Credit Unions Act 1979

Registration as a credit union E+W+S

1 Registration under the Industrial and Provident Societies Act 1965. E+W+S

(1) Subject to [F1 section 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 “the1965 Act”), a society may be registered under that Act if—

(a) it is shown to the satisfaction of the [F2 FCA] 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 [F5 for permission under Part 4A ] of the Financial Services and Markets Act 2000 (in this Act referred to as “the 2000 Act") to accept deposits; F6 ... ]

[F7 (e) the FCA is satisfied that, once registered under the 1965 Act, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which the FCA is responsible in relation to the regulated activity of accepting deposits; and

(f) the PRA is satisfied that, once registered under the 1965 Act, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which the PRA is responsible 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".

[F8 (1A) The PRA must notify the FCA if it is satisfied as mentioned in paragraph (f) of subsection (1).

(1B) The FCA must not issue an acknowledgement of registration under section 2(3) of the 1965 Act to a credit union unless—

(a) if the FCA is the appropriate regulator (within the meaning of section 55A of the 2000 Act), it proposes to give that society permission under Part 4A of the 2000 Act to accept deposits;

(b) if the PRA is the appropriate regulator (within the meaning of section 55A of the 2000 Act), the PRA proposes to give that society permission under Part 4A of the 2000 Act to accept deposits.

(1C) The PRA must notify the FCA if it proposes to give that society permission under Part 4A of the 2000 Act to accept deposits.

(1D) If the FCA issues an acknowledgement of registration to a credit union under that section, the appropriate regulator (within the meaning of section 55A of the 2000 Act) must determine any outstanding application of that credit union for permission under Part 4A 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

[F9 (b) that the requirements of section 1A (common bonds appropriate to a credit union) and, where applicable, section 1B (further requirements where common bond relates to locality) are met.]

(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.

[F10 (3ZA) In subsection (3) above references to members do not include corporate members. ]  

F11 (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11 (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1 Words in s. 1(1) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(2)(a)(i)

F2 Word in s. 1(1)(a) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 2(2)(a) (with Sch. 12)

F3 Word in s. 1(1)(b) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(2)(a)(ii)

F4 S. 1(1)(d)(e) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(2)(a)(iii)

F5 Words in s. 1(1)(d) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 2(2)(b) (with Sch. 12)

F6 Word in s. 1(1)(d) omitted (1.4.2013) by virtue of The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 2(2)(c) (with Sch. 12)

F7 S. 1(1)(e)(f) substituted (1.4.2013) for s. 1(1)(e) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 2(2)(d) (with Sch. 12)

F8 S. 1(1A)-(1D) substituted (1.4.2013) for s. 1(1A)(1B) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 2(3) (with Sch. 12)

F9 S. 1(2)(b) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 12(2) (with arts. 24, 25, 26)

F10 S. 1(3ZA) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 12(3) (with arts. 24, 25, 26)

F11 S. 1(3A)-(6) omitted (8.1.2012) by virtue of The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 12(4) (with arts. 24, 25, 26)

[F12 1A. Common bonds appropriate to a credit union E+W+S

(1) Under the rules of the society admission to membership must be restricted to persons who fall within one or more common bonds appropriate to a credit union (whether or not any other qualifications for admission to membership are required under the rules).

(2) The common bonds appropriate to a credit union are—

(a) following a particular occupation;

(b) being employed by a particular employer;

(c) residing or being employed in a particular locality;

(d) 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;

(e) any other common bond for the time being approved by the [F13 FCA].

(3) If the rules of a credit union so provide, a person who is a member of the same household as, and is a relative of, another person who is a member of the credit union and falls directly within a common bond is treated as also falling within that common bond.

(4) For the purposes of this section, a body corporate or a person applying for membership in his capacity as a partner in a partnership or an officer or member of the governing body of an unincorporated association—

(a) falls within the common bond specified in paragraph (a) of subsection (2) if the principal business of the body corporate, partnership or unincorporated association—

(i) requires it to employ or otherwise engage persons who follow that occupation, or

(ii) relates to that occupation in some other way;

(b) falls within the common bond specified in paragraph (b) of that subsection if the body corporate, partnership or unincorporated association—

(i) employs the persons who qualify for membership under that common bond, or

(ii) provides services, or is otherwise related, to that employer;

(c) falls within the common bond specified in paragraph (c) of that subsection if the body corporate, partnership or unincorporated association has a place of business in, or other significant connection with, that locality; and

(d) falls within the common bond specified in paragraph (d) of that subsection if the body corporate, partnership or unincorporated association is a member of a bona fide organisation or otherwise associated with other members of the society for the purpose specified in that paragraph.

(5) The [F14 FCA] may accept as sufficient evidence that the requirement of this section is met a statutory declaration to that effect given by three members and the secretary of the society.

Textual Amendments

F12 Ss. 1A, 1B inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 13 (with arts. 24, 25, 26)

F13 Word in s. 1A(2)(e) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 3 (with Sch. 12)

F14 Word in s. 1A(5) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 3 (with Sch. 12)

1B. Further requirements where common bond relates to locality E+W+S

(1) The requirements of this section must be met where—

(a) the rules of a society provide for one or more common bonds involving a connection with a locality, or

(b) the rules of a society provide for one or more common bonds of such other description as may be specified.

(2) The requirements are—

(a) that the conditions in subsection (3) are met, or

(b) that extraordinary circumstances exist justifying registration of the society as a credit union.

(3) The conditions are—

(a) that the number of potential members of the society does not exceed two million or such higher figure as may be specified; and

(b) that it is reasonably practicable for every potential member to participate in votes of the society, serve on the society’s committee and have access to all the services offered by the society.

(4) The [F15 FCA] may accept as sufficient evidence that the conditions in subsection (3) are met a statutory declaration to that effect given by three members and the secretary of the society.

(5) In this section “specified” means specified by order made by the Treasury.]

Textual Amendments

F12 Ss. 1A, 1B inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 13 (with arts. 24, 25, 26)

F15 Word in s. 1B(4) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 4 (with Sch. 12)

2 Supplementary and transitional provisions as to registration. E+W+S

(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) [F16 and 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.

F17 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F16 Words in s. 2(1) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(3)

F17 S. 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)

3 Use of name “credit union", etc. E+W+S

(1) The name of every society registered as a credit union shall contain the words “credit union"[F18 or, 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 [F19 undeb 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 [F20 level 4 on the standard scale].

[F21 ( 3 ) Subsection (2) above does not apply to—

(a) the use, in reference to itself, of a name, title or descriptive expression by any body corporate which falls within subsection (3A) below;

(b) the use by any person or unincorporated association with reference to himself (or itself) of a name which has been approved in writing by the [F22 FCA]; or

(c) the use by any officer or employee of—

(i) a credit union,

(ii) a body corporate which falls within subsection (3A) below, or

(iii) a person or association which has obtained approval under paragraph (b) above,

of a title or descriptive expression indicating his office or post with that credit union, body, person or association.]

[F23 (3A) A body corporate falls within this subsection if its head office is not in England, Wales or Scotland and it—

(a) has [F24 permission under Part 4A of the 2000 Act] to accept deposits;

(b) is exempt from the prohibition imposed by section 19 of that Act in respect of accepting deposits;

(c) has permission under that Act to accept deposits by virtue of qualifying for authorisation under Schedule 3 or 4 to that Act; or

(d) is subject to legal provisions that are similar to the relevant provisions.

(3B) For the purposes of subsection (3A)(d) above, a body corporate is to be treated as being subject to legal provisions that are similar to the relevant provisions if it is subject to legal provisions which—

(a) provide that the main activities carried on by the body are accepting deposits from, and lending money to, persons who are members or shareholders of the body;

(b) require the body to obtain authorisation or approval before it commences business;

(c) require the members and shareholders of the body to be linked by reference to some common chracteristic or circumstance; and

(d) provide that those from whom the body accepts deposits must be shareholders or members of the body (although the legal provisions may allow for some exceptions to this proposition).

(3C) In determining, for the purposes of subsection (3A)(d) above, whether a body corporate is subject to legal provisions that are similar to the relevant provisions, regard must be had as to whether the legal provisions to which it is subject require the body to obtain authorisation or approval before it commences business and whether those provisions—

(a) impose limits on the objects which the body may or must have,

(b) impose limits on the membership of the body,

(c) impose restrictions on the kind of activities which the body may carry on,

(d) impose limits or conditions on the body’s ability to accept deposits,

(e) impose limits on the value of the shares which any one shareholder may have in the body,

(f) impose limits on the body’s ability to lend money,

which are similar to those imposed by the relevant provisions.

(3D) In this section—

(a) “legal provisions” includes laws, regulations and administrative provisions;

(b) “relevant provisions” means—

(i) the provisions of this Act; and

(ii) any provision of or made under the 1965 Act or the 2000 Act so far as it relates to credit unions.]

(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.

Textual Amendments

F18 Words in s. 3(1) added (21.12.1993) by 1993 c. 38, ss. 29(2), 36(1).

F19 Words in s. 3(2) inserted (21.12.1993) by 1993 c. 38, ss. 29(3), 36(1).

F20 Words 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

F21 S. 3(3) substituted (13.2.2003) by Regulatory Reform (Credit Unions) Order 2003 (S.I. 2003/256), arts. 1, 4(2)

F22 Word in s. 3(3)(b) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 5(2) (with Sch. 12)

F23 S. 3(3A)-(3D) inserted (13.2.2003) by Regulatory Reform (Credit Unions) Order 2003 (S.I. 2003/256), arts. 1, 4(3)

F24 Words in s. 3(3A)(a) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 5(3) (with Sch. 12)

Commencement Information

I1 S. 3(2)(3) in force at 1.9.2003 by S.I. 2003/306, art. 2

Rules and membership E+W+S

4 Rules. E+W+S

(1) The rules of a credit union shall be in such form as the [F25 FCA] 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 [F25 FCA] may determine.

[F26 (1A) The FCA must consult the PRA before determining any provision under subsection (1)(b) which relates to credit unions which are PRA-authorised persons.]

(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.

F27 (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.

Textual Amendments

F25 Word in s. 4(1) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 6(2) (with Sch. 12)

F26 S. 4(1A) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 6(3) (with Sch. 12)

F27 S. 4(4) repealed (3.7.2002) by S.I. 2002/1555, art. 7(2)

5 Membership and voting rights. E+W+S

F28 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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.

F29 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F29 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F29 (4A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) A member of a credit union who [F30 ceases to fall within a common bond and as a result would not qualify 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; andF31 ... 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.

F32 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) Non-qualifying members of a credit union shall be left out of account in determining for any purpose [F33 whether the requirements of section 1B are met].

(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 andF34 ..., 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.

F29 (10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F28 S. 5(1) omitted (8.1.2012) by virtue of The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(1) (with arts. 25, 26)

F29 S. 5(3)(4)(4A)(10) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(4)

F30 Words in s. 5(5) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 14(1)(a) (with arts. 25, 26)

F31 Words in s. 5(5) omitted (8.1.2012) by virtue of The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 16(a) (with arts. 25, 26)

F32 S. 5(6) omitted (8.1.2012) by virtue of The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 16(b) (with arts. 25, 26)

F33 Words in s. 5(7) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 14(1)(b) (with arts. 25, 26)

F34 Words in s. 5(8) repealed (1.9.1996) by S.I. 1996/1189, art. 6(b)

[F35 5A. Corporate members E+W+S

(1) A credit union may admit bodies corporate as members if its rules so provide.

(2) The number of corporate members of a credit union shall not at any time exceed ten per cent of the total number of members of the credit union or such higher percentage as may be specified.

(3) The number of shares allotted to corporate members of a credit union shall not at any time exceed twenty-five per cent of the total shares allotted to all members of the credit union or such higher percentage as may be specified.

(4) For the purpose of subsection (3) above, the total shares allotted to all members of the credit union shall be that found in the most recent year-end balance sheet submitted to the [F36 appropriate authority].

(5) In this section—

(a) “specified” means specified by order made by the Treasury;

(b) “shares” means shares other than deferred shares.

(6) In this Act “corporate member”, in relation to a credit union, means—

(a) a body corporate which is a member of the credit union;

(b) an individual who is a member of the credit union in his capacity as a partner in a partnership; or

(c) an individual who is a member of the credit union in his capacity as an officer or member of the governing body of an unincorporated association.]

Textual Amendments

F35 S. 5A inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(2) (with arts. 25, 26)

F36 Words in s. 5A(4) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 7 (with Sch. 12)

6 Minimum and maximum number of members. E+W+S

(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) [F37 section][F38 122(1)(e) of the Insolvency Act 1986] as it applies by virtue of [F39 section 55(1)(a)] of the 1965 Act to the presentation of a petition for winding up a credit union,

for the word [F40 three][F41 (or, in the case of section [F42 122(1)(e) of the Act of 1986], for the word “two")] there shall be substituted the words “ twenty-one" ”.

F43 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F43 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F43 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F43 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F43 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F37 Word substituted by virtue of Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), s. 30, Sch. 2

F38 Words 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

F39 Words in s. 6(1)(d) substituted (1.10.2009) by The Companies Act 2006 (Consequential Amendments, Transitional Provisions and Savings) Order 2009 (S.I. 2009/1941), art. 1(2), Sch. 1 para. 40 (with art. 10)

F40 Word in S. 6(1) substituted (1.9.1996) by S.I. 1996/1738 arts. 1, 3(2)(b)

F41 Words inserted by virtue of Companies Consolidation (Consequential Provisions) Act 1985 (c. 9, SIF 27), s. 30, Sch. 2

F42 Words substituted by Insolvency Act 1986 (c. 45, SIF 66), s. 439(2), Sch. 14

F43 S. 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)

Operation of credit union E+W+S

7 Shares. E+W+S

(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 [F44 , other than deferred shares,] 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) [F45 and section 11(1C)] below, shares in a credit union [F46 , other than deferred shares,] 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.

[F47 (5) Where a credit union has made a loan to a member which is treated by virtue of section 11A(2) below as a secured loan, the member shall not be permitted to withdraw shares where his paid-up shareholding, excluding any deferred shares, in the credit union is, or following the withdrawal would be, less than his total liability (including contingent liability) to the credit union whether as borrower, guarantor or otherwise.]

[F48 (6) If deferred shares are subscribed for in full, the credit union shall transfer a sum equal to the amount paid on those shares to its reserves.]

Textual Amendments

F44 Words in s. 7(2) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 17(1)(a) (with arts. 25, 26)

F45 Words in s. 7(4) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 18(1)(a) (with arts. 25, 26)

F46 Words in s. 7(4) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 17(1)(b) (with arts. 25, 26)

F47 S. 7(5) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 18(1)(b) (with arts. 25, 26, 27)

F48 S. 7(6) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 17(1)(c) (with arts. 25, 26)

[F49 7A. Power to issue interest-bearing shares E+W+S

(1) A credit union may issue interest-bearing shares if—

(a) its rules so provide;

(b) its most recent year end balance sheet shows that it holds reserves of at least £50,000 or five per cent of its total assets, whichever is greater;

(c) its auditors have made a report under section 9 of the Friendly and Industrial and Provident Societies Act 1968 on that balance sheet;

(d) it has submitted that balance sheet to the [F50 appropriate authority]; and

(e) it has submitted to the [F50 appropriate authority] a report by its auditors (post-dating the balance sheet referred to in paragraph (b) above), stating that in their opinion the credit union satisfies such conditions as are specified by the [F50 appropriate authority] for the purpose.

(2) A credit union which issues interest-bearing shares must submit to the [F50 appropriate authority] an annual report by the auditors appointed to audit its accounts and balance sheet fulfilling the requirements of paragraph (e) of subsection (1) above by the date specified by the [F50 appropriate authority] for the purpose.

(3) A credit union shall convert any interest-bearing shares in issue into shares which are not interest-bearing if—

(a) its rules no longer provide for the issue of interest-bearing shares;

(b) neither its most recent year end balance sheet nor the balance sheet immediately preceding it—

(i) shows that the credit union holds reserves of at least £50,000 or five per cent of its total assets, whichever is greater; or

(ii) has been submitted to the [F50 appropriate authority] by the date specified; or

(c) for two consecutive years it has not complied with subsection (2) above.

(4) The Treasury may by order provide for subsections (1)(b) and (3)(b)(i) above to have effect as if the references to £50,000 and five per cent were references to such other sum or percentage as they think appropriate.

(5) In this section “year end balance sheet” has the same meaning as in section 3A of the Friendly and Industrial and Provident Societies Act 1968.

(6) In this Act “interest-bearing share” means a share issued on terms which entitle the holder to interest but not to a dividend.]

Textual Amendments

F49 S. 7A inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 19(1) (with arts. 25, 26)

F50 Words in s. 7A substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 8 (with Sch. 12)

8 General prohibition on deposit-taking. E+W+S

(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.

F51 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F51 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F51 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F51 S. 8(2)(4)(5) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(5)

9 Deposits by persons too young to be members. E+W+S

(1) A credit union may take deposits F52 . . .from a person who is under the age at which, by virtue of [F53 any provision of the credit union’s rules], he may become a member of the credit union F52 . . .

F54 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F54 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F54 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F54 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F52 Words in s. 9(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(6)(a)

F53 Words in s. 9 substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 8(2) (with arts. 25, 26)

F54 S. 9(2)-(5) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(6)(b)

[F55 9A Power to charge for ancillary services E+W+S

(1) A credit union which provides an ancillary service to a member or any other person from whom the credit union has accepted a deposit may charge [F56 such fee as it considers appropriate for] providing that service.

(2) In this section, “ancillary service” means any service which is ancillary to the activity of accepting a deposit or making a loan, and includes—

(a) the making or receiving of payments, made by way of standing order, direct debit or any other means, as agent for a member or any other person from whom the credit union has accepted a deposit;

(b) issuing and administering means of payment (for example, chequebooks and debit cards);

(c) money transmission services;

(d) giving advice on the services specified by paragraphs (a) to (c) above.]

Textual Amendments

F55 S. 9A inserted (13.2.2003) by Regulatory Reform (Credit Unions) Order 2003 (S.I. 2003/256), arts. 1, 5

F56 Words in s. 9A(1) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 20 (with arts. 25, 26, 28)

10 Power to borrow money. E+W+S

(1) A credit union may borrow money F57 . . ..

F58 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F58 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F57 Words in s. 10(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(7)(a)

F58 S. 10(2)-(6) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(7)(b)

11 Loans. E+W+S

[F59 (1) [F60 Subject as follows,] 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.]

[F61 (1A) A credit union may only make a loan to a corporate member if—

(a) the credit union’s rules provide that it may make loans to corporate members, and

(b) making the loan would not result in the aggregate of the outstanding balances on loans made by the credit union to corporate members exceeding ten per cent of the aggregate of the outstanding balances on all loans made by the credit union to members, or such higher percentage as may be specified.]

[F62 (1B) Subsection (1) does not apply in relation to a member holding only deferred shares. ]  

[F63 (1C) Where a loan by a credit union is made to a member and is not a secured loan within the meaning of section 11A below, the terms of the loan must include provision as to whether, for the duration of the loan, the borrower is permitted to withdraw shares where his paid-up shareholding (excluding any deferred shares) in the credit union is, or following the withdrawal would be, less than his total liability (including contingent liability) to the credit union whether as borrower, guarantor or otherwise.]

F64 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F65 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F66 (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.

F64 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7) In this section “specified” means specified by order made by the F67 . . . Treasury.

Textual Amendments

F59 S. 11(1) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(8)(a)

F60 Words in s. 11(1) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(3)(a) (with arts. 25, 26)

F61 S. 11(1A) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(3)(b) (with arts. 25, 26)

F62 S. 11(1B) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 17(2) (with arts. 25, 26)

F63 S. 11(1C) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 18(2) (with arts. 25, 26)

F64 S. 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)

F65 S. 11(3) repealed (1.9.1996) by S.I. 1996/1189, art. 6(a)

F66 S. 11(4) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(8)(b)

F67 Words 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)

Modifications etc. (not altering text)

C1 S. 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)

[F68 11A Loans to be treated as secured E+W+S

(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[F69 , excluding any deferred shares,] 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.]

Textual Amendments

F68 S. 11A inserted (1.9.1996) by S.I. 1996/1189 arts. 1, 5

F69 Words in s. 11A(1)(b) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 17(3) (with arts. 25, 26)

F70 11B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F70 S. 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)

F71 11C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F71 S. 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)

F72 11D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F72 S. 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)

12 Power to hold land for limited purposes. E+W+S

(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.

F73 (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F73 (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.

Textual Amendments

F73 S. 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)

F74 13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F74 S. 13 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(9)

14 Computation and application of profits. E+W+S

F75 (1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76 (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F77 (4) The dividend payable on any shares of a credit union shall—

(a) on its dissolution, not exceed a rate of 8 per cent per annum or such other rate as may be specified by order made by the Treasury; and

(b) at any other time, not exceed that rate except to the extent that the rules of the credit union provide otherwise.]

F76 (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F76 (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F75 (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F75 S. 14(1)(7) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(10)

F76 S. 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)

F77 S. 14(4) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 21 (with arts. 25, 26)

Insurance and other arrangements E+W+S

F78 15 Insurance against fraud or other dishonesty. E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F78 S. 15 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(11)

16 Guarantee funds. E+W+S

(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 [F79 appropriate authority]; and the [F79 appropriate authority] shall not approve any such arrangements unless they provide that any variation of their terms shall also require [F80 its] approval.

Textual Amendments

F79 Words in s. 16(3) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 9 (with Sch. 12)

F80 Word 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)

Powers of [F81 FCA and PRA] E+W+S

Textual Amendments

F81 Words in s. 17 cross-heading substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 10 (with Sch. 12)

17 Power to require information. E+W+S

(1) In relation to a credit union, the powers of the [F82 FCA] 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 [F83 its] powers under that Act [F84 shall apply also in connection with the exercise of its functions under this Act,] and F85 . . . of section 48 of the 1965 Act (penalties and defraying expenses) shall apply accordingly;

[F86 (1A) The PRA may, in connection with the exercise of its functions under this Act, exercise in relation to a credit union the powers of the FCA 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, and subsections (2) and (3) 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 [F87 Authority] 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 [F88 level 3 on the standard scale].

Textual Amendments

F82 Word in s. 17(1) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 11(2) (with Sch. 12)

F83 Word 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)

F84 Words 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)

F85 Words in s. 17(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(12)

F86 S. 17(1A) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 11(3) (with Sch. 12)

F87 Words 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)

F88 Words 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

18 Power to appoint inspector and call meeting. E+W+S

(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 [F89 FCA or the PRA] is of the opinion that [F90 , 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, [F91 it 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 [F89 FCA or the PRA] 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.

[F92 (4) The FCA and the PRA must each notify the other before appointing an inspector or calling a meeting under subsection (1) in relation to a society which is a PRA -authorised person. ]

Textual Amendments

F89 Words in s. 18(1)(2) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 12(2) (with Sch. 12)

F90 Words in s. 18(1) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(13)

F91 Words 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)

F92 S. 18(4) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 12(3) (with Sch. 12)

F93 19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F93 S. 19 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(14) (with art. 6(1))

20 Cancellation or suspension of registration and petition for winding up. E+W+S

(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 [F94 the rules of a credit union provide for one or more common bonds involving a connection with a locality and the requirements of section 1B are no longer met];

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.

[F95 [F96 (1A) The FCA may also exercise the power to cancel the registration of a credit union under section 16 of the 1965 Act if the credit union’s permission under Part 4A of the 2000 Act has been cancelled or if the credit union has received a warning notice under section 55Z of the 2000 Act.

(1B) The FCA must not cancel the registration of a credit union under section 16 of the 1965 Act by virtue of subsection (1A) unless the appropriate regulator (within the meaning of section 55A of the 2000 Act) has cancelled the credit union’s permission under Part 4A of the 2000 Act and there is no possibility (or no further possibility) of that determination of the appropriate regulator 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 [F97 FCA] 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 [F97 FCA] to cancel its registration by virtue of subsection (1A)). ]

[F98 (1E) If the credit union is a PRA -authorised person, the FCA must consult the PRA before cancelling the registration of the credit union by virtue of subsection (1A). ]

(2) A petition for the winding up of a credit union may be presented to the court by the [F99 FCA or the PRA] if it appears to [F100 the [F99 FCA or the PRA]] 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

[F101 (c) the rules of a credit union provide for one or more common bonds involving a connection with a locality and the requirements of section 1B are no longer met;]

or in any other case where it appears to [F100 the [F99 FCA or the PRA]] 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.

[F102 (3) The FCA and the PRA must each consult the other before presenting a petition under subsection (2). ]

Textual Amendments

F94 Words in s. 20(1)(b) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 14(2)(a) (with arts. 25, 26)

F95 S. 20(1A)-(1D) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(15)

F96 S. 20(1A)(1B) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 13(2) (with Sch. 12)

F97 Word in s. 20(1D) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 13(3) (with Sch. 12)

F98 S. 20(1E) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 13(4) (with Sch. 12)

F99 Words in s. 20(2) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 13(5) (with Sch. 12)

F100 Words 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)

F101 S. 20(2)(c) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 14(2)(b) (with arts. 25, 26)

F102 S. 20(3) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 13(6) (with Sch. 12)

Amalgamations, transfers of engagements and conversions E+W+S

21 Amalgamations and transfers of engagements. E+W+S

(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) [F103 In relation to a credit union which is not a PRA-authorised person, the FCA] shall not register a special resolution under section 50 or section 51 of the 1965 Act if in [F104 its] 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 [F105 or any requirement imposed by or under the 2000 Act]; or

[F106 (b) section 1B (further requirements where common bond relates to locality) would apply to the proposed amalgamated credit union or, as the case may be, the credit union proposing to accept the transfer of engagements and the requirements of that section would not be met.]

[F107 (3A) In relation to a credit union which is a PRA-authorised person—

(a) the FCA shall not register a special resolution under section 50 or section 51 of the 1965 Act if the PRA informs the FCA that it is of the opinion that that paragraph (a) or (b) of subsection (3) applies, and

(b) the PRA must consult the FCA before determining its opinion.]

(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 [F108 does not fall within a common bond and as a result does not qualify 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.

Textual Amendments

F103 Words in s. 21(3) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 14(2) (with Sch. 12)

F104 Word 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)

F105 Words in s. 21(3)(a) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(16)

F106 S. 21(3)(b) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 14(3)(a) (with arts. 25, 26)

F107 S. 21(3A) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 14(3) (with Sch. 12)

F108 Words in s. 21(4) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 14(3)(b) (with arts. 25, 26)

22 No conversion of credit union into company, etc. E+W+S

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.

23 Conversion of company into credit union. E+W+S

(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 [F109 FCA] 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; [F110 and]

(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 [F111 any applicable rules F112 ...] in the case of a member of a credit union; F113 . . .

F114 (c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F115 (4) In subsection (3), “applicable rules” are—

(a) if the credit union is a PRA-authorised person, rules made by the PRA or the FCA under the 2000 Act; and

(b) if the credit union is not a PRA-authorised person, rules made by the FCA under the 2000 Act.]

Textual Amendments

F109 Word in s. 23(3) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 15(2)(a) (with Sch. 12)

F110 Word in s. 23(3)(a) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(17)(a)

F111 Words in s. 23(3)(b) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(17)(b)

F112 Words in s. 23(3)(b) omitted (1.4.2013) by virtue of The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 15(2)(b) (with Sch. 12)

F113 Word in s. 23(3)(b) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(17)(c)

F114 S. 23(3)(c) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(17)(d)

F115 S. 23(4) inserted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 15(3) (with Sch. 12)

General and miscellaneous U.K.

[F116 23A Power to make provision corresponding to provision applying to building societies U.K.

(1) The Treasury may by regulations amend this Act so as to make provision for credit unions corresponding to any enactment applying to building societies.

(2) The power conferred by subsection (1) may not be exercised so as to modify any of the following provisions of this Act—

(a) sections 1 and 2 (registration as a credit union);

(b) section 3 (use of name “credit union”);

(c) section 8 (general prohibition on deposit-taking), but without prejudice to the power to add exceptions to those in sections 9 and 10 and to modify those sections;

(d) section 21 (amalgamations and transfers of engagements);

(e) section 22 (no conversion of credit union into company, etc. );

(f) section 23 (conversion of company into credit union).

(3) Regulations under subsection (1) may—

(a) confer power to make orders, regulations and other subordinate legislation;

(b) create criminal offences, but only—

(i) in circumstances corresponding to an offence under the enactments relating to building societies, and

(ii) subject to a maximum penalty no greater than is provided for in respect of the corresponding offence;

(c) provide for the charging of fees, but not any charge in the nature of taxation.

(4) The Treasury may by regulations make such amendments of enactments as appear to them to be appropriate in consequence of any provision made under subsection (1).

This includes power to make consequential amendments of the provisions listed in subsection (2).

(5) In this section “ enactment ” includes—

(a) an enactment contained in subordinate legislation within the meaning of the Interpretation Act 1978 (c. 30),

(b) an enactment contained in, or in an instrument made under, an Act of the Scottish Parliament,

(c) an enactment contained in, or in an instrument made under, Northern Ireland legislation within the meaning of the Interpretation Act 1978, and

(d) an enactment contained in, or in an instrument made under, a Measure or Act of the National Assembly for Wales.

(6) Before making regulations under this section the Treasury must consult such persons as appear to them to be appropriate.

(7) No regulations under this section are to be made unless a draft has been laid before and approved by a resolution of each House of Parliament.]

Textual Amendments

F116 S. 23A inserted (1.12.2013) by Co-operative and Community Benefit Societies and Credit Unions Act 2010 (c. 7), ss. 5(1), 8(2) (with s. 4(6)); S.I. 2013/2936, art. 2

F117 24 Modifications of requirements as to audit of accounts. U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F117 S. 24 omitted (8.1.2012) by virtue of The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 10(3) (with arts. 25, 26)

25 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F118 U.K.

Textual Amendments

F118 S. 25 repealed by Income and Corporation Taxes Act 1988 (c. 1, SIF 63:1), s. 844(4), Sch. 31

26 Prohibition on subsidiaries. E+W+S

A credit union shall not have any subsidiary within the meaning of section 15 of the M1 Friendly and Industrial and Provident Societies Act 1968.

Marginal Citations

M1 1968 c. 55.

F119 27 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F119 S. 27 omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(19)

28 Provisions as to offences. E+W+S

(1) Subject to subsections (2) and (3) below, in sections 61 to 66 and section 68 of the 1965 Act (general provisions as to offences by registered societies, their officers and others) as they apply to credit unions references to the 1965 Act shall include references to this Act.

F120 (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) Without prejudice to the operation of subsection (1) above in relation to offences under the 1965 Act committed by or in relation to a credit union, section 66(2) of that Act (extension of time limit for summary prosecutions in certain cases) shall not apply to proceedings for an offence under this Act.

(4) Where under section 62 of the 1965 Act (offences by registered societies to be also offences by officers, etc.) as it applies by virtue of subsection (1) above an individual is convicted on indictment of an offence under this Act, he shall be liable not only to a fine but, in the alternative or in addition, to imprisonment for a term not exceeding two years.

(5) Where an offence under this Act which has been committed by a body corporate other than a registered society is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any director, manager, secretary or similar officer of the body corporate, or any person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

(6) In any proceedings for an offence under this Act it shall be a defence for the person charged to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control.

Textual Amendments

F120 S. 28(2) 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)

[F121 29 Orders and regulations. E+W+S

(1) Any power to make an order or regulations conferred on the Treasury by any provision of this Act shall be exercisable by statutory instrument.

(2) [F122 Except as provided by section 23A(7), ] [F123 and] [F124 subject to subsection (3),] A statutory instrument made under this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

[F125 (3) A statutory instrument containing an order under section 5A or section 11(1A) of this Act may not be made unless a draft of the instrument has been laid before and approved by a resolution of each House of Parliament.]

Textual Amendments

F121 S. 29 substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 287 (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F122 Words in s. 29(2) inserted (1.12.2013) by Co-operative and Community Benefit Societies and Credit Unions Act 2010 (c. 7), ss. 5(2), 8(2) (with s. 4(6)); S.I. 2013/2936, art. 2

F123 Word in s. 29(2) inserted (1.12.2013 being the date that 2010 c. 7, s. 5(2) comes into force, see S.I. 2013/2936 art. 2) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(a), 15(4)(a) (with arts. 25, 26)

F124 Words in s. 29(2) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(4)(b) (with arts. 25, 26)

F125 S. 29(3) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(4)(c) (with arts. 25, 26)

F126 30 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E+W+S

Textual Amendments

F126 S. 30 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1)(2), Sch. 3 Pt. IV para. 288, Sch. 4 (with art. 13(3)); S.I. 2001/3538, art. 2(1)

31 Interpretation, etc. E+W+S

(1) In this Act—

• F127 . . .

• [F128 “body corporate” includes a partnership regarded as a legal person under the law of the country or territory in which it was established;]

• “charitable", in the application of this Act to Scotland, shall be construed in the same way as in the Income Tax Acts;

• [F129 “ civil partner ” includes former civil partner [F130 and reputed civil partner ] ; ]

• [F131 “corporate member”, in relation to a credit union, has the meaning assigned to it by section 5A above;]

• “credit union”, except in the expression “Northern Ireland credit union", means a society registered under the 1965 Act by virtue of section 1 above;

• [F132 “interest-bearing share” has the meaning assigned to it by section 7A(6) above;]

• “the 1965 Act” means the Industrial and Provident Societies Act 1965;

• “non-qualifying member”, in relation to a credit union, has the meaning assigned to it by sections 5(5) and 21(4) above;

• F133 ...

• [F134 “partnership” means a partnership not regarded as a legal person under the law of the country or territory in which it was established;]

• “relative”, in relation to any person, means any of the following—

  (a)

  his spouse [F135 or civil partner ];

  (b)

  any lineal ancestor, lineal descendant, brother, sister, aunt, uncle, nephew, niece or first cousin of his or his spouse [F135 or civil partner ]; and

  (c)

  the spouse [F135 or civil partner ] of any relative within paragraph (b) above;

  and for the purpose of deducing any such relationship an illegitimate child or step-child shall be treated as [F136 the legitimate child of the relationship in question ];

• “spouse” includes former spouse and reputed spouse; and

• F137 . . .

[F138 (1A) In this Act, references to a deposit or accepting deposits must be read with—

(a) section 22 of the 2000 Act;

(b) any relevant order under that section; and

(c) Schedule 2 to that Act.]

(2) Section 67 and sections [F139 70A, F140 . . .72 and] 74 of the 1965 Act (supplementary provisions as to recovery of costs, fees, regulations, documents F141 . . . and general interpretation provisions) shall apply for the purposes of this Act as they apply for the purposes of that Act.

(3) In its application to credit unions the 1965 Act shall have effect subject to the provisions of this Act and with the omission of the following provisions (which are replaced by, or are inconsistent with, provisions of this Act), that is to say sections 6, 12, 19, 21, 30 and 31.

[F142 (4) Sections 7(1)(b) (registered society not to carry on the business of banking), [F143 sections 39 to 39B (annual returns etc.)] F144 and section 40 (display of latest balance sheet) F145 of the 1965 Act (which are replaced by, or are inconsistent with, provisions of the 2000 Act) do not apply to credit unions. ]

Textual Amendments

F127 Definition of “authorised bank” in s. 31(1) omitted (2.7.2002) by virtue of S.I. 2002/1501, arts. 1(1), 2(20)(a)(i)

F128 Words in s. 31(1) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(5)(a) (with arts. 25, 26)

F129 Words in s. 31(1) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), s. 263(10)(b), Sch. 27 para. 61(2); S.I. 2005/3175, art. 2(2)

F130 Words in s. 31(1) inserted (5.12.2005) by Civil Partnership Act 2004 (Overseas Relationships and Consequential, etc. Amendments) Order 2005 (S.I. 2005/3129), art. 1, Sch. 4 para. 4

F131 Words in s. 31(1) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(5)(b) (with arts. 25, 26)

F132 Words in s. 31(1) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 19(2) (with arts. 25, 26)

F133 Words in s. 31(1) omitted (1.4.2013) by virtue of The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 16 (with Sch. 12)

F134 Words in s. 31(1) inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 15(5)(c) (with arts. 25, 26)

F135 Words in s. 31(1) inserted (5.12.2005) by Civil Partnership Act 2004 (c. 33), s. 263(10)(b), Sch. 27 para. 61(3)(a); S.I. 2005/3175, art. 2(2)

F136 Words in s. 31(1) substituted (5.12.2005) by Civil Partnership Act 2004 (c. 33), s. 263(10)(b), Sch. 27 para. 61(3)(b); S.I. 2005/3175, art. 2(2)

F137 Definition of “statutory maximum” in s. 31(1) repealed (5.11.1993) by 1993 c. 50, s. 1(1), Sch. 1 Pt. XIV.

F138 S. 31(1A) substituted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(20)(b)

F139 Words in s. 31(2) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 289(a) (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F140 Words in s. 31(2) omitted (3.7.2002) by virtue of S.I. 2002/1555, arts. 1, 7(3)

F141 Words in s. 31(2) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1)(2), Sch. 3 Pt. IV para. 289(b), Sch. 4 (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F142 S. 31(4) inserted (2.7.2002) by S.I. 2002/1501, arts. 1(1), 2(20)(c)

F143 Words in s. 31(4) substituted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 6 (with arts. 25, 26)

F144 Amended by the Friendly and Industrial and Provident Societies Act 1968 (c. 55), Schedule 1; S.I. 1996/1738; S.I. 2001/2617.

F145 Repealed in part by S.I.1996/1738.

Modifications etc. (not altering text)

C2 S. 31(1) extended (1.1.1993) by S.I. 1992/3218, reg. 82(1), Sch. 10 Pt. I para. 9

[F146 31A. (1) In this Act, references to deferred shares are to a class of shares where— U.K.

(a) the rights and obligations of the credit union and the member in respect of those shares are set out in a single document, or in a series of documents (“the issue documents”);

(b) each of the issue documents is provided to every applicant for the shares;

(c) one of the issue documents contains a prominent statement to the effect that the shares are deferred shares for the purposes of this Act;

(d) each of the issue documents contains a prominent statement stating whether the shares are, or are not, an investment covered by the Financial Services Compensation Scheme (see section 213 of the Financial Services and Markets Act 2000);

(e) any document evidencing title to the shares contains the statements required by paragraphs (c) and (d) above;

(f) one of the issue documents contains a term which prohibits the repayment of any principal to the shareholder except in Case A or Case B.

(2) Case A is the winding up or dissolution of the credit union in circumstances where all sums due from the credit union to creditors claiming in the winding up or dissolution are paid in full.

(3) Case B is where—

(a) the credit union applies to the [F147 appropriate authority] for consent to repay principal to the shareholder,

(b) the credit union so applies otherwise than in consequence of a provision in any of the issue documents which requires it to apply, grants it any benefit for applying or imposes a sanction against failure to apply, and

(c) the [F147 appropriate authority] grants consent.

(4) “Creditors” in subsection (2) above includes members holding shares, other than deferred shares, in the credit union, as regards the principal of those shares and any interest or dividend due on them.

(5) On any modification of the definition of “deferred shares” in the Building Societies Act 1986 or an instrument made under that Act, the Treasury may, by order, modify the meaning of deferred shares in this section so as to assimilate it to the modified definition.]

Textual Amendments

F146 S. 31A inserted (8.1.2012) by The Legislative Reform (Industrial and Provident Societies and Credit Unions) Order 2011 (S.I. 2011/2687), arts. 1(1)(b), 17(4) (with arts. 25, 26)

F147 Words in s. 31A(3) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 17 (with Sch. 12)

32 Northern Ireland. U.K.

(1) The Treasury may make reciprocal arrangements with the Department of Commerce for Northern Ireland or such other authority as may be specified for the purposes of this subsection by any Measure of the Northern Ireland Assembly with a view to securing that, on or after the commencement of this Act,—

(a) the law applicable in England and [F148 Wales, or (as the case may be) Scotland, to credit unions registered by the [F149 FCA]] may be applied, in such cases and subject to such modifications as may be provided in the arrangements, to Northern Ireland credit unions; and

(b) the law applicable in Northern Ireland to Northern Ireland credit unions may be applied, in such cases and subject to such modifications as may be provided in the arrangements, to credit unions registered [F150 by the [F149 FCA]];

and section 76 of the 1965 Act (which enables societies registered in Northern Ireland to be treated for certain purposes as if they were registered under that Act) shall not apply to Northern Ireland credit unions.

(2) The Treasury may by regulations F151 . . . Act make provision for giving effect to any arrangements made under subsection (1) above, and such regulations may in particular—

(a) confer rights and obligations (appropriate to credit unions) under this Act and the Industrial and Provident Societies Acts 1965 to 1978 on Northern Ireland credit unions in such circumstances as may be specified in the regulations;

(b) confer functions on [F152 each of the FCA and the PRA] in relation to Northern Ireland credit unions; and

(c) make such modifications of this Act, the Industrial and Provident Societies Acts 1965 to 1978 and the M2 Government of Ireland (Companies, Societies, etc.) Order 1922 as appear to the Treasury to be expedient to give effect to the arrangements.

(3) In this section “Northern Ireland credit union” means a society registered as a credit union under the law of Northern Ireland.

(4) An Order in Council made under paragraph 1(1)(b) of Schedule 1 to the M3 Northern Ireland Act 1974 which contains a statement that its purposes correspond to those of this Act shall be subject to annulment in pursuance of a resolution of either House of Parliament instead of the Order, or a draft of the Order, being subject to the procedure set out in paragraph 1(4) or (5) of that Schedule.

Textual Amendments

F148 Words in s. 32(1)(a) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 290(a) (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F149 Word in s. 32(1) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 18(2) (with Sch. 12)

F150 Words in s. 32(1)(b) substituted (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(1), Sch. 3 Pt. IV para. 290(b) (with art. 13(3)); S.I. 2001/3538, art. 2(1)

F151 Words in s. 32(2) omitted (3.7.2002) by virtue of S.I. 2002/1555, arts. 1, 7(4)

F152 Words in s. 32(2) substituted (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 6 para. 18(3) (with Sch. 12)

Marginal Citations

M2 S.R. & O. 1922 No. 184

M3 1974 c. 28.

33 Short title, commencement and extent. E+W+S

(1) This Act may be cited as the Credit Unions Act 1979.

(2) This section and section 32 above shall come into operation on the passing of this Act and the other provisions of this Act shall come into operation on such day as the Treasury may appoint by order made by statutory instrument; and different days may be so appointed for different provisions.

(3) Any reference in this Act to the commencement of any provision of this Act shall be construed as a reference to the day appointed under this section for the coming into operation of that provision.

(4) With the exception of[F153 section 23A so far as it confers power to make consequential amendments of enactments extending to Northern Ireland, ] section 25 and section 32(4) above, this Act does not extend to Northern Ireland.

Textual Amendments

F153 Words in s. 33(4) inserted (1.12.2013) by Co-operative and Community Benefit Societies and Credit Unions Act 2010 (c. 7), ss. 5(3), 8(2) (with s. 4(6)); S.I. 2013/2936, art. 2

Modifications etc. (not altering text)

C3 Power of appointment conferred by s. 33(2) partly exercised: S.I. 1979/936 and 1980/481