Law360 Canada ( May 1, 2018, 8:38 AM EDT) -- Appeal by several credit unions from a declaration that their overdraft charges constituted interest as defined in s. 347 of the Criminal Code. The credit unions agreed to provide their members with banking and financial services. None of the account agreements required the credit unions to honour an overdraft, but all contemplated the possibility of overdraft requests happening as incidental to the nature of the other services the credit unions provided. Occasionally, members would tender a cheque or other instrument for an amount exceeding what they had on deposit, deliberately or inadvertently. Credit unions would then assess whether to permit an overdraft or reject the instrument due to insufficient funds. The clearing system operated by Credit Union Central was a time-sensitive, labour-intensive process. Accordingly, each credit union charged a fee ranging from five to 20 dollars to recover the costs incurred when assessing whether to permit an overdraft. Some credit unions charged an additional fee if the overdraft was rejected. The present class action alleged that credit unions charged members a criminal interest rate through charging the fees. On a summary trial application by the representative plaintiffs, the judge found that when the credit unions created or increased an overdraft by honouring a member’s overdraft request, it advanced credit to that member by loaning them the amount of the overdraft. As such, the fees met the definition of interest in the Code, unless they met the definition of overdraft charge by not exceeding five dollars. The judge declared that any overdraft charge exceeding five dollars constituted interest for the purpose of s. 347 of the Code....