The Credit Union Act - Nova Scotia Credit Union Deposit Insurance Corporation

Credit Union Act

The Credit Union Act is the legislation that empowers CUDIC to protect your deposits and ensure credit union stability. Access the complete Act below, or learn how this legal framework establishes the foundation for your deposit insurance coverage.

PART XI

NOVA SCOTIA CREDIT UNION DEPOSIT INSURANCE CORPORATION

154 This Part applies to the Nova Scotia Credit Union Deposit Insurance Corporation.

155 (1) The Nova Scotia Credit Union Stabilization Fund is hereby continued as the Nova Scotia Credit Union Deposit Insurance Corporation, subject to the provisions of this Act, and the members of the board and the officers of the Nova Scotia Credit Union Stabilization Fund on the coming into force of this Act continue in office until their successors are appointed or elected.

(2) In addition to the provisions of Section 263,

(a) the Corporation continues to be

(i) the owner of its property, and

(ii) liable for its obligations

(b) an existing cause of action, claim or liability to prosecution involving the Nova Scotia Credit Union Stabilization Fund is unaffected;

(c) a civil, criminal, or administrative action or proceeding pending by or against the Nova Scotia Credit Union Stabilization Fund may be continued to be prosecuted by or against the Corporation; and

(d) a conviction against, or ruling, order or judgement in favour of or against the Nova Scotia Credit Union Stabilization Fund may be enforced by or against the Corporation.

156 The purposes of the Corporation are

(a) to provide, for the benefit of persons having deposits with credit unions in the Province, deposit insurance against loss of part or all of such deposits by making payment to the depositors to the extent and in the manner authorized by this Act and the regulations;

(b) in such circumstances as the Corporation considers appropriate, to assist credit unions by providing financial assistance to credit unions for the purpose of stabilization;

(i) the development, promotion and implementation of sound business and financial policies and procedures by credit unions, and

(ii) establishing and implementing loss prevention programs and other controls; and

(d) to do such other things as may be required or authorized by this Act or the regulations.

157 The Corporation may

(a) determine the amounts of money to be levied and collected from credit unions for the purpose of Section 172;

(b) borrow money on the credit of the Corporation or on bills of exchange or promissory notes drawn, made, accepted or endorsed by or on behalf of the Corporation and pledge as security any or all of the assets of the Corporation;

(i) the prevention of insolvency of credit unions,

(ii) financial assistance that it considers necessary to meet the requirements of its operations,

(iii) other matters as it considers appropriate for the attainment of its purposes;

(d) apply to the Minister for loans or guarantees of loans to assist it in carrying out its purpose;

(e) make or cause to be made such examinations and inquiries in relation to credit unions and such actuarial or similar studies as the Corporation considers appropriate;

f) guarantee loans made by third parties to credit unions and take security for such guarantees;

(g) make investments in relation to the deposit insurance fund or cause such investments to be made;

(h) assume or purchase the liabilities or assets of credit unions on their liquidation or dissolution;

(i) establish terms, conditions, restrictions and limitations in relation to the lending activities of credit unions and the loan policies to be established by credit unions;

(j) in consultation with the Superintendent and the Central, issue directives in relation to sound business and financial policies and procedures to be followed by credit unions including, without limiting the generality of the foregoing, directives in relation to those matters referred to in clause (i);

(k) make available to credit unions any form of financial assistance for the purpose of stabilization that it considers appropriate on such terms and conditions as it considers appropriate;

(l) assume the costs of the supervision and winding up of credit unions in accordance with Part XIV;

(m) enter into an agreement with the Central whereby the Central is authorized to carry out such duties and activities on behalf of the Corporation as may be specified in the agreement;

(n) engage any employees, enter into any agreements or arrangements and incur any costs and expenses that are required to carry out the purposes of the Corporation;

(o) arrange compulsory insurance programs for credit unions or insurance coverage on behalf of those credit unions;

(p) require credit unions to make reports and specify the contents, frequency and form of such reports;

(q) do such other things as may be necessary or incidental to the attainment of its purposes.

158 (1) The affairs of the Corporation shall be administered by a board of seven members who shall be appointed by the Governor in Council.

(2) The Central may make recommendations respecting the appointment of board members pursuant to subsection (1).

(3) Where the Central makes recommendations pursuant to subsection (2), the Governor in Council shall appoint a minimum of three members of the board from those persons recommended by the Central.

159 The board shall elect a chair and such other officers as it deems appropriate.

160 (1) Any person who is nineteen years of age except

(a) an undischarged bankrupt;

(b) an employee, director or officer of a credit union or the Central;(ba) a director or officer of a credit union or the Central;

(d) an auditor of

(i) the Corporation,

(ii) the Central; or

(e) a solicitor of the Corporation,

may be a board member of the Corporation,

(2) A non-individual shall not be a board member of the Corporation.

(3) If a person referred to in clause (1)(b), (c), (d) or (e) accepts an appointment to the board of the Corporation, that person shall resign from the office or position referred to in clause (b), (c), (d) or (e).

161 Unless the Governor in Council otherwise orders, members of the board hold office for a term of three years commencing from and including the day on which they are appointed and thereafter until their successors are appointed.

162 Where a vacancy occurs for any reason in the board of the Corporation, the Governor in Council shall fill the vacancy.

163 A member of the board of the Corporation ceases to hold office upon

(a) death or resignation;

(b) becoming disqualified from holding the office pursuant to Section 160; or

164 The board shall

(a) exercise the powers of the Corporation directly, or indirectly through the employees and agents of the Corporation; and

(b) direct the management of the business and affairs of the Corporation.

165 (1) A majority of the members of the board constitutes a quorum.

(2) The Central may designate an individual to attend the meetings of the board but that individual is not to be counted when determining whether a quorum exists and that individual does not have a vote.

166 (1)The board, in order to regulate the business and affairs of the Corporation, may enact by-laws not contrary to law and amend or repeal any of them, but no by-law and no amendment or repeal thereof is in force, or may be acted upon, unless the approval of the Superintendent is obtained and a certified copy is filed with the Superintendent.

(2) The Corporation may make by-laws

(a) respecting the administration, management and control of the property and affairs of the Corporation;

(b) respecting the functions, duties and remuneration of the officers, agents and employees of the Corporation, if any;

(d) respecting the appointment of an auditor;

(e) determining the seal of the Corporation;

(f) respecting the time and place for the holding of meetings of the directors and the procedure at such meetings;

(g) respecting the manner in which a credit union may represent that it is a contributor to the deposit insurance fund;

(h) authorizing and controlling the use by credit unions and the Central of marks, signs, advertisements or other devices indicating that deposits with credit unions are insured by the Corporation;

(i) defining the word “deposit” for the purpose of deposit insurance;

(j) and respecting the conduct in all other particulars of the affairs of the Corporation.

167 Within six months after the board of directors is appointed or elected in accordance with this Act, the Corporation shall file by-laws in accordance with Section 166 with the Superintendent.

168 (1) Subject to the by-laws of the Corporation, the Corporation shall insure deposits placed with a credit union to an amount determined in accordance with the regulations.

(2) Where the Corporation is obliged to make payment in accordance with clause 171(a) in relation to any deposit insured by it, the Corporation as soon as possible after the obligation arises shall, in relation to such deposit, make payment, or cause such payment to be made to such person as appears entitled to it by the records of the credit union with whom the deposit was made by paying, or causing to be paid, to such person an amount in money equal to so much of the person’s outstanding claim against the credit union as is insured by the Corporation.

(3) Payment pursuant to this Section by or on behalf of the Corporation in relation to any deposit insured by deposit insurance discharges the Corporation from all liability in relation to that deposit.

(4) Where the Corporation makes a payment, or causes a payment to be made, pursuant to this Section in relation to any deposit with a credit union, the Corporation is surrogated to the extent of the payment made to all the rights and interests of the depositor as against that credit union.

169 The Superintendent is deemed to have an interest in the deposit insurance fund as representative of all persons who may be claimants against credit unions, and the directors of the Corporation shall furnish the Superintendent with such financial statements and other information in relation to the fund and the Corporation as the Superintendent may require.

170 (1) A credit union shall not advertise or hold out by any written or oral representation that its deposits are insured by the Corporation otherwise than by such marks, signs, advertisements or other devices as are authorized by the by-laws of the Corporation and used in the manner and on the occasions specified by the by-laws.

2) A credit union that violates subsection (1) is guilty of an offence.

171 The Corporation shall establish and maintain a deposit insurance fund which may be used for the following purposes:

(a) to pay out claims of depositors in accordance with Section 168 on the liquidation of a credit union;

(b) to provide financial assistance to credit unions for the purpose of stabilization; and

(c) to pay any costs or expenses incurred in doing such other things as may be necessary for or incidental to the attainment of the purposes of the Corporation.

172 The Corporation shall determine the amount of money to be levied and collected from credit unions from time to time to enable the Corporation to provide its services and to carry out its purposes in accordance with this Act and the regulations.

173 (1) The Corporation shall levy and collect from credit unions such amounts as may be determined by the Corporation, in such manner and at such times as the Corporation may direct.

(2) A credit union shall pay to the Corporation such amounts as may be levied pursuant to subsection (1) at such times as may be required by the Corporation.

174 (1) On the application of the Corporation, the Minister may, with the approval of the Governor in Council and subject to such terms and conditions as the Minister considers appropriate,

(a) make loans or advances to the Corporation; and

(b) guarantee any loans or advances made to the Corporation by others.

(2) The amount of any loan or advance made to the Corporation pursuant to clause (1)(a) shall be pain out of the Consolidated Fund of the Province.

175 The board shall keep proper records of the affairs of the Corporation and shall keep such accounts of its finances as the Superintendent may require.

176 The fiscal year of the Corporation ends on December 31st in each year.

177 The Corporation shall be audited at least annually by an auditor approved by the Superintendent.

178 Sections 92 to 102, 105 to 107, 109, 110, 112, 113, 115 and 118 to 123 apply, with the necessary changes, to the Corporation.

179 Each credit union shall pay to the Corporation the amounts levied by the Corporation.

180 (1) At the end of each fiscal year the board of the Corporation shall report on the administration of the Corporation to the Superintendent and to the credit unions. (2) The board of the Corporation shall report to the Superintendent on the administration of the Corporation at such other times as the Superintendent may require.