Bank Act (S.C. 1991, c. 46)

Marginal note:Transfer of membership shares

47.17 No transfer of membership shares in a federal credit union is valid unless the transfer is approved by resolution of the directors.

Marginal note:Obligation to have at least five members

• 47.18 (1) A federal credit union must ensure that at all times it has at least five members.

• Marginal note:Membership too low

  (2) If the membership of a federal credit union is reduced to fewer than five members, the federal credit union must, without delay, take the steps that are necessary to

  • (a) make an application referred to in subsection 39.2(1) or section 216.08; or

  • (b) liquidate and dissolve the federal credit union under Part VI.

Marginal note:Exemption

47.19 The Minister may, subject to any terms and conditions that the Minister considers appropriate, exempt any entity or federal credit union from the application of sections 47.11, 47.12 and 47.18.

Commencement and Carrying on of Business

Marginal note:Order to commence and carry on business

• 48 (1) A bank shall not carry on any business until the Superintendent has, by order, approved the commencement and carrying on of business by the bank.

• Marginal note:Deeming

  (2) If, on the day this subsection comes into force, an order approving the commencement and carrying on of business by a bank named in Schedule I or II as those Schedules read immediately before that day, has not been made, such an order is deemed to have been made in respect of the bank on that day.

• Marginal note:Continued bank

  (3) Except in respect of a body corporate that is continued as a bank under this Act for the purposes of forthwith amalgamating with one or more bodies corporate and continuing as a bank under this Act, where letters patent continuing a body corporate as a bank under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the bank.

• Marginal note:Amalgamated bank

  (4) Where letters patent amalgamating and continuing two or more bodies corporate as a bank under this Act are issued, the Superintendent shall make an order approving the commencement and carrying on of business by the bank.

• Marginal note:Subsection 49(2) and section 52 do not apply

  (5) For greater certainty, subsection 49(2) and section 52 do not apply in respect of a bank referred to in subsections (3) and (4).

Marginal note:Authority to make order

• 49 (1) On application by a bank, the Superintendent may make an order approving the commencement and carrying on of business by the bank.

• Marginal note:Statement of payments

  (2) An application by a bank for an order under subsection (1) must contain a statement setting out the amounts paid or to be paid by the bank in connection with its incorporation and organization.

Marginal note:No payments before order

50 Until an order approving the commencement and carrying on of business is made for a bank, the bank must not make any payment on account of incorporation or organization expenses out of moneys received from the issue of the shares or the membership shares of the bank and interest on those moneys, except reasonable sums

• (a) for the remuneration of not more than two officers;

• (b) for the payment of costs related to the issue of shares, or membership shares, of the bank; and

• (c) for the payment of clerical assistance, legal services, accounting services, office accommodation at one location, office expenses, advertising, stationery, postage and travel expenses.

Marginal note:Deposits and investments before order

51 Where a bank comes into existence but no order approving the commencement and carrying on of business is made for the bank, the bank may only

• (a) deposit, in Canada, paid-in capital of the bank in another deposit-taking Canadian financial institution; or

• (b) invest paid-in capital of the bank in unencumbered securities of the Government of Canada or the government of any province.

Marginal note:Conditions for order

• 52 (1) The Superintendent shall not make an order approving the commencement and carrying on of business by a bank until it has been shown to the satisfaction of the Superintendent that

  • (a) the meeting of shareholders of the bank referred to in subsection 46(1), or, in the case of a federal credit union, the meeting of members referred to in subsection 47.02(1), has been duly held;

  • (b) the bank has paid-in capital of at least five million dollars or any greater amount that is specified by the Minister under subsection 46(1) or 47.02(1);

  • (c) the expenses of incorporation and organization to be borne by the bank are reasonable; and

  • (d) all other relevant requirements of this Act have been complied with.

• Marginal note:Time limit

  (2) The Superintendent shall not make an order approving the commencement and carrying on of business by a bank more than one year after the day on which the bank comes into existence.

Marginal note:Conditions of order

• 53 (1) An order approving the commencement and carrying on of business by a bank may contain such conditions or limitations that are consistent with this Act and relate to the business of the bank as the Superintendent deems expedient and necessary.

• Marginal note:Deemed condition

  (2) An order approving the commencement and carrying on of business by a federal credit union is deemed to contain a condition that the federal credit union must, on an ongoing basis, be organized and carry on business on a cooperative basis in accordance with section 12.1.

Marginal note:Variations

• 54 (1) In respect of the order approving the commencement and carrying on of business by a bank, the Superintendent may at any time, by further order,

  • (a) make the order subject to such conditions or limitations that are consistent with this Act and that relate to the business of the bank as the Superintendent deems expedient and necessary, or

  • (b) amend or revoke any authorization contained in the order or any condition or limitation to which the order is subject, other than the condition deemed to be in the order by subsection 53(2),

  but before making any such further order the Superintendent shall provide the bank with an opportunity to make representations regarding that further order.

• (2) to (6) [Repealed, 1996, c. 6, s. 4]

Marginal note:Limit on assets

• 54.1 (1) The Minister may, by order, require a bank not to have average total assets in any three month period ending on the last day of a month subsequent to the month specified in the order exceeding the bank’s average total assets in the three month period ending on the last day of the month immediately before the month specified in the order if the Minister is of the opinion that it is in the best interests of the financial system in Canada to do so, after having considered the Superintendent’s opinion on

  • (a) the nature and extent of the financial services activities carried out by entities affiliated with the bank; and

  • (b) the impact that the nature and degree of supervision and regulation of those financial services activities have on the supervision and regulation of the bank.

• Marginal note:Revocation of order

  (2) If the Minister is of the opinion that the circumstances giving rise to the order have ceased to exist or have changed substantially, the Minister may, by further order, revoke the order.

• Marginal note:Average total assets

  (3) For the purposes of subsection (1), the average total assets of a bank in a three month period shall be computed by adding the total assets of the bank as calculated for the month end of each of the three months in the period and by dividing the sum by three.

• Definition of total assets

  (4) For the purposes of subsections (1) and (3), total assets, in respect of a bank, has the meaning given that expression by the regulations.