The ''Bank Act'' (1991, c. 46) (the ''Act'') is an
act of the
Parliament of Canada
The Parliament of Canada (french: Parlement du Canada) is the federal legislature of Canada, seated at Parliament Hill in Ottawa, and is composed of three parts: the King, the Senate, and the House of Commons. By constitutional convention, the ...
respecting banks and banking.
History
The ''Bank Act'' was originally passed in 1871. The terms of the ''Act'' provide for a statutory review of the ''Act'' on a regular basis to ensure that legislators update the ''Act'' in order that it keep pace with developments in the financial system. Historically, this was done on a decennial basis.
In 1992, this requirement was changed to every five years. The ''Act'' contains a "sunset" clause providing that it and the bank charters provided by it will expire unless the statutory review is conducted every five years. In 2016 the Federal Government proposed a 2 year extension to the review deadline. The most recent statutory review of the ''Act'' took place in 2019 with the next review scheduled for 2023.
Credit unions
In 2010, the
Parliament of Canada
The Parliament of Canada (french: Parlement du Canada) is the federal legislature of Canada, seated at Parliament Hill in Ottawa, and is composed of three parts: the King, the Senate, and the House of Commons. By constitutional convention, the ...
passed amendments to the ''Act'' to allow
federal
Federal or foederal (archaic) may refer to:
Politics
General
*Federal monarchy, a federation of monarchies
*Federation, or ''Federal state'' (federal system), a type of government characterized by both a central (federal) government and states or ...
credit unions to exist as a new class of financial institution. Credit unions differ from banks in that they are member-owned, democratically controlled and governed by co-operative principles. The ''Bank Act'' allows that federal credit unions may either be created by five persons (of which three must be individuals), or through the continuance of one or more credit unions existing within provincial jurisdiction. The provisions came into force at the end of 2012.
The first federal credit union in Canada was
UNI Financial Cooperation
Caisse populaire acadienne ltée, operating as UNI Financial Cooperation (french: UNI Coopération financière), is a Francophone credit union (french: caisse populaire) based in New Brunswick, Canada whose members are primarily Acadians. UNI's ad ...
(formerly Mouvement des caisses populaires acadiennes), based in
New Brunswick
New Brunswick (french: Nouveau-Brunswick, , locally ) is one of the thirteen provinces and territories of Canada. It is one of the three Maritime provinces and one of the four Atlantic provinces. It is the only province with both English and ...
, which converted to a federal charter in 2016.
On June 30, 2017, the
Office of the Superintendent of Financial Institutions
The Office of the Superintendent of Financial Institutions (OSFI; french: Bureau du surintendant des institutions financières, BSIF) is an independent agency of the Government of Canada reporting to the Minister of Finance created "to contribute ...
issued an advisory, stating that it planned to enforce the ''Bank Acts prohibitions on using the word or verbiage "bank" in connection to any financial service that is not a bank. The terms were required to be removed from websites by the end of 2017, from print materials by the end of June 2018, and from physical signage by the end of June 2019. The announcement was criticised by credit unions, who believed that it would make it difficult to market their services in a comparable manner to banks, as well as the costs of updating marketing materials to comply with the mandate. The OSFI suspended the advisory in August 2017, after the federal government stated that it would review the rules. In February 2018, the ''Bank Act'' was amended as a riser to the federal budget, allowing credit unions to use banking vernacular to market their services.
Structure
The ''Act'' groups banks in three schedules. Schedule I banks are domestic banks allowed to accept deposits. Schedule II banks are subsidiaries of foreign banks that allowed to accept deposits through branches in Canada. Schedule III banks are foreign banks with certain restrictions upon the banking business they can conduct in Canada.
The Canadian banking industry includes 20 domestic banks, 24 foreign bank subsidiaries and 22 foreign bank branches operating in Canada.
ATB Financial
ATB Financial is a financial institution and Crown corporation wholly owned by the province of Alberta, the only province in Canada with such a financial institution under its exclusive ownership.
Originally established as Alberta Treasury Br ...
, a financial institution owned by the
Government of Alberta
The government of Alberta (french: gouvernement de l'Alberta) is the body responsible for the administration of the Canadian province of Alberta. As a constitutional monarchy, the Crown—represented in the province by the lieutenant governor—i ...
, and Canada's many credit unions, are not included in this list.
See also
*
Banking in Canada
Banking in Canada is one of Canada's most important industries with several banks being among its largest and most profitable companies.
It is dominated by a small number of large banks, with the six largest combining for 90% of the market shar ...
*
List of banks and credit unions in Canada
This is a list of banks in Canada, including chartered banks, credit unions, trusts, and other financial services companies that offer banking services and may be popularly referred to as "banks".
The "Big Five"
Canada's "big five" banks, ...
*
List of Acts of Parliament of Canada
This is an incomplete list of the continuing Acts of the Parliament of Canada. Many of these Acts have had one or more amending Acts.
1867 – 1899
* ''Aliens and Naturalization Act'', 1868
* ''Fisheries Act'', 1868
* ''Gradual Enfranchisem ...
References
{{reflist, 30em
External links
Canadian Department of Justice - Bank ActBank Actat
The Canadian Encyclopedia
''The Canadian Encyclopedia'' (TCE; french: L'Encyclopédie canadienne) is the national encyclopedia of Canada, published online by the Toronto-based historical organization Historica Canada, with the support of Canadian Heritage.
Available fo ...
Financial regulation in Canada
Canadian federal legislation
Banking in Canada
1991 in Canadian law
Banking legislation
1871 in Canadian law