Cooperative Credit Associations Act (S.C. 1991, c. 48)

Supervisory Intervention

Marginal note:Superintendent may take control

• 442 (1) Subject to this Act, where any of the circumstances described in subsection (1.1) exist in respect of an association, the Superintendent may

  • (a) take control, for a period not exceeding sixteen days, of the assets of the association and the assets held under the administration of the association; or

  • (b) unless the Minister advises the Superintendent that the Minister is of the opinion that it is not in the public interest to do so,

    • (i) take control, for a period exceeding sixteen days, of the assets of the association and the assets held under the administration of the association,

    • (ii) where control of assets has been taken under paragraph (a), continue the control beyond the sixteen days referred to in that paragraph, or

    • (iii) take control of the association.

• Marginal note:Circumstances for taking control

  (1.1) Control by the Superintendent under subsection (1) may be taken in respect of an association where

  • (a) the association has failed to pay its liabilities or, in the opinion of the Superintendent, will not be able to pay its liabilities as they become due and payable;

  • (b) [Repealed, 2001, c. 9, s. 335]

  • (c) the assets of the association are not, in the opinion of the Superintendent, sufficient to give adequate protection to its depositors and creditors;

  • (d) any asset appearing on the books or records of the association or held under the administration of the association is not, in the opinion of the Superintendent, satisfactorily accounted for;

  • (e) the regulatory capital of the association has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its depositors and creditors;

  • (f) the association has failed to comply with an order of the Superintendent under paragraph 409(3)(a);

  • (g) in the case of a retail association, the association’s deposit insurance has been terminated by the Canada Deposit Insurance Corporation; or

  • (h) in the opinion of the Superintendent, any other state of affairs exists in respect of the association that may be materially prejudicial to the interests of the depositors or creditors of the association or to those of the owners of any assets under the association’s administration.

• Marginal note:Notice of proposed action

  (1.2) The Superintendent must notify an association of any action proposed to be taken in respect of it under paragraph (1)(b) and of its right to make written representations to the Superintendent within the time specified in the notice, not exceeding 10 days after it receives the notice.

• Marginal note:Objectives of Superintendent

  (2) If, pursuant to subsection (1), the Superintendent has control of the assets of an association referred to in that subsection, the Superintendent may do all things necessary or expedient to protect the rights and interests of the depositors and creditors of the association.

• Marginal note:Powers of Superintendent

  (3) Where, pursuant to subsection (1), the Superintendent has control of the assets of an association referred to in that subsection,

  • (a) the association shall not make, acquire or transfer any loan or make any purchase, sale or exchange of membership shares or securities or any disbursement or transfer of cash of any kind without the prior approval of the Superintendent or a representative designated by the Superintendent; and

  • (b) no director, officer or employee of the association shall have access to any cash or securities held by or under the administration of the association unless

    • (i) a representative of the Superintendent accompanies the director, officer or employee, or

    • (ii) the access is previously authorized by the Superintendent or the Superintendent’s representative.

443 to 445 [Repealed, 1996, c. 6, s. 61]

Marginal note:Powers of directors and officers suspended

• 446 (1) Where the Superintendent takes control of an association pursuant to subparagraph 442(1)(b)(iii), the powers, duties, functions, rights and privileges of the directors of the association and of the officers of the association responsible for its management are suspended.

• Marginal note:Superintendent to manage association

  (2) Where the Superintendent takes control of an association pursuant to subparagraph 442(1)(b)(iii), the Superintendent shall manage the business and affairs of the association and in so doing the Superintendent

  • (a) may perform any of the duties and functions that the persons referred to in subsection (1) were performing prior to the taking of control; and

  • (b) has and may exercise any power, right or privilege that any such person had or could have exercised prior to the taking of control.

• Marginal note:Persons to assist

  (3) Where the Superintendent takes control of an association pursuant to subparagraph 442(1)(b)(iii), the Superintendent may appoint one or more persons to assist in the management of the association.

Marginal note:Expiration of control

447 Control by the Superintendent under subsection 442(1) of an association or of the assets of an association and the assets held under the administration of the association expires on the day on which a notice by the Superintendent is sent to the directors and officers who conducted the business and affairs of the association stating that the Superintendent is of the opinion that the circumstances leading to the taking of control by the Superintendent have been substantially rectified and that the association can resume control of its business and affairs.

Marginal note:Superintendent may request winding-up

447.1 The Superintendent may, at any time before the receipt of a request under section 448 to relinquish control of an association or of the assets of an association and the assets held under the administration of the association, request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the association where

• (a) the assets of the association and the assets held under the administration of the association are under the control of the Superintendent pursuant to subparagraph 442(1)(b)(i) or (ii); or

• (b) the association is under the control of the Superintendent pursuant to subparagraph 442(1)(b)(iii).

Marginal note:Requirement to relinquish control

448 Where no action has been taken by the Superintendent under subsection 447.1 and, after thirty days following the taking of control by the Superintendent under subsection 442(1) of an association or of the assets of an association and the assets held under the administration of the association, the Superintendent receives from the board of directors a notice in writing requesting the Superintendent to relinquish control, the Superintendent must, not later than twelve days after receipt of the notice,

• (a) comply with the request; or

• (b) request the Attorney General of Canada to apply for a winding-up order under section 10.1 of the Winding-up and Restructuring Act in respect of the association.

Marginal note:Advisory committee

449 The Superintendent may, from among the associations that are subject to an assessment under section 23 of the Office of the Superintendent of Financial Institutions Act and required to share in the expenses resulting from the taking of control of an association pursuant to subsection 442(1), appoint a committee of not more than six members to advise the Superintendent in respect of assets, management and all other matters pertinent to the duties and responsibilities of the Superintendent in exercising control of the association.

Marginal note:Expenses payable by associations

• 450 (1) Where the Superintendent has taken control of an association pursuant to subparagraph 442(1)(b)(iii) and the control expires or is relinquished pursuant to section 447 or paragraph 448(a), the Superintendent may direct that the association be liable for repayment of all or part of the expenses resulting from the taking of control of the association and assessed against and paid by other associations pursuant to section 23 of the Office of the Superintendent of Financial Institutions Act, together with such interest in respect thereof at such rate as is specified by the Superintendent.

• Marginal note:Debt due to Her Majesty

  (2) Where any direction is made under subsection (1), the amount for which the association is liable is a debt due to Her Majesty in right of Canada payable on demand and is recoverable in the Federal Court or any other court of competent jurisdiction.

Marginal note:Priority of claim in liquidation

451 In the case of the winding-up of an association, the expenses resulting from the taking of control of the association under subsection 442(1) and assessed against and paid by other associations pursuant to section 23 of the Office of the Superintendent of Financial Institutions Act, and interest in respect thereof at such rate as is specified by the Superintendent, constitute a claim of Her Majesty in right of Canada against the assets of the association that ranks after all other claims but prior to any claim in respect of the membership shares or shares of the association.

Marginal note:Application of assessment

452 Any amount recovered pursuant to section 450 or 451 shall be applied to reduce the total amount of expenses incurred for or in connection with the administration of this Act.

PART XIII.1Regulation of Retail Associations — Commissioner

Marginal note:Required information

452.1 A retail association shall provide the Commissioner with the information at the times and in the form that the Commissioner may require for the purposes of the administration of the Financial Consumer Agency of Canada Act and the consumer provisions.

Marginal note:Confidential information

• 452.2 (1) Subject to subsection (2), information regarding the business or affairs of a retail association or regarding persons dealing with one that is obtained by the Commissioner or by any person acting under the direction of the Commissioner, in the course of the exercise or performance of powers, duties and functions referred to in subsection 5(1) of the Financial Consumer Agency of Canada Act, and any information prepared from that information, is confidential and shall be treated accordingly.

• Marginal note:Disclosure permitted

  (2) If the Commissioner is satisfied that the information will be treated as confidential by the agency, body or person to whom it is disclosed, subsection (1) does not prevent the Commissioner from disclosing it

  • (a) to any government agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

  • (b) to any other agency or body that regulates or supervises financial institutions, for purposes related to that regulation or supervision;

  • (c) to the Canada Deposit Insurance Corporation, for purposes related to its operation; and

  • (d) to the Deputy Minister of Finance or any officer of the Department of Finance authorized in writing by the Deputy Minister of Finance or to the Governor of the Bank of Canada or any officer of the Bank of Canada authorized in writing by the Governor of the Bank of Canada, for the purposes of policy analysis related to the regulation of financial institutions.

Marginal note:Examination

• 452.3 (1) The Commissioner, from time to time, but at least once in each calendar year, shall make or cause to be made any examination and inquiry that the Commissioner considers necessary for the purposes of satisfying the Commissioner that the applicable consumer provisions are being complied with and, after the conclusion of each examination and inquiry, shall report on it to the Minister.

• Marginal note:Access to records of retail association

  (2) The Commissioner or a person acting under the Commissioner’s direction in carrying out his or her duties under subsection (1)

  • (a) has a right of access to any records, including electronic records, of a retail association; and

  • (b) may require the directors or officers of a retail association to provide information and explanations, to the extent that they are reasonably able to do so, in respect of any matter subject to examination or inquiry under subsection (1).