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BILL NO. 97

(as introduced)

2nd Session, 63rd General Assembly
Nova Scotia
68 Elizabeth II, 2019

 

Government Bill

 

Credit Union Act
(amended)

 

The Honourable Karen Casey
Minister of Finance and Treasury Board



First Reading: March 6, 2019

(Explanatory Notes)

Second Reading:

Third Reading:

Explanatory Notes

Clause 1

(a) increases from 10 to 50 the minimum number of persons required to apply for incorporation as a credit union; and

(b) lowers the minimum age of a person who may apply from 19 to 18 years.

Clause 2 permits electronic voting at credit union meetings in addition to voting by ballot or mail.

Clause 3 requires credit unions to act in accordance with the directives of the Nova Scotia Credit Union Deposit Insurance Corporation.

Clause 4 amends a heading to include a reference to branches.

Clause 5 adds the power to close a branch office of a credit union in such manner as is prescribed by the regulations.

Clause 6 prevents credit unions from disclosing residential addresses and any other information protected by privacy legislation to the members, creditors and shareholders of a credit union, their agents and legal representatives.

Clause 7 updates the term "doubtful accounts" to "impaired accounts".

Clause 8 requires a credit union to establish and adhere to liquidity policies.

Clause 9 updates the term "doubtful accounts" to "impaired accounts".

Clause 10 requires a credit union to establish and adhere to equity policies.

Clause 11 provides that the procedure for approval of membership in a credit union is as set out in the charter by-laws and lowers the minimum age for membership to 18 years.

Clause 12 provides that the procedure for termination of membership in a credit union is as set out in the charter by-laws.

Clause 13

(a) lowers the voting age at a meeting of members of the credit union from19 to 18 years; and

(b) permits an individual authorized to represent a body corporate at meetings of members of the credit union to also vote on the individual's own behalf as a member of the credit union.

Clause 14 allows a credit union to permit electronic voting in its charter by-laws.

Clause 15 increases the number of members required to demand a secret ballot from one to three.

Clause 16 amends the number of members required to call a special meeting from 25 to the lesser of 5% of the membership and 250.

Clause 17 adds permanent residents to those individuals who are eligible to be a director of the credit union and lowers the age of qualification from 19 to 18 years.

Clause 18 provides that directors appointed as part of an amalgamation agreement may serve terms as provided in the amalgamation agreement.

Clauses 19 and 20 permit a credit union to address the removal of a director in its articles or charter by-laws.

Clause 21 clarifies that a director who is notified or learns of an action to remove or replace the director may submit a written statement to the credit union in opposition.

Clause 22 allows a vacancy among directors to be filled pursuant to the articles or charter by-laws.

Clause 23 changes the reporting standards for financial statements to the International Financial Reporting Standards.

Clause 24 changes the reporting standards for an auditor's examination to the International Financial Reporting Standards.

Clause 25

(a) gives the Nova Scotia Credit Union Deposit Insurance Corporation the authority to access the working papers of the auditor; and

(b) changes a reference to "an auditor" to "an auditor of a credit union".

Clause 26 gives the Corporation the authority to issue or withdraw directives respecting an intervention system.

Clause 27 requires the Corporation to follow the directives of the Superintendent.

Clause 28 lowers the age of eligibility to eighteen for board members of the Corporation.

Clause 29 requires Atlantic Central to follow the directives of the Superintendent.

Clause 30 adds permanent residents to those individuals eligible to be a director of Atlantic Central and lowers the age of qualification from 19 to 18 years.

Clause 31 adds former members to those entitled to bring an action against a credit union.

Clause 32 gives the Supreme Court of Nova Scotia the power to make an order reinstating a former member or director or instating a person who was refused membership.

Clause 33

(a) defines prudential standards; and

(b) gives the Superintendent of Credit Unions the authority to

    (i) issue directives including respecting prudential standards to the Atlantic Central and the Nova Scotia Deposit Insurance Corporation,

    (ii) vary liquidity reserves on an application by a credit union that has been reviewed and recommended by the Corporation,

    (iii) delegate the Superintendent's oversight of the Central to a third party, and

    (iv) recover costs from the Central associated with the supervision of the Central.

Clause 34 exempts the Superintendent from the Freedom of Information and Protection of Privacy Act and the Personal Information International Disclosure Protection Act for the purpose of providing and receiving information from other governmental or regulatory agencies and from disclosing it if the Superintendent determines it should be held in confidence.

Clause 35 allows for electronic notice to directors.

Clause 36

(a) adds to the Governor in Council's regulation-making power respecting

    (i) the requirements for notice and consultation that must be undertaken before a credit union may close a branch office, and

    (ii) policies governing adequate liquidity and equity; and

(b) updates language in the Act.

Clause 37 provides that the Act comes into effect upon proclamation.

An Act to Amend Chapter 4
of the Acts of 1994,
the Credit Union Act

Be it enacted by the Governor and Assembly as follows:

1 Subsection 5(1) of Chapter 4 of the Acts of 1994, the Credit Union Act, as enacted by Chapter 11 of the Acts of 2004, is amended by

(a) striking out "ten" in the first line and substituting "fifty"; and

(b) striking out "nineteen" in the first line of clause (a) and substituting "eighteen".

2 Clause 6(4)(b) of Chapter 4 is amended by striking out ", or both" in the fifth line and substituting "or electronically, or any two or all three".

3 Chapter 4 is further amended by adding immediately after Section 19 the following Section:

    19A A credit union shall act in accordance with the directives of the Corporation.

4 The heading immediately before Section 22 of Chapter 4 is amended by adding ", BRANCHES" immediately after "OFFICE".

5 (1) Subsection 22(5) of Chapter 4 is repealed.

(2) Chapter 4 is further amended by adding immediately after Section 22 the following Section:

    22A A credit union may establish, relocate or close branch offices of the credit union as prescribed.

6 Section 24 of Chapter 4 is amended by adding immediately after subsection (3) the following subsection:

    (3A) Notwithstanding subsections (1), (2) and (3), a credit union may not disclose a residential address or any other information protected by privacy legislation kept by the credit union under clauses 23(1)(c), (d) and (e).

7 Subsection 32(1) of Chapter 4, as amended by Chapter 11 of the Acts of 2004, is further amended by striking out "doubtful" in the second line and substituting "impaired".

8 Section 49 of Chapter 4 is amended by adding immediately after subsection 49(2) the following subsection:

    (3) A credit union shall establish and adhere to liquidity policies for the credit union consistent with the regulations governing adequate liquidity.

9 Section 51 of Chapter 4 is amended by striking out "doubtful" in the second line and substituting "impaired".

10 Section 52 of Chapter 4 is amended by adding immediately after subsection (2) the following subsection:

    (3) A credit union shall establish and adhere to equity policies for the credit union consistent with the regulations governing equity.

11 (1) Subsection 56(1) of Chapter 4 is repealed and the following subsection substituted:

    (1) The membership of a credit union consists of its incorporators and other members defined in accordance with this Act and the charter by-laws of the credit union.

(2) Subsection 56(2) of Chapter 4 is amended by striking out "The" in the first line and substituting "Subject to the charter by-laws of the credit union, the".

(3) Subsection 56(3) of Chapter 4 is amended by striking out "nineteen" in the first line and substituting "eighteen".

12 Section 59 of Chapter 4 is repealed and the following Section substituted:

    59 Membership in a credit union may be terminated, withdrawn or refused in accordance with the charter by-laws of the credit union.

13 (1) Subsection 71(1) of Chapter 4 is amended by striking out "nineteen" in the first line and substituting "eighteen".

(2) Subsection 71(2) of Chapter 4 is amended by adding "subsection (3) and" immediately after "to" in the first line.

(3) Section 71 of Chapter 4 is further amended by adding immediately after subsection (2) the following subsection:

    (3) An individual authorized pursuant to subsection 72(1) may vote on behalf of a body corporate or association the individual is authorized to represent and, where the individual is a member, on the individual's own behalf as well.

14 Section 75 of Chapter 4 is amended by adding ", electronically" immediately after "ballot" in the last line.

15 (1) Subsection 77(1) of Chapter 4 is amended by striking out "a member" in the third line and substituting "at least three members".

(2) Subsection 77(2) of Chapter 4 is amended by striking out "A member" in the first line and substituting "The members referred to in subsection (1)".

16 Subsection 78(1) of Chapter 4, as amended by Chapter 11 of the Acts of 2004, is further amended by striking out "Twenty-five" in the first line and substituting "The lesser of five per cent of the membership at the end of the last fiscal year and two hundred fifty".

17 Subsection 82(1) of Chapter 4, as amended by Chapter 11 of the Acts of 2004 and Chapter 49 of the Acts of 2010, is further amended by striking out "of Canada who is nineteen" in the first line and substituting "or permanent resident of Canada who is eighteen".

18 Section 83 of Chapter 4 is amended by adding immediately after subsection (6) the following subsection:

    (7) Notwithstanding anything in this Section, a director appointed as part of an amalgamation agreement may serve such term provided for in the amalgamation agreement.

19 Clause 84(1)(b) of Chapter 4 is amended by adding "the articles or charter by-laws or" immediately after "with" in the second line.

20 Subsection 85(1) of Chapter 4 is amended by striking out "The" in the first line and substituting "Unless the articles or charter by-laws otherwise provide, the".

21 Subsection 86(1) of Chapter 4 is amended by

(a) striking out "a meeting of members called for the purpose of removing" in the second and third lines of clause (b) and substituting "an intended action to remove"; and

(b) striking out "a meeting of directors or members at which another person is to be appointed or elected" in the second and third lines of clause (c) and substituting "an intended action to appoint or elect another person".

22 Subsection 87(1) of Chapter 4 is amended by striking out "Subject" in the first line and substituting "Unless the articles or charter by-laws otherwise provide, subject".

23 Subsection 105(2) of Chapter 4, as amended by Chapter 30 of the Acts of 2015, is further amended by striking out "generally accepted accounting principles" in the fourth and fifth lines and substituting "International Financial Reporting Standards".

24 Subsection 116(2) of Chapter 4, as amended by Chapter 30 of the Acts of 2015, is further amended by striking out "generally accepted auditing standards" in the fourth and fifth lines and substituting "International Financial Reporting Standards".

25 Section 122 of Chapter 4 is amended by

(a) adding "or the Corporation" immediately after "Superintendent" in the first and in the second lines; and

(b) striking out "the auditor" in the first line and substituting "an auditor of a credit union".

26 Section 157 of Chapter 4, as amended by Chapter 11 of the Acts of 2004, is further amended by adding immediately after clause (pb) the following clause:

    (pc) issue or withdraw directives with respect to an intervention system;

27 Chapter 4 is further amended by adding immediately after Section 157 the following Section:

    157A The Corporation shall act in accordance with the directives of the Superintendent.

28 Subsection 160(1) of Chapter 4, as amended by Chapter 11 of the Acts of 2004, Chapter 36 of the Acts of 2007 and Chapter 49 of the Acts of 2010, is further amended by striking out "nineteen" in the first line and substituting "eighteen".

29 Section 189 of Chapter 4, as amended by Chapter 49 of the Acts of 2010, is further amended by

(a) adding "(1)" immediately after the Section number; and

(b) adding immediately after subsection (1) as numbered by clause (a) the following subsection:

    (2) The Central shall act in accordance with the directives of the Superintendent.

30 Subsection 210(1) of Chapter 4, as amended by Chapter 49 of the Acts of 2010, is further amended by

(a) adding "or permanent resident" immediately after "citizen" in the first line; and

(b) striking out "nineteen" in the second line and substituting "eighteen".

31 Clause 215(b) of Chapter 4 is amended by adding "or former member" immediately after "member" in subclause (i).

32 Subsection 218(3) of Chapter 4 is amended by adding immediately after clause (a) the following clause:

    (aa) an order reinstating a former member as a member or a former director as a director or instating a person who was refused membership;

33 Section 225 of Chapter 4 is further amended by

(a) adding "(2)" immediately after the Section number;

(b) adding immediately before subsection (2) the following subsection:

    (1) For the purpose of this Section, "prudential standards" means the principles and minimum requirements adopted by the Superintendent for corporate governance, level of liquidity and equity that contribute to sound and prudent operations of the Central and the Corporation to manage exposure to risk.

(c) striking out "and" immediately after clause 2(c);

(d) striking out the period at the end of clause 2(d) and substituting a semi-colon; and

(e) adding immediately after clause 2(d) the following clauses:

    (e) may issue directives to the Central including directives with respect to the prudential standards of the Central;

    (f) may issue directives to the Corporation including directives with respect to the prudential standards of the Corporation;

    (g) may vary the liquidity reserves required for a credit union by the regulations if an application by the credit union for a variation has been reviewed and recommended by the Corporation and, in the opinion of the Superintendent, the outcome is consistent with the purpose of this Act;

    (h) may delegate oversight of the operations of the Central to a third party; and

    (i) may recover from the Central costs associated with the supervision of the Central.

34 Chapter 4 is further amended by adding immediately after Section 225 the following Section:

    225A (1) Notwithstanding the Freedom of Information and Protection of Privacy Act and the Personal Information International Disclosure Protection Act, the Superintendent may provide information to and receive information from other governmental or regulatory authorities, both in Canada and outside of Canada, approved by the Superintendent to facilitate the exchange of information pursuant to this Act and the regulations.

    (2) The Superintendent is exempt from the disclosure of information obtained pursuant to subsection (1) if the Superintendent determines the information should be maintained in confidence.

35 Subsection 248(1) of Chapter 4 is amended by adding "electronically to the person at the latest electronic mail address of the person as shown in the records of the credit union or the Central," immediately after "sent" in the sixth line.

36 Subsection 257(1) is amended by

(a) adding immediately after clause (e) the following clause:

    (ea) respecting the notice and consultation required before a credit union may close a branch office;

(b) adding ", and policies governing adequate liquidity," immediately after "reserves" in the first line of clause (o);

(c) striking out "doubtful" in the first line of clause (q) and substituting "impaired"; and

(d) adding ", and policies governing equity," immediately after "equity" in the first line of clause (r).

37 This Act comes into force on such day as the Governor in Council orders and declares by proclamation.

 


This page and its contents published by the Office of the Legislative Counsel, Nova Scotia House of Assembly, and © 2019 Crown in right of Nova Scotia. Created March 6, 2019. Send comments to legc.office@novascotia.ca.