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  1. Point in time
    2005-09-09

CRED 9.1 Application, purpose and interpretation

CRED 9.1.1R

This chapter applies to all credit unions.

CRED 9.1.2G

This chapter amplifies Principle 4 under which a credit union must maintain adequate financial resources and the threshold condition for permission that a credit union's resources must be adequate in relation to the regulated activities that it carries on.

CRED 9.1.3G

A central feature of credit union business is maturity transformation. That is taking short term deposits (in the form of share accounts) from members and making comparatively long-term loans. It is important, in order to maintain confidence and protect members, that a credit union has adequate liquid assets (liquidity) to enable it to fulfil members' withdrawal requests within expected timeframes.

CRED 9.1.4G

The liquid assets held by a credit union should be sufficient to meet its day-to-day business needs and to provide an appropriate cushion in the event of pressure arising from unexpected events.

CRED 9.1.5R

"Unattached shareholding" means the amount by which the member's savings with the credit union exceeds the amount which, under the terms of section 7 of the Credit Unions Act 1979, he cannot withdraw at all or he cannot withdraw without first of all obtaining the permission of the committee of management of the credit union.

CRED 9.1.6G
  1. (1)

    Under section 7 of the Credit Unions Act 1979, if a withdrawal of shares would reduce the member's savings with the credit union to less than his total liability (including contingent liability) to the credit union whether as borrower, guarantor or otherwise then:

    1. (a)

      if there is a loan to the member which is treated as under section 11A of the Credit Unions Act 1979, the withdrawal is not permitted; and

    2. (b)

      in any other case, the withdrawal is permitted only at the discretion of the committee of management of the credit union.

  2. (2)

    'Unattached shareholding' is intended to refer to that portion of a member's savings the withdrawal of which is not restricted by section 7.

CRED 9.1.7R

'Total relevant liabilities' means the sum of:

  1. (1)

    unattached shareholdings in the credit union, and deposits by persons too young to be members of the credit union; and1

  2. (2)

    liabilities (other than liabilities for shares) with an original or remaining maturity of less than three months (including overdrafts and instalments of loans).1