Guidelines

Section B: Registration, Administration and Reporting

10 Amalgamation of Lenders

Lenders must advise the CSBFP Directorate in writing before the amalgamation date. Upon amalgamation, all loans made and claims paid in respect of the amalgamating lenders cease to exist and are deemed to have been made by the new lender, and:

• if the amount already paid to the amalgamating lenders is greater than the Minister's liability to the new lender, the liability of the Minister will be deemed to be equal to the amount of claims for loss already paid;
• The Minister's liability will continue to the new lender at the percentage (90%/50%/10% for loans made before April 1, 2009 or 90%/50%/12% for loans made on or after April 1, 2009) corresponding to the total loans considered to be made by the new lender (See Item 15 of this Section).

Regs s.31; Bulletin – April 2007

Example: Loans made by Lender A total $350,000; loans made by Lender B total $1,650,000. Upon amalgamation, the total of the loans considered to be made will be $2,000,000 and the Minister's liability for the new lender will be calculated on this amount.

If the Minister is notified after the date the amalgamation has taken place (according to the certificate of amalgamation) and claims have been paid after amalgamation but during the period before notification, any claims paid in excess of the Minister's liability to the amalgamating lenders, as of the date of amalgamation, must be reimbursed to the Minister.