1This chapter applies to all credit unions
The purpose of this chapter is to provide conduct rules and guidance on credit unions’ holding of shares and deposits, joint accounts, borrowings and insurance cover.
1There is no restriction on the number of members who may jointly hold shares in a credit union.
A credit union must not accept deposits except:
by way of subscription for its shares from persons who may lawfully be admitted to membership of the credit union under the Credit Unions Act 1979 or the Credit Union (Northern Ireland) Order 1985 (as appropriate) and the rules of the credit union; or
from persons too young to be members under any provision of the credit union’s rules or (for Northern Ireland credit unions) under article 15 of the Credit Unions (Northern Ireland) Order 1985; or
as loans from persons under CREDS 3A.3.1R.
Credit unions that provide CTFs should ensure that under their rules depositors under the age of 18 whose deposits are held within a CTF continue to be treated as juvenile depositors until the age of 18. This will provide for the fact that CTF account holders may not withdraw any money from the CTF until they reach the age of 18, in contrast with the position in relation to other deposits which become shares and may be withdrawn earlier.
CREDS 3A.2.2R and CREDS 3A.3.1R are intended to ensure that the liberalisation of credit union borrowing (CREDS 3A.3.2G) does not have the unintended effect of undermining the common bond concept by allowing credit unions to operate deposit accounts for natural persons who do not qualify for membership.
1A credit union must not borrow from a natural person, except by way of a subordinated loan qualifying as capital under PRA rules.
CREDS 3A.3.1R does not apply to borrowing from a body corporate. A loan made to a credit union by a body corporate can either be a subordinated loan (providing regulatory capital within PRA rules) or a senior loan (providing ordinary funding, but not constituting regulatory capital).
1A credit union must at all times maintain in force a policy of insurance that complies with the requirements in part 2.10 of the Credit Unions Rulebook Part of the PRA Rulebook.
The policy of insurance required by CREDS 3A.4.1R is intended to protect the credit union from loss suffered or liability incurred by reason of the fraud or other dishonesty of any of its officers or employees.
A credit union must ensure that the governing body reports to the members at the annual general meeting of the credit union on whether the credit union has maintained at all times the policy of insurance required by CREDS 3A.4.1R.
