(Consolidated up to
112/2007)
ALBERTA REGULATION 249/89
Credit Union Act
CREDIT UNION (PRINCIPAL)
REGULATION
Table of Contents
Part 1
Interpretation and Application
1 Interpretation
of Regulation
2 Interpretation
provisions applicable to the Act
3 Application
of Securities Act
Part 2
Administration
4 Minimum
periods for retention of documents
5 Provision
of confidential information
6 Fees
Part 3
Commencement of Business
7 Minimum
share subscription for commencing business
8 Minimum
deposit requirement therefor
9 Conditions
for holding of deposits and share subscriptions
Part 4
Organization and Structure
10 Interpretation
11 Change
from no bond to bond
12 Additional
businesses permitted to credit unions
13 Credit
union acting as financial leasing corporation
14 Subsidiary
or affiliate as service corporation
15 Subsidiary
or affiliate as financial leasing corporation
15.1 Additional
businesses permitted to subsidiaries and
affiliates
16 Joint
ventures and partnerships
17 Disposal
of assets in initial fiscal year
18 Trustee
under self‑directed RRSP, RRIF or RESP
19 Additional
permitted related party transactions
20 Exemption
from procedures requirement
Part 5
Directors, Officers, Employees and Committees
21 Qualifications
of directors
22 Functions,
etc. to be performed by board
23 Prescribed
authorization to delegate
24 Non‑delegable
committee functions
Part 6
Financial Disclosure and Audit
25 Members’ equity and financial reporting
25.1 Form
of remuneration disclosure resolution
25.2 Disclosure
of remuneration in annual financial statements
26 Joint
ventures and partnerships
27 Reporting
by auditor on adverse financial changes
28 Meeting
between Minister and auditor
29 Auditor’s right to information from Minister
30 Minister’s access to audit papers
Part 7
Investments
31 Land
acquisition in new credit union’s initial fiscal year
32 Interest
in partnership land
33 Prohibited
investments
37 Investments
in subsidiaries, affiliates, etc.
38 Liquidity
investments
Part 8
Equity and Deposits
Division 1
Equity Generally
39 Statements
on application for shares
40 Statement
on share certificates
41 Intervals
for common share statements
41.1 Disclosure
of information before issue of
common shares
41.2 Quarterly
financial statements
41.3 Capital
adequacy
42 Transfer
of common shares
42.1 Transfer
of common shares in new credit union
43 Redemption
of shares
43.05 Protection
of investment share dividends
Division 1.1
Investment Shares
43.1 Interpretation
and application
43.2 Authorization
to create and issue investment shares
43.3 General
investment share provisions
43.31 Minister’s receipt authorizing issue
43.4 Amendments
affecting investment shares
43.41 Issue
of investment shares
43.5 Financial
restrictions on issue of shares
43.51 Investment
share register
43.6 Transfer
of investment shares
43.61 Acquisition
of credit union’s own investment shares
for redemption, etc.
43.7 Dividends,
patronage rebates and priorities
43.71 Marketing
of investment shares
43.8 Material
changes
43.81 Disclosure,
examination and production of documents
43.9 Rights
of withdrawal
Division 2
Deposits
44 Deposits
from related party financial institutions
45 Repayment
of deposit and share redemption on death
Part 9
Borrowings
47 Meaning
of net borrowings
Part 10
Loans and Guarantees
50 Financial
leasing corporation transactions -
treatment as loans
51 Required
quality as to mortgages
52 Determination
of quality mortgage loan where multiple
security
53 Limits
on loans and guarantees without credit committee review
54 Loan
maximums
54.1 Inter-credit
union loans, etc.
54.2 Loans
to individual non-members
55 Loans
and guarantees to related party financial institutions
56 Loans
to employees
57 Loans,
etc. to related party auditors
Part 11
Credit Union Deposit Guarantee Corporation
58 Authorization
to delegate
59 Composition
of special loans committees
60 Non-acquirable
securities
61 Maximum
periodic assessment
62 Corporation’s common shares
63 Stated
capital accounts
64 Shares
as capital of the Corporation
65 Directors’ remuneration
Part 12
Credit Union Central Alberta Limited
65.01 Definitions
65.1 Credit
unions that are not Central members
66 Additional
composition of Central
67 Central’s purposes re other corporations
68 Delegation
by board
69 Permitted
businesses
70 Central’s joint ventures and partnerships
70.1 Disclosure
of remuneration and benefits
71 Financial
disclosure
73 Investment
powers
74 Acquisition
of lender rights under existing loan agreements
75 Loans
and guarantees to members of credit unions by Central
76 Loans
and guarantees to members of Central by Central
Part 12.1
Amalgamation
77.1 Effect
of having issued investment shares
Part 13
Dissolution and Liquidation and Dissolution
78 Ranking
of special shares
79 Issue
of certificate without discharge of bankruptcy
Part 14
Reviews
79.1 Reviewable
action
80 Review
board proceedings
Part 15
Enforcement
81 Auditor’s working papers
82 Orders
affecting subsidiaries subject to Securities Act
83 Civil
penalties and interest
Part 16
Miscellaneous
84 Valuation
of property
85 Transitional
- financial lease and conditional
sales agreements
86 Transitional
- loan limit exemptions
90 Amendment
of O.C. 446/79
91 Repeals
92 Coming
into force
Schedules
Part 1
Interpretation and Application
Interpretation of
Regulation
1(1) In this Regulation,
(a) “Act”
means the Credit Union Act;
(b) “buyer”,
in relation to a conditional sales agreement, includes a bailee;
(c) “conditional
sales agreement” means an agreement for a sale of personal property where the
right of property or the right of possession in whole or in part remains in the
seller notwithstanding that the actual possession of the personal property
passes to the buyer, and where credit is extended by the seller to the buyer;
(d) “co‑operative”
means an association within the meaning of section 1(b) of the Co‑operative Associations Act or a
co‑operative association incorporated or registered under an Act of
Canada or of a province similar to that Act or to any of the Acts referred to
in that clause;
(e) “farming
operation” means an agricultural activity conducted for gain or reward on land
whose use for agriculture is a permitted or discretionary use under the land
use by‑law of the municipality in which the land is situated or is
permitted under section 74 of the Planning
Act, including
(i) the cultivation of land,
(ii) the raising of livestock or poultry,
(iii) the raising of fur‑bearing animals, pheasants or fish,
(iv) the production of agricultural field crops or the growing of
mushrooms,
(v) the production of fruit, vegetables, sod, trees, shrubs and other
specialty horticultural crops,
(vi) the production of eggs and milk, and
(vii) the production of honey;
(f) “financial
lease agreement” means an agreement for a lease of personal property whereby
credit is extended by the lessor to the lessee for the purpose of enabling the
lessee to meet his financial obligations under the lease;
(g) “financial
leasing corporation” means a corporation whose business activities are limited
to or, if the corporation is a credit union or Central, include entering into
or acquiring and operating conditional sales agreements or financial lease
agreements or both, including, if the corporation is a subsidiary or an
affiliate of a credit union or Central, raising money for the purpose of
financing those activities and holding and investing in short term securities
any money so raised pending the employment of the money in those activities;
(h) “initial
fiscal year” means, in respect of a new credit union, its initial fiscal year
of operation following the date when approval to commence business was granted
to it under section 24 of the Act;
(i) “insurer”
means an insurer within the meaning of the Insurance
Act who is authorized to carry on the business of insurance in Canada under
a statute of Canada or of a province;
(i.01) “investment
grade securities” means debt securities or preferred shares
(i) with ratings at least as high as those listed in the following
table,
(ii) with ratings by other rating organizations, both the rating and
the organization being approved by the Minister, or
(iii) that meet the requirements of subsection
(4):
|
Rating Organization
|
Commercial
Paper
|
Bonds/
Debentures
|
Preferred
Shares
|
|
Standard and Poor’s Corporation
|
A-1
|
A
|
A
|
|
Moody’s Investor Service
|
P-1
|
A
|
A
|
|
Dominion Bond Rating Service
Ltd.
|
R-1
|
A
|
Pfd-2
|
|
Canadian Bond Rating Service
Ltd.
|
A-1
|
A
|
P-2
|
(i.1) “investment
shares” means the class of shares referred to in section 43.2(1);
(j) “land”
includes physical land;
(k) “Ministerial
Regulation” means the Credit Union
(Ministerial) Regulation (Alta. Reg. 250/89);
(l) “mortgage
loan” means a loan that is or is to be secured by a mortgage of land;
(m) “quality
mortgage loan”, subject to section 52, means a mortgage loan where
(i) the amount of the indebtedness, together with the amount of the
indebtedness under other mortgages on the land mortgaged that rank equally with
or in priority to the mortgage loan,
(A) does not exceed 80% of the fair market rate
of the land at the time the mortgage is granted, or
(B) repealed AR 66/99 s2,
(ii) a government guarantee or insurance exists such that the amount
of any loan loss for which the credit union is potentially liable cannot exceed
20% of the fair market rate of the land;
(m.1) “residential
mortgage loans” means mortgage loans by the credit union to individuals to
finance one to 4 unit residential dwellings where at least one of the units is
to be owner‑occupied and the parcel of land on which it is situated does
not exceed 40 acres;
(n) “section
24 approval date” means, in respect of a new credit union in its initial fiscal
year, the date when approval to commence business was granted to it under
section 24 of the Act;
(o) “seller”,
in relation to a conditional sales agreement, includes a bailor;
(p) repealed
AR 111/2004 s2.
(2) The
definitions in section 2(1) and (2) apply to this Regulation.
(2.1) The definition of “assets” in
section 2(9) applies in sections 2(4), 15(1)(b), 17, 26(3), 31, 32, 33, 38(1),
43(1), 44(2), 54, 54.1, 65.01(c) and 73(1)(a) and sections 2(1)(a)(i) and (ii)
and (c)(iv) and 3(a) and (b) and 4 of Schedule 2.
(3) For the purposes of this Regulation,
a corporation is able to continue as a going concern if, in the opinion of the
person making the determination, it will be able to realize its assets and
discharge its liabilities in the normal course of its business for the
foreseeable future.
(4) Where
a debt security or preferred share issued by a corporation does not have a
rating, it is an investment grade security if the lower of
(a) the
corporation’s corporate rating, and
(b) the
rating of that other security issued by that corporation that has terms that
are most closely similar to the terms of the debt security or preferred share
in question,
or either of those ratings if both do not exist, is used as
the rating for that security to determine whether or not the security meets the
requirements of the table set out in subsection (1)(i.01).
AR 249/89
s1;21/95;66/99;111/2004;112/2007
Interpretation
provisions applicable to the Act
2(1) For the purposes of the Act,
(a) “beneficially
owned” includes owned through a trustee, legal representative, agent or other
intermediary;
(a.1) “executive
managers” means, in relation to a credit union,
(i) its chief executive officer or general manager,
(ii) its chief financial officer, and
(iii) vice‑presidents not included in subclause (i) or (ii) who
perform executive and policy functions,
or the persons who occupy
positions similar to those positions or fulfil functions normally performed by
persons occupying those positions.
(b) “guarantee”
includes the issue of a letter of credit;
(b.1) “internal
operations report” means,
(i) where a credit union has an auditor, the management letter
accompanying the audited financial statements, and
(ii) where it does not have an auditor, a report on the credit union’s
internal controls;
(c) repealed
AR 21/95 s3;
(d) “total
capital” means total capital within the meaning of section 2 of Schedule 2.
(2) In
section 2(4)(f), (6) and (7) of the Act, “held” means held as the legal owner
or as the owner according to the share or voting records of the corporation or
trust in question.
(3) For
the purposes of section 2(6)(c) of the Act, a body corporate holds a voting
interest if it is in possession of a proxy entitling it to vote that interest
whichever way it chooses.
(4) With
reference to section 1(1)(dd)(iii) of the Act and for the purposes of the Act
except for section 111(3)(a) thereof, “insolvent” includes a case where the
realizable value of the credit union’s assets is or would be less than the
aggregate of its liabilities and the stated capital of its common and
investment shares.
(5) The
amount prescribed for the purposes of section 1(1)(gg) and (aaa) of the Act is
$2 000 000.
(6) Notwithstanding
section 1(1)(gg) and (aaa) of the Act, for the purposes of the Act, a new
credit union in its initial fiscal year is a large or a small credit union
depending on whether the aggregate of the money that has been paid to the
credit union as share subscriptions under section 24(2)(c)(ii) of the Act and
deposits under section 24(2)(c)(iii) of the Act as at the section 24 approval
date is equal to or in excess of $2 000 000 or is less than
$2 000 000.
(7) For
the purposes of section 1(1)(jj) of the Act, the book value of the shares
issued by a financial institution that is a subsidiary or affiliate of Central
and that are held by Central shall be deducted in determining Central’s
members’ equity.
(8) The
other equity accounts referred to in section 1(1)(jj)(iii) of the Act are
reserves and contributed surplus as accounted for in accordance with section 5
of the Act.
(9) For
the purposes of sections 1(1)(gg), 1(1)(aaa), 89(1), 99(1)(b), 126(1), 183(7)
and 199(2), and the 2nd reference in section 47(2), of the Act and the
provisions of Part 13 of the Act that apply any of those enactments in relation
to Central, “assets”, in relation to a credit union or Central, as the case may
be, means the total book value of its assets, calculated in accordance with the
methods referred to in or pursuant to section 5(1)(a) and, where applicable,
5(2) or (3) of the Act.
(10) The class of employees referred to in section
2(4)(e) of the Act consists of employees who are chief financial officers,
branch managers or chief credit officers of the body corporate, or who perform
functions for the body corporate normally performed by any such person.
AR 249/89
s2;21/95;66/99;111/2004
Application of
Securities Act
3 With reference to section 3(2)
of the Act, the Securities Act does
not apply to common shares issued by Central.
AR 249/89 s3
Part 2
Administration
Minimum periods for
retention of documents
4(1) The period of time for which a body corporate
is required by section 15(1) of the Act to retain a document is
(a) as
long as the body corporate exists, in the case of
(i) minutes of board and of general meetings,
(ii) the general ledger or other book of final entry containing
summaries of year‑to‑year transactions, and
(iii) special agreements necessary to an understanding of the entries
in the general ledger or other book of final entry referred to in subclause
(ii),
and
(b) in
the case of
(i) all other records and books of account and of accounts and
vouchers necessary to verify the information contained in those records and
books, and
(ii) minutes of committee and executive committee meetings,
the period ending 6 years
after the end of the last fiscal year to which the records and books of account
or minutes relate.
(2) The
period following the dissolution of a credit union or Central for which the
Corporation is required by section 15(4) of the Act to retain a document is
