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Under section 292 of the Credit Unions Act, the Lieutenant-Governor in Council makes the following Regulation:

1This Regulation may be cited as the General Regulation - Credit Unions Act.

2In this Regulation

“Act” means the Credit Unions Act;(Loi)

“commercial loan” means a loan made to an individual, a partnership, co-operative, corporation or any other organized body in respect of the development, production and sale of goods or services, or the sale of goods and services, where the loan is secured by the assets of the business or where repayment of the loan is primarily dependant on the cash flow generated by the business, or both, and includes a loan made in respect of forestry, farming or fishing and a commercial line of credit loan;(prêt commercial)

“residential property” means real property, the primary use of which is residential, consisting of a building that is used, or is to be used, as no more than three private dwellings at least one of which is, or is to be, occupied by an owner of the real property.(bien résidentiel)

2.1A credit union may have or carry on business under a name that is identical to the name of a credit union that has been dissolved for at least ten years.

96-13

2.2For the purposes of paragraph 19(2)(b) of the Act, the following group plans of insurance are prescribed:

(a) Credit Union Creditor Insurance; and

(b) Credit Union Savings Insurance.

96-13; 2016-39

2.3(1)If a deposit account contains less than three hundred dollars and no business has been transacted in connection with the account for at least two years, the credit union, after giving notice to the person in whose name the account stands, by mail sent to the person’s last known address, may, if the notice is not acknowledged within a reasonable time, transfer the money in the account to a special unclaimed balance account established for that purpose by the credit union.

2.3(2)Interest on money transferred from a deposit account to a special unclaimed balance account may be paid at such rates and for such periods as the directors of the credit union may determine.

2.3(3)Money transferred from a deposit account to a special unclaimed balance account shall, on the application of the person in whose name the deposit account stood, be paid to that person.

96-13

2.4For the purposes of section 46 of the Act, a credit union may pay up to five thousand dollars out of the deposit account of a deceased member to a person described in that section.

96-13

2.5For the purposes of section 49 of the Act, the Superintendent may require a credit union to report to the Superintendent the existence of a deposit in excess of five hundred thousand dollars made by a member of the credit union.

96-13

3Loans made by a credit union to its members shall be classified and shown on the records of the credit union as follows:

(a) personal loans, including personal lines of credit loans;

(b) real estate mortgage loans on the security of residential property;

(c) loans to the Government of the Province or a Crown corporation or agency of the Province, or to a local government, school board, regional health authority or a university in the Province, and loans the repayment of which is guaranteed by the Government of Canada or of a province or territory of Canada;

(d) commercial loans;

(e) real estate mortgage loans on the security of property other than residential property; and

(f) loans to corporations or other organized bodies operated on a not for profit basis.

2002-30; 2005-82; 2017, c.20, s.46

4(1)A credit union shall not make loans of a kind referred to in paragraphs 3(d), (e) and (f) unless the stabilization board has authorized the credit union to make loans of that kind.

4(1.1)The stabilization board shall not authorize a credit union to make loans of a kind referred to in subsection (1) unless it is satisfied that the credit union

(a) has the necessary expertise to make such loans,

(b) maintains a level of equity adequate to justify the credit risk incurred in the making of such loans,

(c) has established appropriate criteria for assessing applications for such loans, and

(d) has established adequate procedures for monitoring and managing such loans.

4(2)Where the stabilization board has authorized a credit union to make loans of a kind referred to in paragraphs 3(d), (e) and (f), the total amount of the loans that may be made by the credit union and may be outstanding at any time shall not exceed fifty per cent of the total assets of the credit union.

4(3)Notwithstanding subsection (2), where the stabilization board authorizes a credit union to make loans of a kind referred to in paragraphs 3(d), (e) and (f), the stabilization board may specify that the total amount of the loans that may be made by the credit union and may be outstanding at any time shall be an amount less than that permitted under subsection (2) if, in the opinion of the stabilization board, to permit the credit union to make such loans in the total amount permitted under subsection (2) might prejudice the interests of the members of the credit union.

4(4)For the purposes of subsection (2), a credit union may exclude from the calculation under that subsection any loan that is fully secured by a deposit with that credit union or with a credit union that is a member of Atlantic Central.

96-13; 2002-80; 2005-125; 2016-39

5A credit union shall not make a real estate mortgage loan on the security of property referred to in paragraph 3(b) or (e) for the purpose of purchasing, renovating or improving the property or to refinance a real estate mortgage loan on the property unless

(a) the amount of the indebtedness, together with the amount of the indebtedness under other mortgage loans on the security of the property mortgaged that rank equally with or in priority to the real estate mortgage loan,

(i) in the case of the purchase of the property, does not exceed eighty per cent of the purchase price or the fair market value of the property, whichever is less at the time the real estate mortgage loan is granted,

(ii) in the case of the renovation or the improvement of the property or the refinancing of a real estate mortgage loan, does not exceed eighty per cent of the fair market value of the property at the time the real estate mortgage loan is granted, or

(iii) exceeds eighty per cent of the amount determined under subparagraph (i) or (ii), as the case may be, and the excess is guaranteed or insured by the Government of Canada or of a province or territory of Canada, or is otherwise guaranteed or insured in a manner and to an extent approved by the stabilization board, and

(b) the income from all sources that is available to the borrower is sufficient to repay the principal and interest of the real estate mortgage loan and any fees and taxes related to it.

2008-24

6(1)The loan policies established by a credit union under subsection 48(1) of the Act shall provide for the following:

(a) the maximum amount of the loans that may be made to a member of a credit union and that may be outstanding at any time;

(b) the manner in which loans to directors, officers and employees of the credit union are to be dealt with;

(c) the manner in which loans made by the credit union are to be considered and approved;

(d) the extent to which, and the manner in which, loans made by the credit union are to be secured;

(e) the circumstances, if any, in which unsecured loans may be made to a member of the credit union and the maximum amount of the unsecured loans that may be made to a member and that may be outstanding at any time;

(f) the policy, if any, established by the credit union under subsection (4) in relation to overdrafts; and

(g) any terms, conditions, restrictions or limitations established by the stabilization board in relation to the lending activities of the credit union and such other matters as may be required by the stabilization board.

6(2)The loan policies established by a credit union may provide for any matters, in addition to those required under subsection (1), in relation to the loans that may be made by, and the lending activities of, the credit union, if the loan policies so established are not inconsistent with the Act and this Regulation and any terms, conditions, restrictions or limitations established by the stabilization board.

6(3)The loan policies established by a credit union shall, subject to the Act and this Regulation and any terms, conditions, restrictions or limitations established by the stabilization board, be established in accordance with prudent lending standards.

6(3.1)The loan policies established by a credit union shall be reviewed annually by the directors of the credit union.

6(4)A credit union may permit a member to make an overdraft on a deposit account of the member if

(a) the credit union establishes a policy in relation to overdrafts, specifying the circumstances in which overdrafts may be made by a member of the credit union and the maximum amount of overdrafts that may be made by a member and that may be outstanding at any time,

(b) the policy is approved by the stabilization board and is incorporated into the loan policies established by the credit union, and

(c) the overdraft is made in accordance with that policy.

96-13; 2008-125; 2016-39

6.1A director, officer or employee of a credit union shall disclose his or her interest in loans described in the following paragraphs before the loans are made by the credit union:

(a) a loan to a body corporate in which the director, officer or employee of the credit union or the spouse or a dependent child of the director, officer or employee holds directly or indirectly more than ten per cent of the voting shares of the share capital of the body corporate;

(b) a loan to a body corporate in which a group, composed exclusively of directors, officers or employees of the credit union or the spouses or dependent children of the directors, officers or employees, or any combination of them, holds directly or indirectly more than fifty per cent of the share capital of the body corporate, if the director, officer or employee or his or her spouse or dependent child is a member of that group; and

(c) any other loan to a body corporate in respect of which the director, officer or employee of the credit union can reasonably be considered to have a conflict of interest.

96-13

7(1)A credit union shall maintain liquid assets in an amount not less than ten per cent of its total liabilities as calculated, at the end of each calendar year quarter, in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants.

7(2)A credit union shall maintain eighty per cent of the minimum amount required under subsection (1) or such greater amount as may be specified in the by-laws of Atlantic Central in the liquidity fund established by it for that purpose.

7(3)A credit union shall maintain, in cash on hand or in deposits redeemable on demand, the amount equal to the difference between the amount required to be maintained by the credit union as liquid assets under subsection (1) and the amount required to be maintained in the liquidity fund under subsection (2).

2016-39

8Repealed: 2016-39

2010-163; 2016-39

9(1)For the purposes of section 53 of the Act, a credit union may, subject to subsection (2), make investments authorized by the investment policies established by the credit union for that purpose if the investment policies are approved by the stabilization board and filed with the Superintendent.

9(2)A credit union may make investments only in accordance with prudent investment standards.

9(3)For the purposes of subsection (2), prudent investment standards are those that a reasonable and prudent person would apply in respect of a portfolio of investments so as to avoid undue risk of loss and to obtain a reasonable return on the investments made.

9(4)Notwithstanding subsection (1), a credit union shall not make an investment in real estate for a credit union’s own use if the total cost of that investment, together with the total cost, less any accumulated depreciation, of any investments of that kind already held by the credit union, would exceed fifty per cent of the equity of the credit union, unless that investment is approved by the stabilization board.

96-13; 2016-39

10(1)For the purposes of section 54 of the Act, a credit union shall maintain an allowance for doubtful accounts in an amount determined in accordance with generally accepted accounting principles, the primary source of which is the Handbook of the Canadian Institute of Chartered Accountants.

10(2)The amount of the allowance for doubtful accounts shall be reported in the financial statements of the credit union referred to in subsection 108(1) of the Act.

11A credit union shall maintain a level of equity in an amount not less than 5% of the total assets of the credit union.

96-13; 2005-125; 2008-125

12(1)Repealed: 2008-125

12(2)If at the end of any fiscal year a credit union has not maintained the level of equity required under section 11 for reasons other than an increase in the total assets of the credit union, the stabilization board shall provide financial assistance to the credit union within 4 months after the end of that fiscal year in an amount sufficient to enable the credit union to establish the required level of equity.

12(2.1)Repealed: 2008-125

12(2.2)Repealed: 2008-125

12(2.3)Repealed: 2008-125

12(3)If the stabilization board provides financial assistance to a credit union under subsection (2) it may do so on the terms and conditions that it considers appropriate.

12(4)Subsections (2) does not apply where the stabilization board and the Superintendent agree that the credit union should be liquidated or amalgamated with another credit union under the Act.

12(5)Nothing in this section limits the authority of the stabilization board to provide financial assistance in accordance with paragraph 198(1)(c) of the Act to a member credit union at any time other than the time referred to in subsection (2).

96-13; 2005-125; 2008-125; 2016-39

12.1(1)An application for incorporation made under section 6 of the Act or articles of amalgamation sent to the Superintendent under subsection 136(1) of the Act may be accompanied by a business plan for the proposed credit union or proposed amalgamated credit union.

12.1(2)If the Superintendent issues a certificate of incorporation under subsection 10(1) of the Act or a certificate of amalgamation under subsection 138(1) of the Act, the Superintendent shall, at the same time, approve any business plan considered satisfactory by the Superintendent that accompanied the application for incorporation or articles of amalgamation to which the certificate relates.

12.1(3)Section 11 does not apply to a credit union and subsection 12(2) does not apply to the stabilization board if a business plan approved by the Superintendent under subsection (2) is in effect in respect of the credit union.

12.1(4)For the period during which a business plan is in effect in respect of a credit union, the credit union shall comply with the plan.

2008-125; 2016-39

13(1)The amount that may be borrowed by a credit union under section 56 of the Act shall be an amount not more than ten per cent of the total amount of the deposits of its members and the equity of the credit union, or such greater amount as may be authorized by the stabilization board.

13(2)Notwithstanding subsection (1), the amount of any loan made to the credit union under section 8 shall not be included in the calculation of the amount that may be borrowed by the credit union under subsection (1).

2016-39

13.1(1)The directors of a credit union shall establish an audit committee consisting of a chairperson and at least two other members to be selected in the manner determined by the directors or established in the by-laws of the credit union.

13.1(2)The chairperson of the audit committee shall be selected from among the directors of the credit union.

13.1(3)The members of the audit committee other than the chairperson shall be selected from among the members of the credit union.

13.1(4)Employees of the credit union shall not be members of the audit committee.

96-13

13.2(1)The duties and powers of the audit committee are as follows:

(a) to meet with the auditor of the credit union before the commencement of the audit to review the audit plan and to ensure that the audit committee understands the scope of the audit;

(b) to review the financial statements of the credit union referred to in paragraph 108(1)(a) of the Act and any other information placed before the members of the credit union in accordance with paragraph 108(1)(c) of the Act;

(c) to review the following with the auditor or any person making an inspection or examination under the Act:

(i) a report made under subsection 122(1), 124(1) or 255(1) of the Act in respect of the audit, inspection or examination;

(ii) any restrictions on the scope of the audit, inspection or examination; and

(iii) any problems or conflicts experienced by the auditor or person making the inspection or examination in the performance of the audit, inspection or examination;

(d) to report and to make recommendations to the directors of the credit union in respect of the matters referred to in paragraphs (b) and (c);

(e) to report to the directors of the credit union any significant changes in the accounting policies and practices of the credit union; and

(f) to do such other things as may be required or authorized by the directors of the credit union.

13.2(2)The audit committee shall keep minutes of its proceedings and shall submit to the directors at each meeting of the directors the minutes of the audit committee’s proceedings during the period since the last meeting of the directors.

96-13

13.3Repealed: 2008-125

96-13; 2008-125

13.4Repealed: 2008-125

96-13; 2008-125

14Repealed: 2010-163

96-13; 2004-16; 2009-22; 2010-163

14.1Repealed: 2010-163

96-13; 2010-163

15Repealed: 2016-39

2002-80; 2008-125; 2016-39

15.1(1)In this section, "non-liquid assets" means assets that are not liquid assets.

15.1(2)For the purposes of subsections 202.3 and 202.4 of the Act, the book value of non-liquid assets held in the stabilization fund of the stabilization board are excluded in determining the total amount of the stabilization fund, including, without limitation, the following:

(a) the aggregate book value of all investments in real estate held by the stabilization board in its stabilization fund,

(b) the aggregate book value of all outstanding loans to employees of the stabilization board that were made by the stabilization board from the stabilization fund, and

(c) the aggregate book value of all investments held by the stabilization board in the stabilization fund that were made for the purposes of providing financial assistance to member credit unions.

2008-125; 2016-39

16(1)For the purposes of subsection 220(1) of the Act, the Corporation shall insure each deposit of a member of a credit union to a maximum amount of $250,000.

16(2)Notwithstanding subsection (1), the maximum amount that may be paid by the Corporation in respect of a term deposit of a member of a credit union held by the credit union on the commencement of this subsection is the total amount of the term deposit held by the credit union in the member’s deposit accounts at the time of the obligation to make payment in accordance with paragraph 223(a) of the Act, if

(a) the term deposit was issued, before the commencement of this subsection, for a term of 5 years or less, or

(b) in the case of a renewed term deposit, the most recent renewal of the term deposit occurred before the commencement of this subsection and was for a term of 5 years or less.

2005-124; 2008-125

17Repealed: 2016-39

96-13; 2010-163; 2016-39

18(1)For the purposes of section 200 of the Act, the stabilization board may, subject to section 19, make investments authorized by the investment policies established for that purpose by the stabilization board if the investment policies have been filed with and approved by the Superintendent.

18(1.1)Notwithstanding subsection (1), the stabilization board shall not

(a) make loans to its employees of funds held in its stabilization fund, or

(b) invest in real estate, in Atlantic Central or in a subsidiary company of Atlantic Central funds that are held in its stabilization fund.

18(1.2)Nothing in subsection (1.1) affects any investment of a stabilization board made before the commencement of this subsection, including any terms and conditions of such an investment.

18(1.3)Repealed: 2016-39

18(2)Notwithstanding subsection (1) but subject to subsection (3), the stabilization board shall not make investments in a credit union through debt or equity instruments, deposits or otherwise.

18(3)Nothing in subsection (2) shall be construed to preclude the stabilization board from providing to its member credit unions such financial assistance as may be required or authorized by the Act or this Regulation.

18(4)Before the stabilization board enters into an agreement with a member credit union for the purposes of providing financial assistance to that member credit union, the stabilization board shall obtain the approval of the Superintendent to the agreement.

18(5)Subsection (4) applies with the necessary modifications to any agreement amending an agreement referred to in that subsection.

96-13; 2008-125; 2016-39

19Subsections 9(2) and (3) apply with the necessary modifications to investments of the stabilization board.

2010-163; 2016-39

19.1(1)The amount of the assessment with respect to each credit union for the purposes of subsection 291(2) of the Act shall be determined as follows:

where	A =	B × C
	A =	D

“A” is the amount of the assessment with respect to a credit union;

“B” is the costs and expenses in relation to the administration of the Act and the regulations, including the costs and expenses related to the Tribunal, as determined annually by the Commission for the current fiscal year of the Commission;

“C” is the value of the total assets of the credit union as of the thirty-first day of December of the fiscal year preceding the current fiscal year of the Province; and

“D” is the value of the total assets of all credit unions as of the thirty-first day of December of the fiscal year preceding the current fiscal year of the Province.

19.1(2)For the purposes of subsection (1),

(a) the value of the total assets of a credit union shall be the value reported to the Superintendent by the stabilization board, and

(b) the value of the total assets of all credit unions shall be the total of all values reported to the Superintendent by the stabilization board under paragraph (a).

19.1(3)For the purposes of subsection (1), where, between the thirty-first day of December of the fiscal year preceding the current fiscal year of the Province and the date of the assessment,

(a) two or more credit unions amalgamate and continue as one credit union, the value of the total assets of each of the amalgamating credit unions as of the thirty-first of December of the fiscal year preceding the current fiscal year of the Province shall be attributed to the amalgamated credit union,

(b) a credit union makes a sale, lease or exchange of all or substantially all of its property in accordance with section 139 of the Act to or with another credit union, the value of the total assets of the credit union making the sale, lease or exchange, as of the thirty-first of December of the fiscal year preceding the current fiscal year of the Province, shall be attributed to the credit union to or with whom the sale, lease or exchange was made if the Superintendent determines that the assets of the credit union making the sale, lease or exchange are insufficient, because of the sale, lease or exchange, to pay the amount of the assessment that would otherwise have been made against it, and

(c) a credit union is in the process of liquidation or is dissolved, the value of the total assets of the credit union shall be nil unless the value of its total assets is attributed to another credit union under paragraph (b).

19.1(4)The Commission shall assess the amount determined under subsection (1) against each credit union before the end of each fiscal year of the Commission or as soon after the end of the fiscal year as practicable.

19.1(5)A credit union shall pay the amount determined under subsection (1) within sixty days after the date of the assessment.

19.1(6)An assessment under section 291 of the Act that is not paid in full within ninety days after the date of the assessment shall bear interest, at the rate charged by the Province for the late payment of accounts receivable, calculated in accordance with subsection (7).

19.1(7)For the purposes of subsection (6), interest shall be calculated on the balance that remains unpaid

(a) on the ninetieth day after the date of the assessment, for the preceding thirty days, and

(b) every thirtieth day thereafter.

95-32; 96-13; 2013, c.31, s.15; 2016-39

20Repealed: 2010-163

95-32; 2010-163

21Repealed: 2016-39

95-32; 2016-39

22Repealed: 95-32

95-32

23New Brunswick Regulation 83-24 under the Credit Unions Act is repealed.

24This Regulation comes into force on January 31, 1994.