Office of Public Sector Information
(1)A credit union may take deposits F1. . .from a person who is under the age at which, by virtue of section 20 of the 1965 Act, he may become a member of the credit union F1. . .
F2(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1Words in s. 9(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(6)(a)
F2S. 9(2)-(5) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(6)(b)
(1)A credit union may borrow money F1. . ..
F2(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1Words in s. 10(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(7)(a)
F2S. 10(2)-(6) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(7)(b)
[F1(1)A credit union may make to a member a loan, upon such security (or without security) and terms as the rules of the credit union may provide.]
F2(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3)F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F4(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(5)A credit union may charge interest on loans made by it but such interest shall be at a rate not exceeding one per cent. per month, or such other rate as may from time to time be specified, on the amount of the loan outstanding and such interest shall be inclusive of all administrative and other expenses incurred in connection with the making of the loan.
F2(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(7)In this section “specified" means specified by order made by the F5. . . Treasury.
F1S. 11(1) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(8)(a)
F2S. 11(2)(6) repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 22, Sch. 22; S.I. 2001/3538, art. 2(5)
F3S. 11(3) repealed (1.9.1996) by S.I. 1996/1189, art. 6(a)
F4S. 11(4) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(8)(b)
F5Words in s. 11(7) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1)(2), Sch. 3 Pt. IV para. 273, Sch. 4 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
C1S. 11(7): Functions of the chief registrar transferred to the Treasury (1.12.2001) by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. I (with art. 5); S.I. 2001/3538, art. 2(1)
(1)This section applies where—
(a)a credit union makes a loan to a member of the credit union, and
(b)at the time the loan is made, the member’s paid-up shareholding in the credit union is equal to or greater than his total liability (including contingent liability) to the credit union, whether as borrower, guarantor or otherwise.
(2)On the application of the member to the credit union, the loan shall be treated for the purposes of this Act as a secured loan.]
F1S. 11B repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 23, Sch. 22; S.I. 2001/3538, art. 2(5)
F1S. 11C repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 23, Sch. 22; S.I. 2001/3538, art. 2(5)
F1S. 11D repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 23, Sch. 22; S.I. 2001/3538, art. 2(5)
(1)A credit union may hold, purchase or take on lease in its own name any land for the purpose of conducting its business thereon but, subject to subsection (3) below, for no other purpose, and may sell, exchange, mortgage or lease any such land, and erect, alter or pull down buildings on it.
(2)In the application of subsection (1) above to Scotland—
(a)for the word “exchange" there shall be substituted the word “excamb"”, and
(b)for the word “mortgage" there shall be substituted the words “grant a heritable security over"”.
(3)A credit union shall have power to hold any interest in land so far as is necessary for the purpose of making loans to its members on the security of an interest in land and of enforcing any such security.
F1(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)No person shall be bound to inquire as to the authority for any dealing with land by a credit union; and the receipt of a credit union shall be a discharge for all moneys arising from or in connection with any dealing with land by it.
F1S. 12(4)(5) repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 24, Sch. 22; S.I. 2001/3538, art. 2(5)
F1S. 13 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(9)
F1(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4)The dividend payable on any shares of a credit union shall not exceed a rate of 8 per cent. per annum or such other rate as may from time to time by specified by order made by the F3. . . Treasury.
F2(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F2(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1S. 14(1)(7) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(10)
F2S. 14(2)(3)(5)(6) repealed (2.7.2002) by 2000 c. 8, ss. 338(4), 432(3), Sch. 18 Pt. V para. 25, Sch. 22; S.I. 2001/3538, art. 2(5)
F3Words in s. 14(4) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1)(2), Sch. 3 Pt. IV para. 278, Sch. 4 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
C1S. 14(4): functions of the chief registrar transferred to the Treasury (1.12.2001) by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. I (with art. 5); S.I. 2001/3538, art. 2(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1S. 15 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(11)
(1)Subject to the provisions of this section, a credit union, or any two or more credit unions, may enter into arrangements with a person carrying on the business of insurance for the purpose of making funds available to meet losses incurred by members of a credit union which is a party to the arrangements; and any two or more credit unions may enter into any other kind of arrangements for that purpose.
(2)Subject to subsection (3) below, a credit union shall have power to make contributions under arrangements made in accordance with subsection (1) above, and such arrangements may in particular provide for the vesting of a fund in trustees appointed under the arrangements.
(3)Arrangements under subsection (1) above shall not come into force and no contribution shall be made thereunder by a credit union, until they have been approved by the [F1Authority]; and the [F1Authority] shall not approve any such arrangements unless they provide that any variation of their terms shall also require [F2its] approval.
F1Words in s. 16(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 280(a) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F2Word in s. 16(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 280(b) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
(1)In relation to a credit union, the powers of the [F1Authority] under subsection (1) of section 48 of the 1965 Act to require the production of books, accounts and other documents and the furnishing of information in connection with the exercise of certain of [F2its] powers under that Act [F3shall apply also in connection with the exercise of its functions under this Act,] and F4. . . of section 48 of the 1965 Act (penalties and defraying expenses) shall apply accordingly;
(2)Without prejudice to section 39 of the 1965 Act (duty to furnish annual returns), the [F1Authority] may from time to time by notice in writing served on a credit union require it to furnish, within such period as may be specified in the notice, a financial statement or periodic financial statements in such form and containing such information as may be so specified.
(3)If a credit union fails without reasonable excuse to comply with a notice under subsection (2) above it shall be guilty of an offence and liable on summary conviction to a fine not exceeding [F5level 3 on the standard scale].
F1Words in s. 17(1)(2) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 281(a) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F2Word in s. 17(1) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 281(b)(i) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F3Words in s. 17(1) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 281(b)(ii) (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F4Words in s. 17(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(12)
F5Words 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
(1)Without prejudice to section 49 of the 1965 Act (appointment of inspector or calling of special meeting upon application of members of registered society), where the [F1Authority] is of the opinion that [F2, for reasons connected with the exercise of its functions under this Act or the 1965 Act,]an investigation should be held into the affairs of a credit union or that the affairs of the credit union call for consideration by a meeting of the members, [F3it may] appoint an inspector to investigate and report on the affairs of the credit union or may call a special meeting of the credit union, or may (either on the same or on different occasions) both appoint such an inspector and call such a meeting.
(2)All expenses of and incidental to an investigation or meeting held pursuant to subsection (1) above shall be defrayed out of the funds of the credit union, or by the members or officers or former members or officers of the credit union in such proportions as the [F1Authority] shall direct.
(3)Subsections (5) and (6) of the said section 49 (power to prescribe time and place of meeting, procedure, power to require evidence to be given, etc.) shall apply in relation to an inspector appointed or meeting called in accordance with this section.
F1Words in s. 18(1)(2) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 282 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F2Words in s. 18(1) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(13)
F3Words in s. 18(1) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 283 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F1S. 19 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(14) (with art. 6(1))
(1)In subsection (1) of section 16 of the 1965 Act (grounds for cancellation of registration) as it applies to credit unions—
(a)in paragraph (c)(i) the reference to violation of any of the provisions of the 1965 Act shall be construed as including a reference to violation of any of the provisions of this Act; and
(b)in paragraph (c)(ii) the reference to the fact that neither of the conditions in section 1(2) of that Act is fulfilled shall be construed as a reference to the fact that there is no longer a common bond between the members of a credit union;
and section 17(1) of that Act (suspension of registration on grounds which would justify cancellation) and section 18 of that Act (appeals) shall apply accordingly.
[F1(1A)The Authority may also exercise the power to cancel the registration of a credit union in accordance with section 16 of the 1965 Act where the credit union’s Part IV permission has been cancelled or where the Authority has given the credit union a warning notice under section 54(1) of the 2000 Act.
(1B)Cancellation of registration under section 16 of the 1965 Act by virtue of subsection (1A) may not take effect until the Authority has cancelled the credit union’s Part IV permission and there is no possibility (or no further possibility) of that determination of the Authority being reversed or varied.
(1C)In its application to credit unions, in subsection (4) of section 16 of the 1965 Act, the reference to the ground referred to in subsection (1)(c)(ii) shall include a reference to the ground mentioned in subsection (1A) of this section.
(1D)Section 18 of the 1965 Act does not apply in relation to a decision of the Authority to cancel the registration of a credit union by virtue of subsection (1A) of this section (and so a society may not appeal from a decision of the Authority to cancel its registration by virtue of subsection (1A)).]
(2)A petition for the winding up of a credit union may be presented to the court by the [F2Authority] if it appears to [F3the Authority] that—
(a)the credit union is unable to pay sums due and payable to its members, or is able to pay such sums only by obtaining further subscriptions for shares or by defaulting in its obligations to creditors; or
(b)there has been, in relation to that credit union, a failure to comply with any provision of, or of any direction given under, this Act or the Industrial and Provident Societies Acts 1965 to 1978; or
(c)there is no longer a common bond between the members of the credit union;
or in any other case where it appears to [F3the Authority] that the winding up of the credit union is in the public interest or is just and equitable having regard to the interests of all the members of the credit union.
F1S. 20(1A)-(1D) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(15)
F2Word in s. 20(2) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 282 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F3Words in s. 20(2) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 285 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
(1)In their application to credit unions, sections 50 and 51 of the 1965 Act (amalgamations of registered societies and transfers of engagements between them) shall have effect subject to the provisions of subsections (2) and (3) of this section.
(2)A credit union shall not amalgamate with or transfer its engagements to or accept a transfer of engagements from any registered society which is not a credit union.
(3)The [F1Authority] shall not register a special resolution under section 50 or section 51 of the 1965 Act if in [F2its] opinion—
(a)the proposed amalgamation or transfer of engagements would result in a contravention of any provision of this Act or of the Industrial and Provident Societies Acts 1965 to 1978 [F3or any requirement imposed by or under the 2000 Act]; or
(b)there would be no common bond between the members of the proposed amalgamated credit union or, as the case may be, the credit union which proposes to accept the transfer of engagements.
(4)In this Act the expression “non-qualifying member", in relation to an amalgamated credit union or a credit union which has accepted a transfer of engagements, includes a person who does not fulfil the qualifications for admission to membership of that credit union but became a member of it by virtue of the amalgamation or transfer of engagements, having been immediately before the amalgamation or transfer a non-qualifying member of one of the amalgamating credit unions or, as the case may be, the credit union from which the transfer of engagements was made.
F1Word in s. 21(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 282 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F2Word in s. 21(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 286 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F3Words in s. 21(3)(a) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(16)
Section 52 of the 1965 Act (conversion of registered society into company or amalgamation with, or transfer of engagements from registered society to, company) shall not apply to credit unions.
(1)In its application to the conversion of a company into a credit union, section 53 of the 1965 Act (conversion of company into registered society) shall have effect subject to the provisions of this section.
(2)In subsection (1) of that section the words from “and for this purpose" to the end (which refer to the Limitation on shareholdings applicable to societies other than credit unions) shall be omitted.
(3)A company shall not be registered as a credit union in accordance with that section unless the [F1Authority] is satisfied—
(a)that either there are no outstanding deposits by members with the company or that, in the case of every such outstanding deposit, the member concerned has consented in writing to the deposit being converted into an equivalent amount of shares in the credit union immediately upon the company being registered as a credit union; [F2and]
(b)that in no case does the nominal value of the company’s shares held by any member, together with the amount of any deposit of his which is to be converted as mentioned in paragraph (a) above, exceed the maximum shareholding for the time being permitted by section 5(3) above [F3any applicable rules made by the Authority under the 2000 Act] in the case of a member of a credit union; F4. . .
F5(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
F1Word in s. 23(3) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 282 (with art. 13(3)); S.I. 2001/3538, art. 2(1)
F2Word in s. 23(3)(a) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(17)(a)
F3Words in s. 23(3)(b) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(17)(b)
F4Word in s. 23(3)(b) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(17)(c)
F5S. 23(3)(c) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(17)(d)
Credit Unions Act 1979