Government of Canada / Gouvernement du Canada
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Bank Act

Version of section 551 from 2003-01-01 to 2007-04-19:

Marginal note:Restriction on residential mortgages

  •  (1) An authorized foreign bank shall not make a loan in Canada on the security of residential property in Canada for the purpose of purchasing, renovating or improving that property, or refinance a loan for that purpose, if the amount of the loan, together with the amount outstanding of any mortgage having an equal or prior claim against the property, would exceed 75 per cent of the value of the property at the time of the loan.

  • Marginal note:Exception

    (2) Subsection (1) does not apply in respect of

    • (a) a loan made or guaranteed under the National Housing Act or any other Act of Parliament by or under which a different limit on the value of property on the security of which the authorized foreign bank may make a loan is established;

    • (b) a loan if repayment of the amount of the loan that exceeds the maximum amount set out in subsection (1) is guaranteed or insured by a government agency or a private insurer approved by the Superintendent;

    • (c) the acquisition by the authorized foreign bank from an entity of securities issued or guaranteed by the entity that are secured on any residential property, whether in favour of a trustee or otherwise, or the making of a loan by the authorized foreign bank to the entity against the issue of those securities; or

    • (d) a loan secured by a mortgage where

      • (i) the mortgage is taken back by the authorized foreign bank on a property disposed of by it, including where the disposition is by way of a realization of a security interest, and

      • (ii) the mortgage secures payment of an amount payable to the authorized foreign bank for the property.

  • 1991, c. 46, s. 551
  • 1999, c. 28, s. 35

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