Canada Gazette, Part I, Volume 146, Number 27: By-law Amending Certain By-laws Made Under the Canadian Payments Act

July 7, 2012

Statutory authority

Canadian Payments Act

Sponsoring department

Department of Finance


(This statement is not part of the By-law.)

Issue and objectives

The Canadian Payments Association (CPA) is a not-for-profit organization that is responsible for establishing and operating national clearing and settlement payments systems and facilitating the interaction of its payments systems with other systems involved in the exchange, settlement and clearing of payments. The CPA is also responsible for developing rules that apply to its member institutions which ensure the safety, soundness and efficiency of the payments systems.

Canadian Payments Association by-laws are made by the CPA Board of Directors and set out rules relating to the requirements for membership in the CPA; the payment of fees and dues of members; the payment of penalties related to the failure to comply with the by-laws, rules and orders of the CPA; the exchange, clearing and settlement of payment items; the authenticity and integrity of payment items and messages; and limiting the liability of the CPA and its members for any loss or damage suffered by a member. CPA by-laws require the approval of the Minister of Finance and must be published in the Canada Gazette.

To promote the continued growth and competitiveness of the financial sector, the Government has introduced a legislative framework to enable large credit unions to continue their operations as federal entities, known as federal credit unions (FCU). Consequential to the legislative framework, amendments to CPA by-laws and regulations will be required to enable the FCU framework. Amendments to CPA regulations are on a separate track and are made by the Governor in Council.

Description and rationale

The amendment to By-law No. 1 (General) is a technical change to mirror recent amendments to paragraphs 9(3)(a) and (b) of the Canadian Payments Act, which require FCUs to participate in the governance of the CPA as part of the cooperatives class. Specifically, this amendment provides that FCUs will participate within the cooperatives class for the purpose of selection of board members to the CPA finance committee.

The amendment to By-law No. 3 (Payment Items and Automated Clearing Settlement System) would provide FCUs with the option of belonging to a group (a collection of financial institutions that bind themselves together through a group clearing arrangement [GCA]), wherein its payment items would be cleared by a group clearer.

The credit union system GCA under the CPA framework provides credit unions access to the payments system. Payment item clearing is a volume-driven business. By aggregating volumes through a clearing group, the over 400 credit unions participating through the GCA have been able to collectively attain the scale necessary to justify taking on the obligations and substantial infrastructure investments required for direct participation in the CPA.

There are no cost implications to these changes. However, those credit unions that choose to continue as federal credit unions would be required to meet the regulatory and compliance requirements under the federal regime.


Throughout the development of the proposed by-laws, the Department of Finance consulted with key stakeholders in the credit union system, including provincial governments, individual credit unions, provincial credit union centrals, national centrals, federal agencies, and financial sector associations, including the Canadian Payments Association. The credit union system provided feedback on the proposed policy regarding the requirements for a FCU to participate in a group and some changes were made to provide further clarity.

Implementation, enforcement and service standards

The regulatory framework for federal credit unions is being implemented primarily under the Bank Act. The CPA Board of Directors has the authority to make by-laws pursuant to section 18 of the Canadian Payments Act. The CPA will be responsible for ensuring that its member institutions comply with the proposed amendments. The proposed amendments do not require any new mechanisms to ensure compliance and enforcement.


Lynn Hemmings
Senior Chief
Department of Finance
L’Esplanade Laurier, 20th Floor
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
Telephone: 613-992-0553
Fax: 613-943-8436


Notice is hereby given that the Board of Directors of the Canadian Payments Association, pursuant to subsection 18(1) (see footnote a) of the Canadian Payments Act (see footnote b), proposes to make the annexed By-law Amending Certain By-laws Made Under the Canadian Payments Act.

Interested persons may make representations concerning the proposed By-law within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part Ⅰ, and the date of publication of this notice, and be addressed to Lynn Hemmings, Senior Chief, Payments and Pensions, Department of Finance, L’Esplanade Laurier, 20th floor, 140 O’Connor Street, Ottawa, Ontario K1A 0G5 (tel.: 613-992-0553; fax: 613-943-8436; email:

Ottawa, May 23, 2012

Minister of Finance



1. Paragraphs 30(2)(c) and (d) of the Canadian Payments Association By-law No. 1 — General (see footnote 1) are replaced by the following:

  • (c) no more than three members representing the class of members described in paragraph 9(3)(a) of the Act;
  • (d) no more than one member representing the class of members described in paragraph 9(3)(b) of the Act; and


2. Paragraph 28(1)(a) of the Canadian Payments Association By-law No. 3 — Payment Items and Automated Clearing Settlement System (see footnote 2) is replaced by the following:

  • (a) a central or cooperative credit association that has been appointed to be the group clearer and one or more of the following, including any combination of them:
    • (i) centrals,
    • (ii) cooperative credit associations,
    • (iii) federal credit unions,
    • (iv) locals that belong to the group clearer, or
    • (v) locals that belong to another central or cooperative credit association if that central or cooperative credit association is also a member of the group; or


3. This By-law comes into force on the day on which section 207 of the Financial System Review Act, chapter 5 of the Statutes of Canada, 2012, comes into force, but if it is registered after that day, it comes into force on the day on which it is registered.