Office of Public Sector Information
This version of this statute is extracted from the UK Statute Law Database (SLD). It is not necessarily in the form in which it was originally enacted but is a revised version, which means that any subsequent amendments to the text and other effects are incorporated with annotations.
There are effects on this legislation that have not yet been applied to SLD for the following years: 2003, 2004, 2005 and 2009. See the Tables of Legislative effects and the Update status of legislation page on the SLD website.
An Act to enable certain societies in Great Britain to be registered under the Industrial and Provident Societies Act 1965 as credit unions; to make further provision with respect to societies so registered; to make provision with respect to the taxation of societies so registered and of Northern Ireland credit unions; to enable reciprocal arrangements to be made in relation to Northern Ireland credit unions; to facilitate the amendment of the Industrial and Provident Societies Act (Northern Ireland) 1969; and for connected purposes.
[4th April 1979]
C1Act extended by Trustee Savings Banks Act 1985 (c. 58, SIF 110), s. 3, Sch. 1 Pt. III para. 11(2)(c)(3)
Act: power to transfer functions conferred (25.2.2001) by 2000 c. 8, ss. 338(1)(f), 339; S.I. 2001/516, art. 2(a), Sch. Pt. I
(1)Subject to [F1section 6(4)]below and to sections 2(1) and 7(1) of the Industrial and Provident Societies Act 1965 (in this Act referred to as “the M11965 Act"), a society may be registered under that Act if—
(a)it is shown to the satisfaction of the [F2Authority] that the conditions specified in subsection (2) below are fulfilled;
(b)the rules of the society comply with section 4(1) below; F3. . .
(c)the place which under those rules is to be the society’s registered office is situated in Great Britain;
[F4(d)the society has made an application to the Authority for Part IV permission under section 40 of the Financial Services and Markets Act 2000 (in this Act referred to as “the 2000 Act") to accept deposits; and
(e)the Authority is satisfied that, once registered under the 1965 Act, the society will satisfy, and continue to satisfy, the threshold conditions set out in Schedule 6 to the 2000 Act in relation to the regulated activity of accepting deposits;]
and a society which is so registered by virtue of this section shall be registered as, and is in this Act referred to as, a “credit union".
[F5(1A)The Authority shall not issue an acknowledgement of registration under section 2(3) of the 1965 Act to a credit union unless it also proposes to give that society permission under Part IV of the 2000 Act to accept deposits.
(1B)If the Authority issues an acknowledgment of registration to a credit union under that section, it shall determine any outstanding application of that credit union for permission under Part IV of the 2000 Act to accept deposits as soon as reasonably possible thereafter.]
(2)The conditions referred to in subsection (1)(a) above are—
(a)that the objects of the society are those, and only those, of a credit union; and
(b)that admission to membership of the society is restricted to persons all of whom fulfil a specific qualification which is stated in the rules and is appropriate to a credit union (whether or not any other qualifications are also required by the rules) and that in consequence a common bond exists between members of the society.
(3)The objects of a credit union are—
(a)the promotion of thrift among the members of the society by the accumulation of their savings;
(b)the creation of sources of credit for the benefit of the members of the society at a fair and reasonable rate of interest;
(c)the use and control of the members’ savings for their mutual benefit; and
(d)the training and education of the members in the wise use of money and in the management of their financial affairs.
(4)The qualifications for admission to membership which are appropriate to a credit union are—
(a)following a particular occupation;
(b)residing in a particular locality;
(c)being employed in a particular locality;
(d)being employed by a particular employer;
(e)being a member of a bona fide organisation or being otherwise associated with other members of the society for a purpose other than that of forming a society to be registered as a credit union;
[F6(f)residing in or being employed in a particular locality;]
and such other qualifications as are for the time being approved by the [F2Authority].
(5)In ascertaining whether a common bond exists between the members of a society, the [F2Authority]—
[F7(a)may, if [F8it] considers it proper in the circumstances of the case, treat as sufficient evidence of the existence of a common bond a statutory declaration which is given by three members and the secretary of the society, and is to the effect that a common bond exists,]
(b)may, if [F8it] considers it proper in the circumstances of the case, treat the fact that admission to membership is restricted as mentioned in subsection (2)(b) above as sufficient evidence of the existence of a common bond.
(6)For the purposes of this Act, if the rules of a credit union so provide, a person shall be treated as fulfilling a qualification for admission to membership stated in those rules if he is a member of the same household as, and is a relative of, another person who is a member of the credit union and fulfils that qualification directly.
F1Words in s. 1(1) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(2)(a)(i)
F2Words in s. 1(1)(4)(5) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 265(a) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F3Word in s. 1(1)(b) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(2)(a)(ii)
F4S. 1(1)(d)(e) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(2)(a)(iii)
F5S. 1(1A)(1B) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(2)(b)
F6S. 1(4)(f) inserted (1.9.1996) by S.I. 1996/1189 arts. 1, 3(2)
F7S. 1(5)(a) substituted (1.9.1996) by S.I. 1996/1189 arts. 1, 3(3)
F8Words in s. 1(5) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 265(b) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
M11965 c. 12.
(1)Section 1 of, and Schedule 1 to, the 1965 Act (societies which may be registered and matters to be provided for in their rules) [F1and section 7(3) of that Act (acceptance of certain deposits not to be treated as carrying on the business of banking)]shall not apply in relation to registration as a credit union.
(2)In section 2(3) of the 1965 Act (acknowledgement of registration) as it applies to registration as a credit union the reference to compliance with the provisions of the 1965 Act shall be construed, subject to subsection (1) above, as a reference to compliance with the provisions as to registration of both that Act and this Act.
(3)A society whose objects are wholly or substantially those of a credit union within the meaning of section 1(3) above shall not be registered under the 1965 Act otherwise than as a credit union and, except in the case of a registration made before the commencement of this Act, any such registration shall be void.
(4)A society which at the commencement of this Act is registered under the 1965 Act but whose objects are wholly or substantially those of a credit union within the meaning of section 1(3) above shall take all reasonable steps to have its existing registration cancelled and become registered as a credit union.
(5)Where in accordance with subsection (4) above a society’s existing registration is cancelled on its registration as a credit union, the society shall, notwithstanding anything in section 16(7) or section 3 of the 1965 Act, be taken for all purposes to be the same body corporate before and after the change of registration.
F2(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1Words in s. 2(1) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(3)
F2S. 2(6) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1)(2), Sch. 3 Pt. IV para. 266, Sch. 4 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
(1)The name of every society registered as a credit union shall contain the words “credit union" [F1or, if the rules of the society state that its registered office is to be in Wales, either those words or the words “undeb credyd" ].
(2)Subject to subsection (3) below, a person shall not, unless registered as a credit union,—
(a)use in reference to himself a name, title or descriptive expression containing the words “credit union" or [F2undeb credyd or] any cognate term or any derivative of those words; or
(b)represent himself as being a credit union;
and any person who contravenes this subsection shall be guilty of an offence and liable on summary conviction to a fine not exceeding [F3level 4 on the standard scale].
(3)Subsection (2) above does not apply to—
(a)the use by an officer or employee of a credit union of a title or descriptive expression indicating his office or post with the credit union; or
(b)the use with reference to an association or group of credit unions of a name which has been approved in writing by the [F4Authority].
(4)For the purposes of section 5(5) of the 1965 Act (societies which may be permitted to have a name which does not contain the word “limited") the objects of a credit union shall not be regarded as wholly charitable or benevolent.
F1Words in s. 3(1) added (21.12.1993) by 1993 c. 38, ss. 29(2), 36(1).
F2Words in s. 3(2) inserted (21.12.1993) by 1993 c. 38, ss. 29(3), 36(1).
F3Words substituted by virtue of (E.W.) Criminal Justice Act 1982 (c. 48, SIF 39:1), s. 46 and (S.) Criminal Procedure (Scotland) Act 1975 (c. 21, SIF 39:1), s. 289G
F4Word in s. 3(3)(b) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 267 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
(1)The rules of a credit union shall be in such form as the [F1Authority] may determine and shall contain—
(a)provision with respect to the matters mentioned in Schedule 1 to this Act; and
(b)such additional provision as the [F1Authority] may determine.
(2)The rules of a credit union may not be amended except by a resolution passed by not less than two-thirds of the members present at a general meeting called for the purpose after the giving of such notice as is by the rules required for such a resolution.
(3)In section 10(3) of the 1965 Act (acknowledgement of registration of amendment of rules where not contrary to the Act) as it applies to credit unions the reference to the 1965 Act shall be construed as including a reference to this Act.
F2(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)Section 11 of the 1965 Act (power to make rules as to fund for purchase of government securities) shall not apply to credit unions.
F1Words in s. 4(1) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 268 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F2S. 4(4) repealed (3.7.2002) by S.I. 2002/1555, art. 7(2)
(1)Only individuals shall be members of a credit union.
(2)A person shall not be a member of a credit union unless he holds at least one fully paid-up share in that credit union, but the rules of the credit union shall not require a person to hold more than £5 in fully paid-up shares as a condition of membership.
F1(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(4A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)A member of a credit union who ceases to fulfil the qualifications for admission to membership shall be entitled, subject to subsection (6) below, to retain his membership unless the rules of the credit union provide otherwise; and, subject to section 21(4) below, in this Act the expression “non-qualifying member", in relation to a credit union, means a person who remains a member of the credit union by virtue of this sub-section.
(6)The number of non-qualifying members of a credit union shall not at any time exceed ten per cent. of the total membership of the credit union.
(7)Non-qualifying members of a credit union shall be left out of account in determining for any purpose whether a common bond exists between the members of the credit union.
(8)A non-qualifying member of a credit union shall be entitled, except so far as the rules of the credit union may provide otherwise, to purchase shares and F2. . . , to receive loans.
(9)Subject to any provision in the rules of a credit union as to voting by a chairman who has a casting vote, on every matter which is determined by a vote of members of a credit union every member shall be entitled to vote and shall have one vote only.
F1(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1S. 5(3)(4)(4A)(10) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(4)
F2Words in s. 5(8) repealed (1.9.1996) by S.I. 1996/1189, art. 6(b)
(1)The minimum number of members of a credit union shall be twenty-one and, accordingly, in the following provisions, namely—
(a)section 2(1) of the 1965 Act, as it applies to registration as a credit union and to an application therefor,
(b)section 16(1)(a)(i) of that Act, as it applies to the cancellation of such a registration,
(c)section 53(2) of that Act, as it applies to the conversion of a company into a credit union, and
(d)[F1section][F2122(1)(e) of the Insolvency Act 1986] as it applies by virtue of section 55(a) of the 1965 Act to the presentation of a petition for winding up a credit union,
for the word [F3three][F4(or, in the case of section [F5122(1)(e) of the Act of 1986], for the word “two")] there shall be substituted the words “twenty-one"”.
F6(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F6(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1Word substituted by virtue of Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), s. 30, Sch. 2
F2Words substituted by virtue of Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), s. 30, Sch. 2 and Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14
F3Word in S. 6(1) substituted (1.9.1996) by S.I. 1996/1738 arts. 1, 3(2)(b)
F4Words inserted by virtue of Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), s. 30, Sch. 2
F5Words substituted by Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14
F6S. 6(2)-(6) repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 21, Sch. 22; S.I. 2001/3538, art. 2(5)
(1)All shares in a credit union shall be of £1 denomination and may, subject to the rules of the credit union, be subscribed for either in full or by periodical or other subscriptions but no share shall be allotted to a member until it has been fully paid in cash.
(2)Shares in a credit union shall not be transferable and a credit union shall not issue to a member a certificate denoting ownership of a share.
(3)Nothing in subsection (2) above shall affect the operation of section 24(1) of the 1965 Act (transfer in pursuance of nomination on death of nominator).
(4)Subject to subsection (5) below, shares in a credit union shall be withdrawable but a credit union shall not issue shares except on terms enabling it to require not less than sixty days’ notice of withdrawal.
(5)If a withdrawal of shares would reduce a member’s paid-up shareholding in the credit union to less than his total liability (including contingent liability) to the credit union whether as borrower, guarantor or otherwise, then—
[F1(a)in the case of a member to whom there is a loan by the credit union which is treated by virtue of section 11A below as a secured loan, the withdrawal shall not be permitted;]
(b)in any other case the withdrawal shall be permitted only at the discretion of the committee.
(1)Subject to sections 9 and 10 below, a credit union shall not accept a deposit from any person except by way of subscription for its shares.
F1(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1S. 8(2)(4)(5) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(5)
Credit Unions Act 1979