PART XIIIRegulation of Banks — Superintendent (continued)
Remedial Powers (continued)
Disqualification and Removal of Directors or Senior Officers (continued)
Marginal note:Removal of directors or senior officers
647.1 (1) The Superintendent may, by order, remove a person from office as a director or senior officer of a bank if the Superintendent is of the opinion that the person is not suitable to hold that office
(a) on the basis of the competence, business record, experience, conduct or character of the person; or
(b) because the person has contravened or, by action or negligence, has contributed to the contravention of
(i) this Act or the regulations made under it,
(ii) a direction made under section 645,
(iii) an order made under subsection 485(3),
(iv) a condition or limitation in respect of the order approving the commencement and carrying on of the bank’s business, or
(v) a prudential agreement entered into under section 644.1 or an undertaking given by the bank to the Superintendent.
Marginal note:Risk of prejudice
(2) In forming an opinion under subsection (1), the Superintendent must consider whether the interests of the depositors and creditors of the bank have been or are likely to be prejudiced by the person’s holding office as a director or senior officer.
Marginal note:Representations may be made
(3) The Superintendent must in writing notify the person concerned and the bank of any removal order that the Superintendent proposes to make under subsection (1) and must afford them an opportunity within 15 days after the date of the notice, or within any longer period that the Superintendent allows, to make representations to the Superintendent in relation to the matter.
(4) If the Superintendent is of the opinion that the public interest may be prejudiced by the director or senior officer continuing to exercise the powers or carry out the duties and functions of that office during the period for making representations, the Superintendent may make an order suspending the director or senior officer. The suspension may not extend beyond 10 days after the expiration of that period.
Marginal note:Notice of order
(5) The Superintendent shall, without delay, notify the director or senior officer, as the case may be, and the bank of a removal order or suspension order.
Marginal note:Consequences of removal order
(6) The director or senior officer, as the case may be, ceases to hold that office as of the date the removal order is made or any later date specified in the order.
(7) The director or senior officer, as the case may be, or the bank may, within 30 days after the date of receipt of notice of the removal order under subsection (5), or within any longer period that the Court allows, appeal the matter to the Federal Court.
Marginal note:Powers of Federal Court
(8) The Federal Court, in the case of an appeal, may dismiss the appeal or set aside the removal order.
Marginal note:Order not stayed by appeal
(9) A removal order is not stayed by an appeal.
- 2001, c. 9, s. 181
Marginal note:Superintendent may take control
(a) take control, for a period not exceeding sixteen days, of the assets of the bank and the assets under its administration; 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,
Marginal note:Circumstances for taking control
(1.1) Control by the Superintendent under subsection (1) may be taken in respect of a bank where
(a) the bank 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. 182]
(c) the assets of the bank are not, in the opinion of the Superintendent, sufficient to give adequate protection to the bank’s depositors and creditors;
(d) any asset appearing on the books or records of the bank or held under its administration is not, in the opinion of the Superintendent, satisfactorily accounted for;
(e) the regulatory capital of the bank has, in the opinion of the Superintendent, reached a level or is eroding in a manner that may detrimentally affect its depositors or creditors;
(f) the bank has failed to comply with an order of the Superintendent under paragraph 485(3)(a);
(g) the bank’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 bank that may be materially prejudicial to the interests of the bank’s depositors or creditors or the owners of any assets under the bank’s administration, including where proceedings under a law relating to bankruptcy or insolvency have been commenced in Canada or elsewhere in respect of the holding body corporate of the bank.
Marginal note:Notice of proposed action
(1.2) The Superintendent must notify a bank 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 ten days after it receives the notice.
Marginal note:Objectives of Superintendent
(2) Where, pursuant to subsection (1), the Superintendent has control of the assets of a bank 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 bank.
Marginal note:Powers of Superintendent
(3) Where, pursuant to subsection (1), the Superintendent has control of the assets of a bank referred to in that subsection,
(a) the bank shall not make, acquire or transfer any loan or make any purchase, sale or exchange of 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 bank shall have access to any cash or securities held by the bank unless
- 1999, c. 28, s. 50
- 2001, c. 9, s. 182
Marginal note:Powers suspended
649 (1) If the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the powers, duties, functions, rights and privileges of the directors of the bank and of the officers of the bank responsible for its management are suspended. If the bank is a federal credit union, the powers of the members to make, amend or repeal by-laws are also suspended.
Marginal note:Superintendent to manage bank
(2) Where the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the Superintendent shall manage the business and affairs of the bank and in doing so the Superintendent
Marginal note:Persons to assist
(3) Where the Superintendent takes control of a bank pursuant to subparagraph 648(1)(b)(iii), the Superintendent may appoint one or more persons to assist in the management of the bank.
- 1999, c. 28, s. 51
- 2010, c. 12, s. 2081
Marginal note:Expiration of control
650 Control by the Superintendent under subsection 648(1) of a bank or of the assets of a bank 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 bank 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 bank can resume control of its business and affairs.
- 1999, c. 28, s. 52
- Date modified: