Deregulation (Credit Unions) Order 1996

JurisdictionUK Non-devolved

1996No. 1189

DEREGULATION

The Deregulation (Credit Unions) Order 1996

29thApril1996

1stSeptember1996

Whereas:

(a) the Treasury are of the opinion that certain provisions of the Credit Unions Act 1979 ( a) impose burdens affecting persons in the carrying on of a trade, business, profession or otherwise and that by amending or repealing the provisions concerned and by making certain other provisions it is possible to remove or reduce the burdens without removing any necessary protection;(b) the Treasury have consulted such organisations as appear to them to be representative of interests substantially affected by their proposals and such other persons as they consider appropriate;(c) it appears to the Treasury that it is appropriate following that consultation to proceed with the making of this Order;(d) a document setting out the Treasury's proposals has been laid before Parliament in accordance with section 3 of the Deregulation and Contracting Out Act 1994 ( b) and the period for Parliamentary consideration under section 4 of that Act has expired;(e) the Treasury have had regard to the representations made during that period;(f) a draft of this Order has been laid before Parliament with a statement giving details of such representations and the changes to the Treasury's proposals in the light of those representations; and(g) a draft of this Order has been approved by resolution of each House of Parliament.

Now, therefore, the Treasury in exercise of the powers conferred on them by section 1 of the Deregulation and Contracting Out Act 1994, hereby make the following Order:-

Title and Commencement

1. This Order may be cited as the Deregulation (Credit Unions) Order 1996 and shall come into force on 1st September 1996.

Interpretation

2. In this Order "the 1979 Act" means the Credit Unions Act 1979 and "the 1965 Act" means the Industrial and Provident Societies Act 1965 ( c).

(a) 1979 c.34.

(b) 1994 c.40.

(c) 1965 c.12.

Registration as a Credit Union

3.-(1) Section 1 of the 1979 Act (which enables a society to be registered under the 1965 Act as a credit union) shall be amended as follows.

(2) In subsection (4) (which lists the appropriate qualifications for admission to membership) after paragraph (e) there shall be inserted-

"(f) residing in or being employed in a particular locality;".

(3) In subsection (5) (ascertainment by registrar of whether a common bond exists between the members of the society) for paragraph (a) there shall be substituted-

"(a) may, if he considers it proper in the circumstances of the case, treat as sufficient evidence of the existence of a common bond a statutory declaration which is given by three members and the secretary of the society, and is to the effect that a common bond exists,".

Shareholding Limit

4.-(1) Section 5 of the 1979 Act (membership and voting rights) shall be amended as follows.

(2) In subsection (3) (which states the limit on a member's interest in the shares of a credit union) for "£5,000" there shall be substituted "the greater of £5,000 and 1.5 per cent. of the total shareholdings in the credit union."

(3) After subsection (4) there shall be inserted-

"(4A) Where subsection (3) above would be breached in relation to a member of a credit union because of a reduction in the total shareholdings in the credit union, that subsection shall, in relation to him, have effect, as respects any shares which he had, or interest which he claimed, immediately before the reduction, as if there were added at the end "at the time, or latest time, when he acquired shares, or an interest in the shares, of the credit union"."

(4) After subsection (9) there shall be inserted-

"(10) For the purposes of subsection (3) above, the total shareholdings in a credit union at any time shall be taken to be the total shareholdings as shown in the most recent audited balance sheet to have been sent to the appropriate registrar under section 39 of the 1965 Act (annual returns)."

Loans to be treated as secured

5.-(1) After section 11 of the 1979 Act (loans) there shall be inserted-

"Loans to be treated as secured

11A.-(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...

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