D. The Canadian Bankers Association

• Author: M.H. Ogilvie
• Profession: LSM, B.A., LL.B., M.A., D.Phil., D.D., F.R.S.C. Of the Bars of Ontario and Nova Scotia Chancellor's Professor and Professor of Law, Carleton University
• Pages: 52-53

Page 52

Although a non-governmental organization, rather than a government body or agency, the Canadian Bankers Association (CBA) has historically played an important role in banking in Canada and continues to do so. The CBA began as a voluntary association in 1891 to promote the common interests of the banking community by monitoring banking legislation, lobbying for legislation, organizing professional courses, and publishing journals and other materials of interest to bankers.¹⁵⁰

The CBA was incorporated in 1900 by Parliament.¹⁵¹

From an external banking system perspective, the most important role of the CBA from its earliest days was the development of a national, paper-based clearing and settlement system. By 1897 clearing houses existed in Saint John, Halifax, Montreal, Toronto, Hamilton, and Winnipeg, and others were subsequently established as Canada spread westward. The CBA also administered the Bank Circulation Redemption Fund, established by the 1890 Bank Act, to redeem the banknotes of failed banks.

The CBA Act requires that all banks to which the Bank Act applies be members.¹⁵²

The Act also makes provision for bank officers to be

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"associates" for as long as they are bank officers.¹⁵³

The Act provides for the usual governance framework of such organizations, for officers,¹⁵⁴ annual general meetings,¹⁵⁵an executive council,¹⁵⁶voting,¹⁵⁷by-laws,¹⁵⁸and dues.¹⁵⁹

The 1900 Act also granted the CBA a monopoly to run a clearing system that any bank might voluntarily join or withdraw from at any time.¹⁶⁰

All banks had an equal voice in making the clearing rules, whether or not they joined the clearing system.¹⁶¹

Prior to taking effect, the rules required Treasury Board approval.¹⁶²

This monopoly ended in 1980, when the Canadian Payments Association was incorporated for the purpose of running the national clearing and settlement system. The transition occurred in 1983, and since that time, the Canadian Payments Association has operated the national system.¹⁶³

The CBA continues to be an important organization for Canadian banks and banking by sponsoring educational programs for bankers,¹⁶⁴ conducting research on banking matters generally, brokering agreements among banks for the introduction of new banking practices and services, representing Canadian banking interests internationally in organizations such as the United Nations Commission on International Trade Law (UNCITRAL) and the Society for Worldwide Interbank Financial...