Trust and Loan Companies Act (S.C. 1991, c. 45)

Marginal note:Restriction on partnerships

• 421 (1) Except with the approval of the Superintendent, a company may not be a general partner in a limited partnership or a partner in a general partnership.

• Marginal note:Meaning of general partnership

  (2) For the purposes of subsection (1), general partnership means any partnership other than a limited partnership.

Fiduciary Activities

Marginal note:Separate and distinct

• 422 (1) A company shall keep money and other assets acquired or held in trust by the company separate and distinct from its own assets and shall keep a separate account for each trust.

• Marginal note:Common trust fund

  (2) Unless the instrument creating a trust otherwise provides, a company may invest money it holds in trust in one or more common trust funds.

Deposit Acceptance

Marginal note:Deposit acceptance

• 423 (1) A company may, without the intervention of any other person,

  • (a) accept a deposit from any person whether or not the person is qualified by law to enter into contracts; and

  • (b) pay all or part of the principal of the deposit and all or part of the interest thereon to or to the order of that person.

• Marginal note:Exception

  (2) Paragraph (1)(b) does not apply if, before payment, the money deposited in the company pursuant to paragraph (1)(a) is claimed by some other person

  • (a) in any action or proceeding to which the company is a party and in respect of which service of a writ or other process originating that action or proceeding has been made on the company, or

  • (b) in any other action or proceeding pursuant to which an injunction or order made by the court requiring the company not to make payment of that money or make payment thereof to some person other than the depositor has been served on the company,

  and, in the case of any such claim so made, the money so deposited may be paid to the depositor with the consent of the claimant or to the claimant with the consent of the depositor.

• Marginal note:Guaranteed trust money

  (3) A company that is a trust company pursuant to subsection 57(2) shall accept deposits only as guaranteed trust money.

• Marginal note:Profit

  (4) Notwithstanding subsection (3), a company that is a trust company pursuant to subsection 57(2) that accepts deposits may retain the interest and profit resulting from the investment thereof in excess of the amount of interest payable to its depositors in respect thereof.

• Marginal note:Assets to be identified

  (5) Where a company that is a trust company pursuant to subsection 57(2) accepts deposits, the company shall identify on its books assets to be held in respect thereof equal to the aggregate amount of the deposits.

• Marginal note:Execution of trust

  (6) A company is not bound to see to the execution of any trust to which any deposit made under the authority of this Act is subject, other than a trust of which the company is a trustee.

• Marginal note:Payment when company has notice of trust

  (7) Subsection (6) applies regardless of whether the trust is express or arises by the operation of law, and it applies even when the company has notice of the trust if it acts on the order of or under the authority of the holder or holders of the account into which the deposit is made.

Unclaimed Balances

Marginal note:Unclaimed balances

• 424 (1) Where

  • (a) a deposit has been made in Canada that is payable in Canada and in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor during a period of 10 years

    • (i) in the case of a deposit made for a fixed period, from the day on which the fixed period terminated, and

    • (ii) in the case of any other deposit, from the day on which the last transaction took place or a statement of account was last requested or acknowledged by the creditor, whichever is later, or

  • (b) a cheque, draft or bill of exchange (including any of those instruments drawn by one branch of a company on another of its branches but not including an instrument issued in payment of a dividend on the capital of a company) payable in Canada has been issued, certified or accepted by a company in Canada and no payment has been made in respect of it for a period of 10 years after the date of issue, certification, acceptance or maturity, whichever is later,

  the company shall pay to the Bank of Canada not later than December 31 in each year an amount equal to the principal amount of the deposit or instrument, plus interest, if any, calculated in accordance with the terms of the deposit or instrument, and payment accordingly discharges the company from all liability in respect of the deposit or instrument.

• Marginal note:Exchange rate

  (1.1) If a deposit referred to in paragraph (1)(a) or an instrument referred to in paragraph (1)(b) is not in Canadian currency, then, before paying to the Bank of Canada the amount required by subsection (1), the company shall convert the amount of the deposit or instrument to Canadian currency at a rate of exchange determined in accordance with rules prescribed under subsection 26.03(2) of the Canada Deposit Insurance Corporation Act.

• Marginal note:Provision of information

  (2) A company shall, on making a payment under subsection (1), provide the Bank of Canada, for each deposit or instrument in respect of which the payment is made, with the following information current as of the day the payment is made, in so far as it is known to the company:

  • (a) in the case of a deposit,

    • (i) the name of the depositor in whose name the deposit is held, as well as their date of birth and Social Insurance Number, if they are a natural person,

    • (ii) the recorded address of the depositor,

    • (iii) the outstanding amount of the deposit, and

    • (iv) the branch of the company at which the last transaction took place in respect of the deposit, and the date of that last transaction; and

  • (b) in the case of an instrument,

    • (i) the name of the person to whom or at whose request the instrument was issued, certified or accepted, as well as their date of birth and Social Insurance Number, if they are a natural person,

    • (ii) the recorded address of that person,

    • (iii) the name of the payee of the instrument,

    • (iv) the amount and date of the instrument,

    • (v) the name of the place where the instrument was payable, and

    • (vi) the branch of the company at which the instrument was issued, certified or accepted.

• Marginal note:Copies of signature cards and signing authorities

  (2.1) A company shall provide the Bank of Canada with copies of signature cards and signing authorities relating to any deposit or instrument in respect of which it has made a payment under subsection (1). If it does not have any with respect to a deposit or instrument to which the request relates, it shall so inform the Bank of Canada.

• Marginal note:Payment to claimant

  (3) Subject to section 22 of the Bank of Canada Act, where payment has been made to the Bank of Canada under subsection (1) in respect of any deposit or instrument, and if payment is demanded or the instrument is presented at the Bank of Canada by the person who, but for that section, would be entitled to receive payment of the deposit or instrument, the Bank of Canada is liable to pay, at its agency in the province in which the deposit or instrument was payable, an amount equal to the amount so paid to it together with interest, if interest was payable under the terms of the deposit or instrument,

  • (a) for a period not exceeding ten years from the day on which the payment was received by the Bank of Canada until the date of payment to the claimant; and

  • (b) at such rate and computed in such manner as the Minister determines.

• Marginal note:Enforcing liability

  (4) The liability of the Bank of Canada under subsection (3) may be enforced by action against the Bank of Canada in the court in the province in which the deposit or instrument was payable.

• Marginal note:Application of subsection (1)

  (5) Subsection (1) applies only in respect of deposits made, and cheques, drafts and bills of exchange issued, certified or accepted after May 31, 1990.

• Marginal note:Application

  (6) This section shall not apply until the day that is eight years after the day on which this section comes into force.

Marginal note:Notice of unpaid amount

• 425 (1) A company shall send, by mail and by electronic means, to each person to whom a deposit referred to in paragraph 424(1)(a) is payable, or to each person to whom or at whose request an instrument referred to in paragraph 424(1)(b) was issued, certified or accepted, at their recorded address and electronic address in so far as they are known to the company, a notice stating that the deposit or instrument remains unpaid.

• Marginal note:When notice to be given

  (2) A notice required by subsection (1) shall be given during the month of January next following the end of the first two year period, and also during the month of January next following the end of the first five year period,

  • (a) in the case of a deposit made for a fixed period, after the fixed period has terminated;

  • (b) in the case of any other deposit, in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor; and

  • (c) in the case of a cheque, draft or bill of exchange, in respect of which the instrument has remained unpaid.

• Marginal note:When notice to be sent

  (3) The notice must be sent during the month of January next following the end of the first two-year period, during the month of January next following the end of the first five-year period and also during the month of January next following the end of the first nine-year period

  • (a) [Repealed before coming into force, 2008, c. 20, s. 3]

  • (b) in the case of any other deposit, in respect of which no transaction has taken place and no statement of account has been requested or acknowledged by the creditor; and

  • (c) [Repealed before coming into force, 2008, c. 20, s. 3]

Accounts

Marginal note:Definitions

425.1 The following definitions apply in this section and in sections 431 to 434, 444.1 and 444.3.

member company

member company means a company that is a member institution as defined in section 2 of the Canada Deposit Insurance Corporation Act. (société membre)

personal deposit account

personal deposit account means a deposit account in the name of one or more natural persons that is kept by that person or those persons for a purpose other than that of carrying on business. (compte de dépôt personnel)

retail deposit account

retail deposit account means a personal deposit account that is opened with a deposit of less than $150,000 or any greater amount that may be prescribed. (compte de dépôt de détail)

Marginal note:Account charges

426 A company shall not, directly or indirectly, charge or receive any sum for the keeping of an account unless the charge is made by express agreement between the company and a customer or by order of a court.

Marginal note:Disclosure on opening account

• 427 (1) A company shall not, after the day that is six months after the coming into force of this Part, open or maintain an interest-bearing deposit account in Canada in the name of any natural person unless the company discloses, in accordance with the regulations, to the person who requests the company to open the account, the rate of interest applicable to the account and how the amount of interest to be paid is to be calculated.

• Marginal note:Exception

  (2) Subsection (1) does not apply in respect of an interest-bearing deposit account that is opened with a deposit in excess of $150,000 or any greater amount that may be prescribed.

Marginal note:Disclosure in advertisements

428 No person shall authorize the publication, issue or appearance of any advertisement in Canada that indicates the rate of interest offered by a company on an interest-bearing deposit or a debt obligation unless the advertisement discloses, in accordance with the regulations, how the amount of interest is to be calculated.

Marginal note:Disclosure regulations

429 The Governor in Council may make regulations respecting

• (a) the time and place at which and the form and manner in which disclosure is to be made by a company of

  • (i) interest rates applicable to debts of the company and deposits with the company, and

  • (ii) the manner in which the amount of interest paid is to be calculated;

• (b) the manner in which any charges for the keeping of an account are to be disclosed by a company to its customers and when the disclosure is to be made; and

• (c) such other matters or things as may be necessary to carry out the requirements of sections 426 to 428.

430 [Repealed, 2001, c. 9, s. 540]

Marginal note:Disclosure required on opening a deposit account

• 431 (1) Subject to subsections (2) to (4), a company shall not open a deposit account in the name of a customer unless, at or before the time the account is opened, the company provides in writing to the individual who requests the opening of the account

  • (a) a copy of the account agreement with the company;

  • (b) information about all charges applicable to the account;

  • (c) information about how the customer will be notified of any increase in those charges and of any new charges applicable to the account;

  • (d) information about the company’s procedures relating to complaints about the application of any charge applicable to the account; and

  • (e) such other information as may be prescribed.

• Marginal note:Exception

  (2) If a deposit account is not a personal deposit account and the amount of a charge applicable to the account cannot be established at or before the time the account is opened, the company shall, as soon as is practicable after the amount is established, provide the customer in whose name the account is kept with a notice in writing of the amount of the charge.

• Marginal note:Exception

  (3) If a company has a deposit account in the name of a customer and the customer by telephone requests the opening of another deposit account in the name of the customer and the company has not complied with subsection (1) in respect of the opening of that other account, the company shall not open the account unless it provides the customer orally with any information prescribed at or before the time the account is opened.

• Marginal note:Disclosure in writing

  (4) If a company opens an account under subsection (3), it shall, not later than seven business days after the account is opened, provide to the customer in writing the agreement and information referred to in subsection (1).

• Marginal note:Right to close account

  (5) A customer may, within 14 business days after a deposit account is opened under subsection (3), close the account without charge and in such case is entitled to a refund of any charges related to the operation of the account, other than interest charges, incurred while the account was open.

• Marginal note:Regulations

  (6) For the purposes of subsection (4), the Governor in Council may make regulations prescribing circumstances in which, and the time when, the agreement and information will be deemed to have been provided to the customer.