C-4 - Savings and Credit Unions Act

Full text
chapter C-4
Savings and Credit Unions Act
SAVINGS AND CREDIT UNIONSNovember 30 2011
Chapter C-4 is replaced by the Savings and Credit Unions Act (chapter C-4.1). (1988, c. 64, s. 592).
1988, c. 64, s. 592.
DIVISION I
DEFINITIONS — APPLICATION
1. In this Act, the following expressions mean:
(a)  savings and credit union or union : a savings and credit union governed by this Act;
(b)  founder : a person who has signed the founding memorandum of a union or was admitted as a member at the organization meeting;
(c)  federation : a federation governed by this Act and composed of unions or federations of unions;
(d)  affiliated union : a union which is a member of a federation, either directly or as a member of a federation which is a member thereof;
(e)  general reserve : the reserve contemplated in section 87;
(f)  (paragraph repealed);
(g)  executive officer : a member of the board of directors, of the board of supervision, or of the committee on credit, and the manager.
R. S. 1964, c. 293, s. 1; 1970, c. 59, s. 1; 1975, c. 76, s. 11; 1978, c. 85, s. 1; 1981, c. 9, s. 24; 1982, c. 52, s. 86.
2. The Inspector General of Financial Institutions is responsible for carrying out the administration of this Act.
R. S. 1964, c. 293, s. 2; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 87.
DIVISION II
FORMATION OF UNIONS
3. The Minister, upon the filing of the founding memorandum provided for in section 5 and after having obtained the opinion of the Inspector General, may authorize the formation of a savings and credit union for the following purposes:
(a)  to receive, and employ to yield a return, the savings of its members;
(b)  to make loans to them.
The Minister shall grant the authorization contemplated in the preceding paragraph only if a federation has accepted the affiliation with it of the union.
R. S. 1964, c. 293, s. 3; 1970, c. 59, s. 2; 1982, c. 52, s. 88.
4. Such unions shall be cooperatives which shall operate in accordance with the following rules:
(a)  the number of members shall not be limited;
(b)  a member shall have one vote only, whatever the number of shares that he holds, and he cannot vote by proxy;
(c)  interest on shares shall be limited;
(d)  the annual operating surplus is divided in conformity with Division XVII.
R. S. 1964, c. 293, s. 4; 1970, c. 59, s. 3; 1978, c. 85, s. 2.
5. Persons wishing to form a savings and credit union shall sign in five copies before a witness, a founding memorandum in accordance with form 1.
R. S. 1964, c. 293, s. 5.
6. The founding memorandum shall be signed by at least twelve persons capable of contracting and must state
(a)  the name of the proposed union;
(b)  its head office;
(c)  the territory or group in which the union may recruit members;
(d)  the names, occupations and residence of the signatories and the number of shares subscribed for by each;
(e)  the name, occupation and residence of the person appointed to act as provisional secretary of the union for the filing of the copies of the memorandum with the Minister and the calling of the organization meeting;
(f)  the manner of calling such meeting;
(g)  the name of the federation with which the union will be affiliated.
The memorandum shall be accompanied by a true copy of the resolution passed by the federation with which the proposed union is to be affiliated with a view to accepting such affiliation.
R. S. 1964, c. 293, s. 6; 1970, c. 59, s. 4.
7. The territory described in the founding memorandum shall not, without the authorization of the Minister, exceed the limits of one electoral district or of the territory of one local municipality.
R. S. 1964, c. 293, s. 7; 1996, c. 2, s. 103.
8. The five copies of the memorandum shall be sent to the Minister. If he approves the formation of the union, he shall so indicate by affixing his signature to each copy.
Notice of such approval shall be published in the Gazette officielle du Québec at the expense of the union.
After such notice is published, one of the copies of the memorandum shall be filed with the Inspector General and the other four shall be returned to the provisional secretary of the union; he shall deliver one copy thereof to the clerk of the district where the head office of the union is situated; he shall preserve one copy in the records of the union and deliver the other two to the federation with which the union is affiliated.
From the publication of such notice in the Gazette officielle du Québec, the founders shall be a savings and credit union which is a corporation within the meaning of the Civil Code of Lower Canada.
Publication of the notice is conclusive proof of the formation and existence of the union and of the name by which it is to be known.
R. S. 1964, c. 293, s. 8; 1966-67, c. 72, s. 23; 1970, c. 59, s. 5; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 89.
9. Every union shall, within sixty days of its formation, furnish the Minister with proof of its affiliation with the federation which has accepted the affiliation with it of such union.
1970, c. 59, s. 6.
DIVISION III
NAME
10. The name of a union must not be susceptible of confusion with that of another union, association, society or corporation and must in no case contain the word “association”, “society” or “cooperative”.
A union shall only be constituted under a French name or a name comprising a French version.
Such name must include, in all cases, one of the following expressions the use of which is restricted exclusively to a savings and credit union governed by this Act: “caisse populaire”, “caisse Desjardins”, “caisse populaire Desjardins”, “caisse d’économie” or in English “credit union”, “caisse d’épargne” or in English “savings union”, “caisse de crédit”, “caisse d’établissement”, “caisse d’entraide économique”.
R. S. 1964, c. 293, s. 9; 1970, c. 59, s. 7.
11. No union shall in the course of its operations use any name other than that given to it in the founding memorandum unless it has changed its name by by-law in accordance with section 39, and in such case it shall use its new name only.
If the union has a French name and an English name or a name comprising a French version and an English version, it may be legally designated by its French name or the French version of such name or by both names or both versions.
1970, c. 59, s. 8.
12. No union shall be constituted under a name that includes the expression “caisse populaire”, “caisse Desjardins” or “caisse populaire Desjardins” unless the Confédération des caisses populaires et d’économie Desjardins du Québec or the Fédération de Montréal des Caisses Desjardins has accepted the affiliation with it of such union.
No union shall be constituted under a name that includes the expression “caisse d’économie” or “credit union” unless the Québec Credit Union League or the Fédération des Caisses d’Économie du Québec has accepted the affiliation with it of such union.
No union shall be constituted under a name that includes the expression “caisse d’établissement” unless the Fédération des caisses d’établissement du Québec has accepted the affiliation with it of such union.
No union shall be constituted under a name that includes the expression “caisse d’entraide économique” unless the Fédération des caisses d’entraide économique du Québec has accepted the affiliation with it of such union.
R. S. 1964, c. 293, s. 10; 1970, c. 59, s. 9; 1978, c. 85, s. 3; 1979, c. 90, s. 3.
12.1. No union having changed its affiliation, whose name at the time of that change included one of the expressions mentioned in section 12, may carry on its operations under a name including that expression for a period exceeding sixty days from the coming into force of the change of affiliation, except a union contemplated in the first paragraph of section 12 that has affiliated with a federation contemplated in that paragraph, or a union contemplated in the second paragraph of section 12 that has affiliated with a federation contemplated in that paragraph.
1978, c. 85, s. 4.
13. Notice of every change of name shall be published, at the expense of the union, in the Gazette officielle du Québec.
R. S. 1964, c. 293, s. 13.
14. No change of name shall adversely affect the rights and obligations of a union, and proceedings instituted by or against it may be continued without proceedings in continuance of suit.
R. S. 1964, c. 293, s. 14.
DIVISION IV
POWERS OF UNIONS
15. A union shall possess the rights and powers of a corporation within the meaning of the Civil Code of Lower Canada and may, in particular:
(a)  receive, and employ to yield a profit the savings of its members, make loans to them and establish the facilities necessary for such purposes;
(b)  acquire and hold immovables and sell, lease or otherwise dispose of the same;
(c)  borrow, hypothecate its immovables and engage its movables as security;
(d)  invest its available funds in loans to the federation of which it is a member or in accordance with section 83;
(e)  with the authorization of the federation with which it is affiliated, establish a system of retirement with pension or contribute to the establishment thereof for the benefit of its employees and their dependants, subject however to the Supplemental Pension Plans Act (chapter R-15.1);
(f)  create relief funds and social security services for the persons mentioned in paragraph e or contribute thereto or pay insurance premiums or contributions for such persons or for its members;
(g)  subscribe or guarantee funds for cooperative promotional and educational purposes or for charitable, benevolent, educational or artistic purposes;
(h)  issue, endorse, accept and discount promissory notes, bills of exchange, drafts and other negotiable instruments;
(i)  retain, for the payment of any claim it has against a member, any moneys which it may owe him, and apply the same in compensation;
(j)  subscribe for common shares of a cooperative association or electricity cooperative in order to become a member thereof and benefit by services of which it has need;
(k)  take out for the benefit of the members of its board of directors, of its board of supervision and of its committee on credit a group life insurance contract for an amount not to exceed, in principal, the sum of $5,000 for each person, and pay the insurance premiums payable under such a contract.
R. S. 1964, c. 293, s. 16; 1970, c. 59, s. 12; 1978, c. 85, s. 5; 1989, c. 38, s. 319.
DIVISION V
ORGANIZING MEETING
16. The first or organization meeting of the union must be held within sixty days of the publication of the notice provided for in section 8.
The founders shall be called to such meeting by the provisional secretary in the manner determined in the founding memorandum.
If the provisional secretary is absent or unable to act, the meeting may be called by two founders.
R. S. 1964, c. 293, s. 17; 1970, c. 59, s. 13.
17. The order of business at the organization meeting shall be as follows:
(a)  election of the chairman and the secretary of the meeting;
(b)  admission of new members;
(c)  reading of the founding memorandum and of the notice of formation published in the Gazette officielle du Québec;
(d)  consideration and adoption of the internal management by-laws;
(e)  election of the members of the board of directors, of the board of supervision and of the committee on credit;
(f)  affiliation with a federation.
R. S. 1964, c. 293, s. 18.
DIVISION VI
MEMBERS
18. The members of a union shall be its founders and any other person capable of contracting who
(a)  signs an application for membership in accordance with form 2;
(b)  subscribes for one or more shares;
(c)  undertakes to comply with the by-laws; and
(d)  is admitted by the board of directors or by any person it authorizes.
R. S. 1964, c. 293, s. 19; 1978, c. 85, s. 6.
19. Corporations and partnerships may also be members of a union.
R. S. 1964, c. 293, s. 20.
20. A union shall not recruit members except in the territory or group described in the founding memorandum.
R. S. 1964, c. 293, s. 21.
21. Each union shall establish by by-law a class of auxiliary members and determine the conditions of their admission and their rights and obligations.
Such members may attend meetings but cannot vote or hold any office.
Minors shall not be admitted except as auxiliary members.
A member who ceases to have his domicile, residence, place of business or usual work in the territory of the union, or who ceases to be a member of his group, shall become an auxiliary member.
R. S. 1964, c. 293, s. 22.
22. Minors may subscribe for shares in any union or deposit their savings therein and, in both cases, may withdraw the benefits and the principal thereof.
1970, c. 59, s. 14.
23. A married woman common as to property may withdraw the benefits and the principal from the shares for which she subscribes in any union and from the savings which she deposits therein.
Pecuniary condemnations obtained against such a woman by reason of her holding an office in a union before 1 July 1970, with the express or implied authorization of her husband, may be recovered out of the property of the community.
R. S. 1964, c. 293, s. 23; 1970, c. 59, s. 15.
24. The by-laws may authorize the admission of patrons as well as honorary members who, as such, shall not participate in the management of the union or in the benefits thereof.
R. S. 1964, c. 293, s. 24.
25. Any member may resign by so notifying the secretary or by applying in writing for the repayment of his shares and savings.
The resignation of the member becomes effective only from the complete reimbursement of his shares and savings.
R. S. 1964, c. 293, s. 25; 1981, c. 31, s. 205.
26. The board of directors, after informing a member in writing of the reasons advanced for his suspension or expulsion and affording him an opportunity to be heard, may suspend or expel him for any of the following reasons:
(a)  if he has not discharged his obligations towards the union or has failed to comply with its by-laws;
(b)  if he has twice or oftener presented or issued an order for payment without sufficient funds;
(c)  if he allows a savings account to remain overdrawn despite a notice from the union;
(d)  if he has been convicted of an indictable offence, made an abandonment of property, offered a composition, been declared bankrupt or been interdicted.
The minutes of the meeting of the board of directors at which a member is suspended or expelled shall set forth the facts that gave rise to such decision. Notice of such suspension or dismissal shall be sent to such member, by registered or certified letter, within six days after the decision.
R. S. 1964, c. 293, s. 26; 1975, c. 83, s. 84.
27. A member suspended or expelled shall forfeit the right to receive notice of meetings of the union, to attend and to vote thereat and also the right to hold any office.
The loss of such rights shall take effect from the passing of the resolution of the board of directors.
R. S. 1964, c. 293, s. 27.
DIVISION VII
CAPITAL STOCK
28. The capital stock of a union shall consist of the shares subscribed for by the members.
The amount of a share shall be $5.
The by-laws may require every person admitted as a member to pay an initiation fee.
The amount of such fee shall be paid into the general reserve.
R. S. 1964, c. 293, s. 28; 1970, c. 59, s. 16.
29. The capital stock of a union may vary owing to the increase or decrease of the number of shares held by members or to a change in the number of members.
R. S. 1964, c. 293, s. 29.
30. The shares shall be registered and may be transferred only in accordance with the by-laws of the union.
R. S. 1964, c. 293, s. 30.
31. The amounts paid on their shares by members who resign or are expelled shall be paid to them as funds are received and are not absorbed by the debts due by the union.
Save in the case of winding-up, payments shall be made in the chronological order of withdrawal.
R. S. 1964, c. 293, s. 31.
32. In the case of the death, bankruptcy or interdiction of a member, his heirs or representatives shall recover his payments in the manner determined by section 31.
R. S. 1964, c. 293, s. 32.
DIVISION VIII
GENERAL MEETING
33. The members of a union shall constitute the general meeting thereof, when convened at an annual or special meeting.
R. S. 1964, c. 293, s. 33.
34. Notice of convocation shall be given in the manner prescribed by the by-laws.
Failing provision in the by-laws, the notice shall be mailed to the address of each member at least five days before the date fixed.
R. S. 1964, c. 293, s. 34.
35. The general meeting shall be legally constituted by the members present.
R. S. 1964, c. 293, s. 35.
36. At the meetings of a union, a member shall have one vote only, whatever the number of his shares.
Such vote cannot be given by proxy, but a corporation or society may be represented and may vote by a delegate.
R. S. 1964, c. 293, s. 36.
37. A member admitted less than ninety days before a meeting shall not be entitled to vote thereat.
This provision shall not apply to the organization meeting.
R. S. 1964, c. 293, s. 37.
38. The general meeting may amend the internal management by-laws.
R. S. 1964, c. 293, s. 38.
39. The general meeting may also, by by-law:
(a)  change the head office of the union;
(b)  alter, subject to section 7, the territory or group in which it may recruit its members;
(c)  change the name of the union, provided that the name chosen complies with the provisions of sections 10 and 12;
(d)  change the affiliation of the union from one federation to another.
Such by-law shall not come into force until approved by the Minister and published in conformity with section 13. Before giving his approval, the Minister shall obtain the opinion of the Inspector General.
Except in the case contemplated in subparagraph d, the application by a union to the Minister must be previously approved by the federation with which the union is affiliated.
The Minister shall not approve a by-law changing the affiliation of a union from one federation to another unless such union furnishes him with proof that it has met all its obligations towards the federation with which it ceases to be affiliated.
R. S. 1964, c. 293, s. 39; 1970, c. 59, s. 17; 1982, c. 52, s. 90.
40. The amending of the by-laws of internal management and any change contemplated in section 39 must be mentioned in the notice of convocation and passed by the vote of at least three-fourths of the members present at the general meeting.
R. S. 1964, c. 293, s. 40.
41. The decisions of the general meeting, except in the cases provided for in sections 40, 46 and 106, shall be taken by the majority of the votes of the members present and, in the case of a tie, the chairman shall have a second vote.
R. S. 1964, c. 293, s. 41.
42. An annual meeting shall be held within three months after the end of each fiscal year.
R. S. 1964, c. 293, s. 42.
43. The annual meeting shall
(a)  examine the annual report;
(b)  deliberate on the operations of the union;
(c)  determine, within the limits provided by law, the maximum amount that the board of directors may borrow unless a special meeting decides otherwise;
(d)  subject to rights acquired by third parties, approve or disallow the decisions of the board of directors whenever two members have lodged an appeal for that purpose;
(e)  elect the members of the board of directors, the committee on credit and the board of supervision;
(f)  determine the minimum interval between audits of the union’s affairs by the board of supervision;
(g)  pronounce upon any other matter of interest to the union.
The annual meeting may also appoint an auditor to audit the annual report contemplated in section 81. Such auditor shall have the powers which section 90 grants to an inspector.
R. S. 1964, c. 293, s. 43; 1970, c. 59, s. 18.
44. The board of directors of the union, the president or the vice-president of the union or the board of directors of the federation with which it is affiliated may order the holding of a special meeting of the members of the union whenever he or it shall deem it expedient to do so.
Furthermore, the board of directors of the union must order the holding of such a meeting upon request by 100 members if there are 300 or more members or by one-third of the members if there are fewer than 300 members or if two vacancies occur on the board of supervision.
R. S. 1964, c. 293, s. 44; 1970, c. 59, s. 19.
45. In each of the cases contemplated in section 44, the secretary of the union shall convene the members in accordance with section 34.
If the meeting is not called and held within 21 days from the date on which the federation contemplated in the first paragraph of section 44 has caused a copy of the resolution ordering the holding of the meeting to be forwarded to the secretary of the union, such meeting may be called by such federation.
If the meeting is not called and held within 21 days from the date on which the request contemplated in the second paragraph of section 44 is deposited at the head office of the union, the meeting may be called by two signatories of the request.
1970, c. 59, s. 19.
46. At a special meeting, none but the matters mentioned in the notice calling the meeting may be considered and decided upon.
A special meeting called for such purpose may, by the vote of at least two-thirds of the members present, dismiss any director, supervisor or commissioner.
R. S. 1964, c. 293, s. 45.
DIVISION IX
BOARD OF DIRECTORS
47. The board of directors of a union shall be composed of at least five directors chosen from among its members at the annual meeting.
The by-laws, however, may provide for a greater number of directors but not more than fifteen.
Except the manager, no employee of the union may be a member of the board of directors.
The directors shall remain in office until their successors are elected by the general meeting and they shall be re-eligible.
R. S. 1964, c. 293, s. 46.
48. The term of office of the directors shall be three years.
Nevertheless, of those elected at the organization meeting, one-third to the nearest whole number shall remain in office for one year only, and another such third for two years only.
If those who are to hold office for one year or two years only have not been chosen when they were elected, they shall be so chosen by lot at the meeting at which they are to be replaced.
R. S. 1964, c. 293, s. 47.
49. The board of directors shall manage the affairs of the union and shall exercise on its behalf, within the limits of the by-laws, the powers generally or specially delegated to it by the general meeting.
R. S. 1964, c. 293, s. 48.
50. The board of directors shall in particular
(a)  forward upon request to the Inspector General a certified true copy of the by-laws of the union;
(b)  control the keeping of the books;
(c)  maintain a liquid position in conformity with the by-laws of the federation with which the union is affiliated;
(d)  determine the rate of interest on savings and loans as well as the amount of the funds of which the committee on credit may dispose for loans to members;
(e)  make or control investments;
(f)  require any person entrusted with the management or custody of funds of the union to give security in accordance with the by-laws of the federation with which the union is affiliated;
(g)  insure the union against the risks of fire, theft and public and employers’ liability;
(h)  at the annual meeting, give an account of its operations and submit the annual report;
(i)  forward a certified copy of the annual report, within three months after the end of the fiscal year, to the Inspector General, to the Minister of Economic Development, Innovation and Export Trade and to the federation with which the union is affiliated;
(j)  facilitate the work of the inspectors and, as the case may be, of the auditor;
(k)  promote cooperation among the members of the union and between it and other cooperative bodies;
(l)  encourage, by any effective means, economic, social and cooperative education.
R. S. 1964, c. 293, s. 49; 1970, c. 59, s. 20; 1978, c. 85, s. 7; 1979, c. 77, s. 27; 1982, c. 52, s. 91; 1984, c. 36, s. 44; 1988, c. 41, s. 89; 1994, c. 16, s. 51; 1999, c. 8, s. 42; 2003, c. 29, s. 135; 2006, c. 8, s. 31.
51. The majority of the directors shall constitute a quorum of the board of directors.
The decisions of the board of directors shall be taken by the majority of the directors present.
In case of a tie, the chairman shall have a second vote.
R. S. 1964, c. 293, s. 50.
52. Any vacancy on the board of directors shall be filled, for the unexpired portion of the term of office of the director to be replaced, by the directors who remain in office.
However, if the number of directors remaining in office is not sufficient to constitute a quorum, any director or two members of the union may order the secretary to call a special meeting of the members to fill such vacancy.
R. S. 1964, c. 293, s. 51.
52.1. Any member of the board of directors having a direct or indirect interest in an undertaking with which the union has or intends to have business relations, must, under pain of forfeiture of office, disclose his interest and refrain from voting on any matter concerning that undertaking.
1978, c. 85, s. 8.
53. Every director or member of the committee on credit shall be personally liable for the damage caused to the union by his violation of this Act.
He may, however, free himself from such liability by having his dissent recorded in the minutes or by signifying it to the union by registered or certified letter within a reasonable delay from the time when the illegality comes to his notice.
R. S. 1964, c. 293, s. 52; 1975, c. 83, s. 84.
DIVISION X
BOARD OF SUPERVISION
54. The general meeting shall appoint, from among the members who do not form part of the board of directors or of the committee on credit and are not in the employ of the union, three supervisors who shall constitute the board of supervision.
The supervisors shall hold office until their successors are elected, and shall be re-eligible.
R. S. 1964, c. 293, s. 53.
55. The term of office of the supervisors shall be three years.
For the first two years, however, the supervisor to hold office for one year only and the one to hold office for two years only shall be chosen by lot.
R. S. 1964, c. 293, s. 54.
56. The supervisors shall choose each year from among their number a chairman and a secretary.
The presence of two supervisors is required to constitute a quorum of the board of supervision.
R. S. 1964, c. 293, s. 55.
57. Any vacancy on the board of supervision shall be filled, for the unexpired term of office of the supervisor to be replaced, as follows:
(a)  by the supervisors remaining in office; or
(b)  by the annual meeting if the supervisors have not filled such vacancy before such meeting is held; or
(c)  by a special meeting if there is more than one vacancy to fill.
R. S. 1964, c. 293, s. 56.
58. (Repealed).
R. S. 1964, c. 293, s. 57; 1978, c. 85, s. 9.
59. The board of supervision is charged with the supervision of the operations of the union.
It shall have access to all documents and may obtain any information it may require.
It may suspend from their duties the credit commissioners and the employees of the union.
R. S. 1964, c. 293, s. 58.
60. The board of supervision shall, in particular:
(a)  audit the cash in hand and securities;
(b)  ensure that operations are carried out in conformity with the by-laws and the decisions of the general meeting;
(c)  control the decisions of the committee on credit and the operations resulting therefrom;
(d)  report its findings and make its recommendations to the board of directors whenever it deems proper to do so;
(e)  call an extraordinary special meeting if the board of directors does not give effect to its recommendations, if any legal requirement or by-law relating to the management of the union or the security required to ensure repayment of loans is not observed or if it suspends the credit commissioners from their duties;
(f)  report forthwith to the board of directors the reasons why it suspends an employee of the union from his duties;
(g)  ensure that the operations of the union are inspected periodically in accordance with section 89;
(h)  if the annual meeting has appointed an auditor, ensure that the annual report has been audited by such auditor;
(i)  upon receipt of the report contemplated in section 93, submit its recommendations to the board of directors and, if it deems it expedient, order the holding of a special meeting of the members of the union.
The special meeting contemplated in paragraph i shall be called in accordance with section 45, which shall apply with the necessary modifications.
R. S. 1964, c. 293, s. 59; 1970, c. 59, s. 21.
DIVISION XI
COMMITTEE ON CREDIT
61. The general meeting shall elect, from among the members who do not form part of the board of directors or of the board of supervision and are not in the employ of the union, three or five commissioners who shall constitute the committee on credit.
The commissioners shall hold office until their successors are elected and shall be re-eligible.
R. S. 1964, c. 293, s. 60.
62. The term of office of the commissioners shall be three years.
However, of those who are elected at the organization meeting, one-third, to the nearest whole, shall remain in office for one year only, and another like third for two years only.
If those to hold office for one or two years only were not chosen when elected, they shall be chosen by lot at the meeting at which they are to be replaced.
R. S. 1964, c. 293, s. 61.
63. The commissioners choose each year from among their number a chairman and a secretary; deputy-secretary may be designated from among the persons contemplated in the second paragraph. The deputy replaces the secretary when the latter is absent or unable to act.
The manager and any person entitled to authorize loans may attend the meetings of commissioners but have no vote.
A majority of the commissioners shall constitute a quorum of the committee on credit.
R. S. 1964, c. 293, s. 62; 1978, c. 85, s. 10.
64. Only the committee on credit may authorize loans to members and the signing of releases, discharges or waivers of priority. Such decisions shall only be taken unanimously by the commissioners present and entitled to vote.
The committee on credit may, upon such conditions as it determines, delegate to the manager, or to any other person that may be designated by the board of directors, its power to authorize loans to members, except loans secured by hypothec on real estate or on machinery intended for industrial or commercial purposes; however, neither the manager nor a person designated by the board of directors may thus authorize a loan exceeding $2,000 to any member or authorize a loan of $2,000 or less to any member where the outstanding balance on the loans to that member amounts to more than $2,000 or where the loan to such member would increase that balance to over $2,000. The union, by by-law, may fix a limit above $2,000.
The passing of such a by-law, and any amendment to it, is subject to section 40; such a by-law, and any by-law amending it, comes into force only after being approved by the federation with which the union is affiliated.
The committee on credit may require the borrower to provide such real or personal security as is necessary to ensure the repayment of the loan.
Any member whose application for a loan has been refused may appeal to the board of directors.
The by-laws of the union shall also determine the extent and conditions of the powers of the committee on credit.
R. S. 1964, c. 293, s. 63; 1970, c. 59, s. 22; 1978, c. 85, s. 11; 1992, c. 57, s. 456.
64.1. Every loan exceeding $10,000 not secured by hypothec on real estate or on machinery intended for industrial or commercial purposes, granted by a union to one of its executive officers or to any person entitled to authorize loans, and any loan of $10,000 or less not thus secured granted to one of such persons whereas the balance of such loans to that person exceeds $10,000 or which increases the balance of such loans to that person to more than $10,000 must be approved by the federation with which the union is affiliated.
The same rule applies to every loan exceeding $10,000 not thus secured granted by a union, for which one of the executive officers of the union or any person entitled to authorize loans is surety.
1978, c. 85, s. 12; 1992, c. 57, s. 457.
64.2. Any loan exceeding $40,000 secured by hypothec on real estate or on machinery intended for industrial or commercial purposes, granted by a union to one of its executive officers or to any person entitled to authorize loans, and any loan of $40,000 or less thus secured and granted to one of such persons whereas the balance of such loans to that person exceeds $40,000 or increases the balance of such loans to that person to more than $40,000 must be approved by the federation with which the union is affiliated.
1978, c. 85, s. 12; 1992, c. 57, s. 458.
64.3. In sections 64, 64.1 and 64.2, the word federation does not include the Confédération des caisses populaires et d’économie Desjardins du Québec.
1978, c. 85, s. 12; 1979, c. 90, s. 3.
65. A credit commissioner, the manager or any person entitled to authorize loans, who has a direct or indirect interest in the application for a loan, must disclose his interest and, in the case of a commissioner, must also refrain from voting on that application.
R. S. 1964, c. 293, s. 64; 1978, c. 85, s. 13.
66. Any vacancy on the committee on credit shall be filled, for the unexpired term of office of the commissioner to be replaced, by the board of directors or, in default thereof, by the general meeting.
R. S. 1964, c. 293, s. 65.
DIVISION XII
SPECIAL COMMITTEES
67. The board of directors, to facilitate the proper functioning of a union, may establish special committees and determine, within the limits of its powers, their duties which they shall perform under its direction.
R. S. 1964, c. 293, s. 66.
68. No employee of the union except the manager shall be a member of a special committee.
R. S. 1964, c. 293, s. 67.
DIVISION XIII
OFFICERS AND EMPLOYEES
69. The board of directors, at its first sitting after the organization meeting or the annual meeting or during such meeting, shall choose from among the directors a president, a vice-president and a secretary.
The board of directors shall also appoint a manager whom it may choose from among the directors.
The same person may hold the offices of secretary and manager.
R. S. 1964, c. 293, s. 68; 1978, c. 85, s. 14.
70. The president, vice-president and secretary of the board of directors shall also be the president, vice-president and secretary of the union.
R. S. 1964, c. 293, s. 69.
71. In the case of the absence or inability to act of the president, the vice-president shall exercise his duties and powers.
R. S. 1964, c. 293, s. 70.
72. The by-laws shall determine the powers and duties of the president, vice-president, secretary and manager.
R. S. 1964, c. 293, s. 71.
73. The manager shall carry out his duties under the direction of the board of directors.
R. S. 1964, c. 293, s. 72.
74. The offices of director, commissioner and supervisor as well as those of president, vice-president and secretary shall be gratuitous, except that of manager.
The services of the manager may be paid for only by means of a fixed remuneration the amount of which shall be determined by the board of directors for a stated period.
R. S. 1964, c. 293, s. 73.
DIVISION XIV
BOOKS AND CONTRACTS
75. Each union shall cause to be kept and preserved at its head office separate books or registers in which shall be entered:
(a)  its by-laws and all amendments;
(b)  the minutes of the general meeting, of the board of directors, of the board of supervision, the committee on credit and every special committee;
(c)  the name, address and occupation or calling of each member.
R. S. 1964, c. 293, s. 74.
76. The board of directors shall designate persons authorized to sign any contract or other document on behalf of the union.
R. S. 1964, c. 293, s. 75.
DIVISION XV
TRANSACTIONS
77. A union may carry on with any person such transactions as are useful to ensure its proper functioning and the achievement of its objects.
All its productive or gainful activities being essentially cooperative shall be restricted exclusively to members.
Such cooperative activities shall not be deemed to constitute the carrying on of trade, a financial establishment or means of earning a profit.
R. S. 1964, c. 293, s. 76.
77.1. No union may, in the case of a loan or deposit, grant a preferential rate to one of its executive officers or employees on the mere grounds of his capacity as such.
In addition to the other penalties provided for in this Act, any person found guilty of such an offence is forfeited of office.
1978, c. 85, s. 15.
78. The total amount of the sums borrowed by a union shall not at any time exceed twice the amount of the general reserve and of its paid-up and unimpaired capital.
For the purposes of this section, the savings deposited in a union by its members and the loans fully secured by hypothec on securities or made for transitional requirements of liquid assets from the federation with which the union is affiliated are not regarded as sums borrowed.
R. S. 1964, c. 293, s. 77; 1970, c. 59, s. 23; 1978, c. 85, s. 16; 1992, c. 57, s. 459.
79. The fiscal year of a union shall be the calendar year, unless the by-laws fix another period.
R. S. 1964, c. 293, s. 78.
80. A union shall use the system of accounting recognized by the federation with which it is affiliated.
R. S. 1964, c. 293, s. 79; 1970, c. 59, s. 24.
81. The books shall be closed at the end of the fiscal year and during the three ensuing months the board of directors shall have the manager prepare the annual report which shall contain
(a)  the names and addresses of the directors and the number of members at the end of the fiscal year;
(b)  a statement of assets and liabilities;
(c)  a statement of the operations during the fiscal year, indicating profits and losses;
(d)  such other information as is required by the by-laws.
R. S. 1964, c. 293, s. 80.
82. The manager shall send to the federation with which the union is affiliated four copies of the report certified over his signature. Such federation, after audit, shall return two of the copies to the union and send two of them to the Inspector General.
R. S. 1964, c. 293, s. 81; 1970, c. 59, s. 25; 1982, c. 52, s. 107.
DIVISION XVI
INVESTMENTS
83. With the exception of loans to its members and sums deposited with a bank, a savings bank, a trust company, another union or a federation, the investments of a union shall be made
(a)  in bonds or other evidences of indebtedness issued or guaranteed by the government of Québec or of Canada, by a municipality or a school board in Québec, by the Comité de gestion de la taxe scolaire de l’île de Montréal, by a fabrique in Québec, or by an ecclesiastical, religious or cemetery corporation in Québec;
(b)  in bonds or other evidences of indebtedness secured by the transfer to a trustee of an undertaking by the government of Québec or of Canada to pay sufficient subsidies to pay the interest and principal at their respective maturities;
(c)  in bonds issued by a cooperative, a federation of cooperatives or by a corporation of which the majority of common shares is held by one of such institutions:
(1)  if they are secured by hypothec ranking first on real estate and equipment;
(2)  if they are secured by hypothec ranking first on real estate in Québec and if the amount of the debt is not more than 75% of the value of the real estate securing payment thereof; or
(3)  if they are secured by hypothec ranking first on equipment and if such institution has paid in full the interest on its other debts during the 10 years preceding the acquisition;
(d)  in preferred shares or in any evidences of indebtedness other than those contemplated in paragraph c issued by a cooperative, a federation of cooperatives or by a corporation the majority of the common shares of which is held by one of such institutions, provided that the investments of the union under this paragraph do not exceed 1% of its assets;
(e)  in bonds or other evidences of indebtedness issued by persons other than those contemplated in subparagraph c and secured by hypothec on real estate in Québec, if the hypothec ranks first and if the amount of the debt is not more than 75% of the value of the real estate securing payment thereof;
(f)  in real estate securing payment of a debt owing to it, in order to assure total or partial payment of such debt;
(g)  in other real estate, if it is situated in Québec and if the total investment of the union in such real estate does not exceed 15% of its assets.
A union may also make any other investment which any general law or special Act of Québec authorizes it to make.
A union must dispose of real estate which it has acquired in accordance with subparagraph f within seven years following the acquisition thereof; however, such delay may be extended by the Inspector General.
R. S. 1964, c. 293, s. 82; 1970, c. 59, s. 26; 1976, c. 39, s. 12; 1977, c. 5, s. 14; 1982, c. 52, s. 107; 1982, c. 26, s. 289; 1988, c. 84, s. 701; 1995, c. 33, s. 21; 1996, c. 2, s. 104; 2002, c. 75, s. 33.
84. One-half of the general reserve must be deposited with the federation with which the union is affiliated, or invested in the manner prescribed in paragraph a, b, or e of section 83.
In the first paragraph, the word federation does not include the Confédération des caisses populaires et d’économie Desjardins du Québec.
R. S. 1964, c. 293, s. 83; 1970, c. 59, s. 26; 1978, c. 85, s. 17; 1979, c. 90, s. 3.
85. No union, without the previous approval of the federation with which it is affiliated, may
(a)  make any investment contemplated in paragraphs a to g of section 83;
(b)  acquire any real estate, except by a giving in payment, or erect or make any major alteration in a building thereon;
(c)  dispose of real estate it holds for purposes other than investment;
(d)  become the lessee of a building or make major lessee’s improvements to a building it occupies or intends to occupy as lessee.
In the case of a union affiliated with a federation affiliated with the Confédération des caisses populaires et d’économie Desjardins du Québec, the approval of the latter is not required.
The approval of a federation does not engage its liability.
R. S. 1964, c. 293, s. 84; 1970, c. 59, s. 27; 1978, c. 85, s. 18; 1979, c. 90, s. 3.
DIVISION XVII
ANNUAL OPERATING SURPLUS
86. The members of the union, at the annual meeting, after considering the recommendations of the board of directors and in accordance with the statement of the last business year, shall divide the amount of the annual operating surplus, allocating it first of all to the funding of the general reserve in accordance with section 87. Any balance is allocated to:
(a)  the payment of the interest on the amounts paid up on shares;
(b)  the payment of rebates to depositors or borrowers in proportion to the operations carried on by each of them with the union; or
(c)  the constitution of the fund contemplated in section 88.
R. S. 1964, c. 293, s. 85; 1970, c. 59, s. 29; 1978, c. 85, s. 19.
87. Every union must establish and maintain a general reserve.
The annual operating surplus must be allocated to that reserve in such amount that the general reserve thereupon becomes equal to at least 3 1/2% of the liabilities of the union constituted by the deposits of members, as established at the close of the last business year.
In the case of a federation, the percentage contemplated in the second paragraph is 1%.
This reserve shall not be divided among the members in whole or in part.
R. S. 1964, c. 293, s. 86; 1970, c. 59, s. 30; 1978, c. 85, s. 20.
88. The union may, by by-law, order the establishment of a fund which is to be used for social or community purposes.
Not more than 10% of the amount allocated to rebates may be paid into this fund; the sums constituting the fund must be used by the board of directors within 3 years after their allocation to the fund, failing which they must be paid into the general reserve.
In the case of the winding-up or dissolution of the union, the balance of this fund is paid into the general reserve.
1970, c. 59, s. 30; 1978, c. 85, s. 21.
DIVISION XVIII
INSPECTION
89. The operations of a union shall be inspected at least once each year by an inspector of the federation with which the union is affiliated or by an inspector of another federation which has made an agreement for such purpose with the federation with which such union is affiliated.
The inspection of a union affiliated with a federation that is itself affiliated with the Confédération des caisses populaires et d’économie Desjardins du Québec shall be carried out by an inspector of the latter.
R. S. 1964, c. 293, s. 87; 1970, c. 59, s. 31; 1979, c. 90, s. 3.
90. The inspector shall have access at any reasonable time to the books, accounts, securities and vouchers of the union and shall be entitled to require from the directors, employees and members such documents and information as are necessary for the performance of his duties.
The inspector shall, on request, identify himself and produce a certificate of his capacity issued by the federation or Confederation.
R. S. 1964, c. 293, s. 89; 1970, c. 59, s. 33; 1986, c. 95, s. 39.
91. The inspector may convene, separately or jointly, the board of directors, the board of supervision and the committee on credit, to submit and explain his preliminary or final inspection report.
R. S. 1964, c. 293, s. 90; 1970, c. 59, s. 34.
92. The board of directors of the federation with which a union is affiliated may order the holding of a special meeting of the members of such union and submit the inspector’s report to them. Such special meeting shall be called in accordance with section 45, which shall apply with the necessary modifications.
The federation shall not incur any liability by acting in good faith in accordance with this section.
R. S. 1964, c. 293, s. 91; 1970, c. 59, s. 35.
93. At the request of the board of directors of a union, of its board of supervision, of 100 of its members if there are 300 or more members or of one-third of its members if there are fewer than 300 members, or of the federation with which such union is affiliated, the Inspector General may appoint an inspector to inspect the operations of such union.
The Inspector General may in his own right also appoint such an inspector.
The inspector contemplated in the preceding paragraphs shall have for such purpose the powers assigned to a commissioner by the Act respecting public inquiry commissions (chapter C-37).
He shall report to the Inspector General.
Upon receipt of such report, the Inspector General shall forward one copy thereof to the board of supervision, one copy to the federation with which the union is affiliated, and one copy to one of the persons who applied for the inspection.
R. S. 1964, c. 293, s. 92; 1970, c. 59, s. 36; 1978, c. 85, s. 22; 1982, c. 52, s. 107.
DIVISION XIX
AMALGAMATION
94. Several unions affiliated with the same federation or with different federations may amalgamate and make the contracts and agreements necessary for such purpose.
1970, c. 59, s. 37.
95. Unions proposing to amalgamate shall prepare in five copies a deed of agreement prescribing:
(a)  the conditions of the amalgamation and the mode of effecting it;
(b)  the name of the union resulting from the amalgamation;
(c)  the head office of the union resulting from the amalgamation;
(d)  the territory or group in which the union may recruit members;
(e)  the name of the federation with which the union will be affiliated;
(f)  the names, occupations and residences of its first directors, supervisors and credit commissioners;
(g)  the mode of election of subsequent directors, supervisors and credit commissioners;
(h)  the number of shares subscribed in each of the amalgamating unions and the manner of converting them into common shares of the union resulting from the amalgamation; and
(i)  any other measure required in order to effect the amalgamation and provide for the management and operation of the union resulting therefrom.
1970, c. 59, s. 37.
96. The deed of agreement must be submitted for approval to the members of each of the unions concerned at a general meeting called specially for such purpose and to the federations with which such unions are affiliated.
1970, c. 59, s. 37.
97. If the deed of agreement is approved by the members of each of the unions by a majority vote of the members present, that fact shall be attested by the secretary of each union on each of the copies of the deed of agreement.
1970, c. 59, s. 37.
98. The amalgamating unions shall then apply to the Minister, by a joint petition submitted in five copies, for confirmation of the deed of agreement.
The petition must be accompanied by a copy of each of the resolutions of the federations with which the unions are affiliated, approving the amalgamation, and a copy of the resolution passed for the purpose of accepting the affiliation of the proposed union by the federation which accepts such affiliation.
1970, c. 59, s. 37.
99. If the petition is granted, the Minister shall attest the fact upon each copy of the petition, by affixing his signature thereto. Before granting the petition, the Minister shall obtain the opinion of the Inspector General.
A notice that the petition has been granted shall be published by the Inspector General in the Gazette officielle du Québec at the expense of the union resulting from the amalgamation.
1970, c. 59, s. 37; 1982, c. 52, s. 92.
100. Following publication of the notice provided for in section 99, one of the copies of the petition, with a copy of the deed of agreement, shall be filed with the Inspector General, and the four other copies shall be sent to the secretary of the union resulting from the amalgamation; he shall deliver one copy of the petition and of the deed of agreement to the clerk of the district in which the head office of the union resulting from the amalgamation is situate; he shall keep one copy in the records of the union and forward the two other copies to the federation with which the union is affiliated.
1970, c. 59, s. 37; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 93.
101. From the date of publication of the notice provided for in section 99, the unions shall be amalgamated and shall be a single union under the name specified in the deed of agreement.
1970, c. 59, s. 37.
102. The union resulting from the amalgamation shall have all the rights and obligations of the unions so amalgamated and proceedings commenced by or against them may be continued without proceedings in continuance of suit.
1970, c. 59, s. 37.
DIVISION XX
PROVISIONAL ADMINISTRATOR
103. If following an inspection made under this Act the Government is of opinion that there has been malfeasance, breach of trust or other misconduct by one or more members of the board of directors, the board of supervision or the committee on credit of a union, or that such a board or committee is seriously remiss in the performance of the obligations imposed upon it by this Act or follows administrative practices which endanger the security of the savings of the members, it may order that the powers of such board or such committee be suspended and appoint an administrator who shall exercise its powers for such period as the Minister shall determine.
For the purposes of the first paragraph, the Government shall proceed upon the recommendation of the Minister acting, after having obtained the opinion of the Inspector General, in his own right or upon the application of the federation with which the union concerned is affiliated.
Before the powers of such board or such committee are suspended, the Minister must give the union to which such board or such committee belongs an opportunity to present observations; he shall also give a similar notice for such purpose to the federation with which the union is affiliated unless he is acting upon the application of the federation.
1970, c. 59, s. 37; 1978, c. 85, s. 23; 1982, c. 52, s. 94; 1997, c. 43, s. 103.
104. The administrator must present to the Minister, with the least possible delay, a detailed report of his findings, together with his recommendations and forward a copy to the Inspector General.
The administrator remains in office until the expiry of the period for which he has been appointed, unless, before then, the Minister prolongs or terminates his term of office.
As soon as his term of office has expired, the administrator must send a complete report of his administration to the Minister and forward a copy to the Inspector General.
The costs, fees and expenditures of the transitional administration are payable by the union, unless the Minister orders otherwise.
1970, c. 59, s. 37; 1978, c. 85, s. 24; 1982, c. 52, s. 95.
105. The Government, upon the recommendation of the Minister, after the latter has received the administrator’s report contemplated in section 104, may:
(a)  declare the members of the board of directors, of the board of supervision or of the committee on credit to be dismissed from office and order that a special meeting of the members be held to proceed with the election of new members of such board or committee; or
(b)  order upon such conditions as it shall determine the winding-up of the union and appoint a liquidator.
The decision of the Government ordering the winding-up shall have the same effect as an order made by a judge of the Superior Court under section 25 of the Winding-up Act (chapter L‐4); in other respects, the provisions of Division IV of the said Act and of sections 107 and 108 of this Act shall apply with the necessary modifications to the winding-up so ordered in so far as they are not inconsistent with this division.
1970, c. 59, s. 37; 1978, c. 85, s. 25.
DIVISION XXI
WINDING-UP
106. A union may decide to wind up its affairs by the affirmative vote of three-fourths of the members present at a general meeting called for such purpose.
Such meeting shall then appoint, by the majority of the members present, one or three liquidators who shall be entitled to immediate possession of the property of the union.
The provisions of Divisions II and III of the Winding-up Act (chapter L‐4) not inconsistent with those of this division shall apply with the necessary modifications to the winding-up so decided upon.
R. S. 1964, c. 293, s. 93; 1970, c. 59, s. 38.
107. As soon as winding-up has been voted by the general meeting, every action and every proceeding by way of seizure by garnishment, seizure before judgment or seizure in execution, or otherwise, against the movable or immovable property of the union, must be suspended.
The costs incurred by a creditor after he has had knowledge of the winding-up, by himself or by his attorney, cannot be collocated against the proceeds of the property of the union, which are distributed in consequence of the winding-up.
A judge of the Superior Court in the district in which the head office of the union is located may, however, on such conditions as he may deem proper, authorize the institution of a suit or the continuance of any proceedings commenced.
R. S. 1964, c. 293, s. 94; 1965 (1st sess.), c. 80, a. 1.
108. The liquidator first pays the debts of the union and the costs of winding it up and repays to the members the amounts paid on their shares.
After such payments, the balance from the winding-up, including the balance of the general reserve, devolves to the federation with which the union was affiliated.
The liquidator must, within 7 days after the expiry of any period of three months, send to the Minister a brief report of his activities for such period and forward a copy to the Inspector General.
When the winding-up of the union is terminated, the liquidator must send to the Minister a complete report of his activities, forward a copy to the Inspector General and deliver to the federation with which the union was affiliated the documents of which he took possession for the purposes of the winding-up.
R. S. 1964, c. 293, s. 95; 1970, c. 59, s. 39; 1978, c. 85, s. 26; 1982, c. 52, s. 96.
DIVISION XXII
DISSOLUTION ORDER
109. The Minister may, after having obtained the opinion of the Inspector General, order the dissolution of a union:
(a)  if the number of its members is reduced to less than twelve;
(b)  if it has failed to provide the Minister with proof of its affiliation with a federation in accordance with section 9 or section 122;
(c)  if it has failed to hold an annual general meeting of its members during three consecutive years; or
(d)  if it has failed for more than three years to prepare the report contemplated in section 81.
1970, c. 59, s. 40; 1982, c. 52, s. 97.
110. Before ordering the dissolution of a union, the Minister must notify the union in writing as prescribed by section 5 of the Act respecting administrative justice (chapter J-3), advising it of the penalty to which it is liable and allow the union at least 10 days to present observations. Notification shall be sent by registered or certified mail to the last address of the union shown in the records of the Inspector General of Financial Institutions.
A notice shall also be published in the Gazette officielle Québec.
1970, c. 59, s. 40; 1975, c. 76, s. 11; 1975, c. 83, s. 84; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 98; 1997, c. 43, s. 104.
111. The Minister may order the dissolution of a union if, before the sixtieth day following the date on which notification was given to it, it has not remedied its default.
1970, c. 59, s. 40; 1997, c. 43, s. 105.
112. The dissolution order shall take effect from the date of its publication in the Gazette officielle du Québec.
1970, c. 59, s. 40.
113. The Public Curator shall be ex officio curator to the property of the dissolved union. He shall render an account to the Minister and forward a copy of it to the Inspector General.
1970, c. 59, s. 40; 1982, c. 52, s. 99.
114. The balance of the assets of the dissolved union shall devolve to the federation with which such union was affiliated.
When the dissolution of the union is terminated, the public curator shall hand over to the federation with which the union was affiliated the documents of which he took possession for the purposes of the dissolution.
1970, c. 59, s. 40.
DIVISION XXIII
PROVISIONS PECULIAR TO UNAFFILIATED UNIONS
115. The Minister may, exceptionally, upon such conditions as he shall determine, and after having obtained the opinion of the Inspector General, approve the formation of a union, even if such union does not affiliate with a federation.
The provisions of this Act shall apply with the necessary modifications to such a union and to any union which was not affiliated with a federation on 17 July 1970, subject to any inconsistent provisions of this division.
1970, c. 59, s. 40; 1982, c. 52, s. 100.
116. No union to which this division applies shall assume a name which includes any expression mentioned in section 12 unless such name has been approved by all of the bodies whose approval provided for in the said section would be required for such name if this division did not apply to such union.
1970, c. 59, s. 40.
117. Every union that is not affiliated with a federation must at each annual meeting appoint an auditor to audit the report contemplated in section 81.
If no auditor has been appointed by such a union, or if a vacancy occurs in such office, the board of supervision must appoint one.
The correctness of such report must be certified by the auditor, and a copy bearing such certificate must be forwarded to the Inspector General before the annual meeting.
1970, c. 59, s. 40; 1982, c. 52, s. 107.
118. The inspection of the operations of any union not affiliated with a federation must be carried out at least once each year by an inspector appointed by the Inspector General. The costs of such inspection shall be charged to the union.
1970, c. 59, s. 40; 1982, c. 52, s. 107.
119. The board of directors of an unaffiliated union must in particular:
(a)  maintain liquidity in accordance with the requirements of the Inspector General;
(b)  require any person entrusted with the management or custody of the funds of the union to give security in accordance with the standards prescribed by the Inspector General;
(c)  adopt an accounting method recognized by the Inspector General.
1970, c. 59, s. 40; 1982, c. 52, s. 107.
120. In all cases in which this Act requires an affiliated union to obtain the authorization of the federation to which it belongs, a union not affiliated with a federation must obtain the authorization of the Inspector General.
1970, c. 59, s. 40; 1982, c. 52, s. 107.
121. In the case of the winding-up or dissolution of an unaffiliated union, the balance derived from the winding-up or dissolution, including the balance of the general reserve, devolves to an institution designated by the Government, which also determines to whom are to be delivered the documents of which the liquidator or the public curator took possession.
1970, c. 59, s. 40; 1978, c. 85, s. 27.
122. A union whose affiliation with a federation ceases must, within sixty days following the date on which the affiliation ceases, furnish the Minister with proof of its affiliation with another federation. The Minister may, however, on such conditions as he shall determine, extend such delay and, if the name of such union includes an expression mentioned in section 12, give it another name that includes no such expression.
1970, c. 59, s. 40.
DIVISION XXIV
FEDERATIONS
123. The Minister, upon the filing of the memorandum of association provided for in section 124, and after having obtained the opinion of the Inspector General, may authorize the formation of a federation of savings and credit unions.
Such memorandum shall be signed on behalf of at least twelve unions, by representatives specially authorized for that purpose by resolutions of their respective boards of directors, each resolution ratified by the general meeting of the members, and stating the names of the persons authorized to sign such memorandum of association.
R. S. 1964, c. 293, s. 96; 1982, c. 52, s. 101.
124. Unions wishing to form a federation shall sign in duplicate a memorandum of association in conformity with form 3.
R. S. 1964, c. 293, s. 97.
125. The memorandum of association shall state:
(a)  the name of the proposed federation;
(b)  its head office;
(c)  the territory in which it shall recruit its members;
(d)  the amount of a share of stock, if shares are provided for;
(e)  the names of the member unions and the number of shares subscribed for by each;
(f)  the name, occupation and residence of the person designated to act as provisional secretary of the federation to send to the Minister the copies of the declaration and to call the organization meeting;
(g)  the manner of calling such meeting which must be held within sixty days after publication of the notice provided for in section 127.
R. S. 1964, c. 293, s. 98; 1970, c. 59, s. 41.
126. The name of a federation shall comply with the provisions of section 10.
A second name including the expression “central union” or “regional union” may however be adopted for the exercise of certain powers.
R. S. 1964, c. 293, s. 99.
127. The two copies of the memorandum shall be sent to the Minister. If he approves the formation of the federation, he shall so signify by signing each copy.
Notice of such approval shall be published in the Gazette officielle du Québec at the expense of the federation.
After the publication of such notice, one of the duplicates of the memorandum shall be deposited with the Inspector General and the other shall be returned to the provisional secretary of the federation.
From the publication of such notice in the Gazette officielle du Québec, the member unions shall constitute a federation which is a corporation within the meaning of the Civil Code of Lower Canada.
R. S. 1964, c. 293, s. 100; 1966-67, c. 72, s. 23; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 102.
128. The Minister, upon the filing of a memorandum similar to that provided for in section 124 and after having obtained the opinion of the Inspector General, may authorize the formation of a federation consisting of federations of savings and credit unions.
The memorandum of association shall be signed by the representatives of at least five federations.
R. S. 1964, c. 293, s. 101; 1982, c. 52, s. 103.
129. The object of a federation is to safeguard the similar interests of its members and for such purpose it may:
(a)  exercise the powers of a union;
(b)  establish educational, publicity and technical assistance services;
(c)  make agreements with an affiliated union to supervise or manage its affairs for a fixed period;
(d)  determine the amount and the mode of payment of the subscriptions of its affiliated unions;
(e)  supply persons interested in forming a union with the necessary information to ensure its efficacy and facilitate its formation;
(f)  assist unions affiliated with it by guaranteeing the carrying out of their commitments.
R. S. 1964, c. 293, s. 102; 1970, c. 59, s. 42.
130. To become a member of a federation, a union or federation which has not signed the memorandum of association must:
(a)  sign an application for membership authorized and ratified in accordance with section 123;
(b)  agree to comply with the by-laws of the federation and, if the by-laws so require, subscribe for the required number of shares;
(c)  be admitted by the board of directors of the federation.
R. S. 1964, c. 293, s. 103.
131. The general meeting of a federation shall be composed of the delegates of the unions or federations that are members thereof.
The organization meeting, however, shall consist of the persons who signed as representatives the memorandum of association.
R. S. 1964, c. 293, s. 104.
132. The by-laws of the federation shall enact the rules for the representation of its members at meetings and determine the basis for fixing the number of delegates of each.
R. S. 1964, c. 293, s. 105.
133. The by-laws of a federation shall determine how its board of directors shall be constituted, the number of the directors, which may be more than fifteen and be divided into districts or groups, how they are to be elected, at the annual meeting or at district or group meetings, and the quorum of the board of directors.
Unless otherwise provided in the by-laws, the directors of a federation shall be chosen from among the directors of the affiliated unions or federations.
The president of a federation may be paid for his services. If so it must be by means of a fixed remuneration the amount of which is determined for a given period by the board of directors.
R. S. 1964, c. 293, s. 106.
134. If the board of directors of a federation consists of more than eight directors, it may, if authorized to do so by by-law, establish an executive committee.
Such executive committee shall consist of at least five persons chosen from among the directors by the board of directors which shall designate the chairman thereof.
Such executive committee shall exercise such powers of the board of directors as are delegated to it by the by-law.
R. S. 1964, c. 293, s. 107; 1970, c. 59, s. 44.
135. Every federation shall establish and maintain, to the satisfaction of the Inspector General, a service for the inspection of its affiliated unions, unless, by the terms of an agreement for such purpose which it has made with another federation, the latter is entrusted with the inspection of such unions. Before coming into force, such an agreement must be approved by the Inspector General.
Such obligation shall not apply to a federation affiliated with the Confédération des caisses populaires et d’économie Desjardins du Québec.
R. S. 1964, c. 293, s. 108; 1970, c. 59, s. 44; 1979, c. 90, s. 3; 1982, c. 52, s. 107.
136. Every federation must send each year to the Inspector General a report of the inspection made of each of its affiliated unions; the Inspector General shall determine the form and tenor of such report.
R. S. 1964, c. 293, s. 109; 1970, c. 59, s. 44; 1982, c. 52, s. 107.
137. In addition to the investments which this Act authorizes it to make through the application of section 144, the investments that a federation may make shall include investments in real estate in Québec, provided that the total investment of the federation in such real estate does not exceed 20% of its assets.
R. S. 1964, c. 293, s. 110; 1970, c. 59, s. 44.
138. A federation whose assets exceed $2,500,000 may also acquire and hold fully paid shares of any bank, savings bank, trust company, insurance company or mutual funds company incorporated in Canada and doing business in Québec.
1970, c. 59, s. 44.
139. Any federation contemplated in section 138 may also acquire fully paid shares issued by a corporation incorporated in Canada and doing business in Québec,
(a)  if the corporation which issued them has, during each of the five years preceding the acquisition, earned and paid on its outstanding preferred shares a dividend at least equal to the specified rate; and
(b)  if such corporation has, during each of the five years preceding the acquisition, earned and paid on its common shares a dividend of at least four per cent of their book value.
1970, c. 59, s. 44.
140. However, in the exercise of the powers assigned to it by sections 138 and 139, no federation shall
(a)  invest more than thirty per cent of its assets in shares;
(b)  invest in shares an amount equal to more than three per cent of the total assets of the unions affiliated with it;
(c)  hold more than thirty per cent of the common shares of the same corporation, except a corporation contemplated in section 138;
(d)  invest more than ten per cent of its assets in the common shares of the same corporation contemplated in section 138;
(e)  invest more than three per cent of its assets in the common shares of the same corporation other than a corporation contemplated in section 138.
1970, c. 59, s. 44.
141. Any federation contemplated in section 138 may make all investments other than those it is authorized to make under sections 137, 138, 139 and 142, subject to the following restrictions:
(a)  the total amount of the investments made under this section must not exceed seven per cent of the assets of the federation;
(b)  the federation shall not, under this section, derogate from the restrictions imposed by sections 137 and 140.
1970, c. 59, s. 44.
142. A federation may also make any other investment which it is authorized to make by any general law or special Act of Québec.
1970, c. 59, s. 44.
142.1. A federation of unions which is affiliated with the Confédération des caisses populaires et d’économie Desjardins du Québec is not required to obtain the approval contemplated in section 85 for any investment contemplated in paragraph a of this section. However, it must, with the least possible delay, inform the latter federation of any such investment.
1978, c. 85, s. 28; 1979, c. 90, s. 3.
143. Within thirty days after the end of each half of its fiscal year, every federation holding shares of a corporation must furnish the Inspector General, in the form and tenor he prescribes, with a report on its investments in shares.
Such report shall be accompanied by a certificate of the auditor or inspector of the federation attesting that it has complied with the provisions of the law respecting its investments in shares and that such shares, unless they are bearer shares, are registered in the name of the federation.
1970, c. 59, s. 44; 1982, c. 52, s. 107.
144. The provisions respecting unions shall apply to federations, subject to the provisions of this division.
1970, c. 59, s. 44.
DIVISION XXV
PENAL PROVISIONS
1992, c. 61, s. 92.
145. Every person is guilty of an offence who
(a)  falsely leads to the belief, by the title which he assumes or otherwise, that he is a union or a federation;
(b)  furnishes the Minister or the Inspector General with information which he is required to furnish to him under this Act and which he knows to be inaccurate;
(c)  hinders or attempts to hinder, in any manner, any person who does an act which this Act obliges or authorizes him to do;
(d)  contravenes this Act.
1970, c. 59, s. 44; 1982, c. 52, s. 104.
146. Where a corporation is guilty of an offence against this Act, any person who has prescribed or authorized the commission of such offence, or has assented thereto or acquiesced or participated therein, shall be deemed a party to the offence and liable to the same penalty as that provided for the corporation, whether or not such corporation has been prosecuted or convicted.
However, a person who caused his dissent to be recorded in the minutes or who has given notice of it to the union or federation by registered or certified mail within a reasonable delay after he became aware of the commission of the offence shall not be deemed a party to the offence.
1970, c. 59, s. 44; 1975, c. 83, s. 84.
147. Every person convicted of an offence under this Act is liable to a fine of $50 to $1,000 and, in the case of a subsequent offence, to a fine of $200 to $5,000.
1970, c. 59, s. 44; 1992, c. 61, s. 93.
DIVISION XXVI
FINAL PROVISIONS
148. Any cooperative syndicate governed by the Cooperative Syndicates Act (chapter S-38) which wishes to pursue exclusively the objects contemplated in section 3 may cease to be governed by the said Act and become a union governed by this Act.
For such purpose it shall send to the Minister, in duplicate, an application in conformity with form 4.
If the Minister approves such application, he shall so indicate by signing each duplicate. Before granting his approval the Minister shall obtain the opinion of the Inspector General.
Notice of such approval shall be published in the Gazette officielle du Québec at the expense of the syndicate and, from such publication, the syndicate shall become a union governed by this Act.
After the publication of such notice, one of the duplicates of the application shall be deposited with the Inspector General and the other shall be sent to the union.
The publication of the notice shall be proof of the existence of the union and of the name by which it is to be designated.
1970, c. 59, s. 44; 1975, c. 76, s. 11; 1977, c. 5, s. 14; 1981, c. 9, s. 24; 1982, c. 52, s. 105.
149. No change made under section 148 shall adversely affect the rights and obligations of any union and proceedings instituted by or against it may be continued without proceedings in continuance of suit.
Such change shall not terminate the tenure of office of the directors, supervisors, commissioners or employees of a union nor shall it restrict the territory in which it was authorized to carry on its activities.
1970, c. 59, s. 44.
150. Every corporation incorporated before 27 March 1963 may continue to use the name that it was then legally authorized to use, notwithstanding the provisions of this Act; every corporation incorporated on such date or subsequently but before 17 July 1970 may continue to use the name that on the latter date it was legally authorized to use, notwithstanding the provisions of this Act.
1970, c. 59, s. 44.
151. Every union may continue to hold the investments made by it before 17 July 1970 in accordance with the laws then in force.
1970, c. 59, s. 44.
152. In the case of a union whose general reserve does not represent, at the close of the business year current on 23 June 1978, 3 1/2% or more of the liabilities of the union constituted by the deposits of members and, in the case of a union created after such date, the annual operating surplus must be allocated to the general reserve in the amount determined by the federation with which the union is affiliated or, in the case of an unaffiliated union, by the Inspector General.
This amount is determined each year for each union and the union may pay an amount exceeding the determined amount.
In the first paragraph, the word federation does not include the Confédération des caisses populaires et d’économie Desjardins du Québec.
1978, c. 85, s. 36 (part); 1979, c. 90, s. 3; 1982, c. 52, s. 107.
153. In the case of a federation to which this Act applies and whose general reserve is not, at the close of the business year current on 23 June 1978, equal to 1% or more of the liabilities of the federation constituted by the deposits of members, at least 25% of the annual operating surplus must be allocated to that reserve.
1978, c. 85, s. 37.
154. Where, after such allocation, the general reserve of a union subject to section 152 or of a federation subject to section 153 is equal, in the case of a union, to 3 1/2% or more or, in the case of a federation, to 1% or more of the liabilities constituted by the deposits of members, as at the close of the last business year, this union or federation becomes subject to section 87.
1978, c. 85, s. 38.
155. The sums allocated to a reserve, other than the general reserve constituted by a union before 23 June 1978, may be transferred to the general reserve of the union.
Until this transfer is made, these sums may be added to the amount of the general reserve, in order to determine the total amount that may be borrowed by the union under section 78 and one-half of these sums must be deposited or invested in accordance with section 84.
1978, c. 85, s. 39.
156. The Minister of Finance is responsible for the administration of this Act.
1982, c. 52, s. 106.
The Minister for Finance exercises, under the supervision of the Minister of Finance, the functions related to the administration of this Act. Order in Council 930-2011 dated 14 September 2011, (2011) 143 G.O. 2 (French), 4152.
157. (This section ceased to have effect on 17 April 1987).
1982, c. 21, s. 1; U. K., 1982, c. 11, Sch. B, Part I, s. 33.

Founding memorandum of a savings and credit union

The undersigned declare that they wish to form a savings and
credit union with limited liability, under the name of ........
..............................................................
..............................................................
with its head office at .......................................
in the electoral district of ..................................
and that they undertake, in order to become members thereof, to
subscribe for the number of shares indicated opposite their
names.
The ......................................... in which the
(territory or group)
union will recruit its members shall be .......................
..............................................................
Mr. .........................................................
(surname) (given names)

..............................................................
(occupation) (residence)

is appointed provisional secretary of the union to forward this
memorandum to the Minister of Finance and to call the
organization meeting by .......................................
..............................................................
(state the mode of calling)

within 60 days after the publication of the notice of
approval in the Gazette officielle du Québec.
The name of the federation with which the union will be
affiliated is ................................................

Dated at ...................... this ................. 20.....

===============================================================
. . . . . Number of
Witness . Given . Surname . Occupation . Residence . shares
. names . . . . of $5
. . . . . each
--------.-------.---------.------------.-----------.-----------
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
. . . . .
---------------------------------------------------------------
R. S. 1964, c. 293, Schedule I, form 1; 1966-67, c. 72, s. 23; 1970, c. 59, s. 45; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 108.

Application for membership in a savings and credit union

I, the undersigned, apply to become a member of .............
..............................................................
(name of union)

the head office of which is at ................................
I undertake to comply with the by-laws of the union and I
subscribe for ........................... shares of $5 each.

Signed at .................. this ................... 20.....

............................. .............................
(signature of the witness) (signature of the applicant)

Address .............................

Occupation ..........................

-----------------------

Accepted this ......................................... 20.....

by .............................................
R. S. 1964, c. 293, Schedule I, form 2; 1978, c. 85, s. 29.

Memorandum of association in a federation

The savings and credit unions hereinafter mentioned declare
that they wish to form a federation under the name of .........
..............................................................
with its head office at .......................................
in the electoral district of .............................. and
that they undertake to subscribe for the number of shares
indicated opposite their names.
The territory of the federation shall be ....................
..............................................................
Mr. .........................................................
(surname) (given names)

..............................................................
(occupation) (residence)

is appointed provisional secretary of the federation to forward
the memorandum of association to the Minister of Finance and to
call the organization meeting by ..............................
..............................................................
(state the mode)

within 60 days after the publication of the notice of
approval in the Gazette officielle du Québec.
Dated at ........................... this ...................
.......................... 20.....

===============================================================
Names of the . . Number of
associating unions . Head office . shares of
and signatures of . . $ each
their representatives . .
-------------------------.------------------.------------------
. .
1 ...................... . ................ . .................
. .
...................... . .
. .
...................... . .
. .
. .
2 ...................... . ................ . .................
. .
...................... . .
. .
...................... . .
. .
. .
3 ...................... . ................ . .................
. .
...................... . ................ . .................
. .
...................... . .
---------------------------------------------------------------

N.B. A certified copy of the resolution adopted by the board of
directors of each associating union and ratified by the
general meeting of its members, authorizing the signing of
this memorandum, must be annexed thereto.
R. S. 1964, c. 293, Schedule I, form 3; 1966-67, c. 72, s. 23; 1970, c. 59, s. 46; 1975, c. 76, s. 11; 1981, c. 9, s. 24; 1982, c. 52, s. 108.

Application by a cooperative syndicate to be governed by the
Savings and Credit Unions Act

The cooperative syndicate designated by the name of .........
..............................................................
the head office of which is at ................................
requests that it cease to be governed by the Cooperative
Syndicates Act and become a union governed by the Savings and
Credit Unions Act, under the following name: ..................
(name must comply
..............................................................
with section 10 of the Savings and Credit Unions Act)

The ............................................ in which the
(territory or group)
syndicate recruits its members is .............................
..............................................................
The name of the federation with which the union will be
affiliated is .................................................

Dated at ....................................................
this ........................... 20.....

..................................
(name of cooperative syndicate)

..................................
(president)

..................................
(secretary)

N.B. A certified copy of the resolution passed by the board of
directors of the syndicate and ratified by the general
meeting of its members, authorizing this application and
the signing thereof by the president and secretary, must
be annexed to this form.
R. S. 1964, c. 293, Schedule I, form 4; 1970, c. 59, s. 47.
REPEAL SCHEDULE

In accordance with section 17 of the Act respecting the consolidation of the statutes (chapter R-3), chapter 293 of the Revised Statutes, 1964, in force on 31 December 1977, is repealed effective from the coming into force of chapter C-4 of the Revised Statutes.