Government of Canada, the government of a province or territory of Canada or a municipality. O. Reg. 76/95, s. 55.
Classes of Loans
56. A personal loan is a loan given to, (a) an individual for personal, family or household use; or (b) an individual or an entity for any other use if the loan does not exceed $25,000 and if the total outstanding amount of such loans to him, her or it and to connected persons does not exceed $25,000. O. Reg. 76/95, s. 56.
Classes of Loans
57. A residential mortgage loan is a loan that is secured by a mortgage on residential property that is occupied by the borrower and to which any of the following apply: 1. The amount of the loan, together with the amount then outstanding of any mortgage having an equal or prior claim against the residential property, does not exceed 80 per cent of the value of the property when the loan is made. 2. The loan is insured under the National Housing Act (Canada), guaranteed by a government agency or insured by an insurer approved by the Superintendent. 3. Repayment of any amount of the loan that exceeds 80 per cent of value of the property is guaranteed by a government agency or insured by an insurer approved by the Superintendent. O. Reg. 560/06, s. 11; O. Reg. 297/07, s. 1. Classes of Lending Licence
Classes of Lending Licence
58. The following are the classes of lending licence that may be issued under the Act: 1. Agricultural lending licence. 2. Commercial lending licence. 3. Institutional lending licence. 4. Personal lending licence. 5. Residential mortgage and bridge loan lending licence. 6. Syndication licence. 7. Unincorporated association lending licence. O. Reg. 76/95, s. 58.
Classes of Lending Licence
58.1 A lending licence issued before January 1, 2007 expires at the end of the day on January 31, 2007. O. Reg. 560/06, s. 12.
Classes of Lending Licence
59. (1) A credit union may make loans only in accordance with its lending licence. (2) If a credit union is deemed under subsection 196 (5) of the Act to hold a lending licence, the deemed licence includes all conditions and limitations established in the credit union’s by-laws governing loans made under the deemed licence. O. Reg. 76/95, s. 59.
Classes of Lending Licence
60. (1) A credit union may act as the syndicating credit union under a syndicated loan agreement only if authorized to do so under a syndication licence. O. Reg. 76/95, s. 60 (1). (2) A syndicated loan agreement is an agreement in which each of the parties agrees to contribute a portion of the amount of a loan that is being given to a member of a credit union under a loan agreement between the member and the party to the syndicated loan agreement that is acting as the syndicating credit union. O. Reg. 76/95, s. 60 (2). (3) The parties to a syndicated loan agreement are the credit union acting as the syndicating credit union and one or more of the following: 1. Another credit union. 2. A subsidiary or affiliate of the credit union. 3. A league or Credit Union Central of British Columbia. 4. A financial institution other than a securities dealer. O. Reg. 76/95, s. 60 (3); O. Reg. 298/07, s. 11. (4) A credit union must lend at least 10 per cent of the total amount of all loans made under the syndicated loan agreements for which the credit union acts as the syndicating credit union. O. Reg. 560/06, s. 13. (5) This section does not apply with respect to a syndicated loan agreement entered into before March 1, 1995, but does apply with respect to any renegotiation or renewal of such an agreement after that date. O. Reg. 76/95, s. 60 (5). Lending Limits lending limits — total amount of loans to person