1This chapter applies to all credit unions.

A credit union must not permit a member to have or claim any interest in the shares of the credit union, other than deferred shares, exceeding the greater of:

1. (1)

   £10,000; or

2. (2)

   1.5 per cent of the total non-deferred shares in the credit union.

Where:

1. (1)

   there is an increase in the percentage of the total non-deferred shares in the credit union held by a member; and

2. (2)

   this is the result of a reduction in the total non-deferred shares in the credit union occurring after the time at which that member last acquired shares, or an interest in the shares, of the credit union, other than deferred shares;

that increase in the percentage of the total non-deferred shares in the credit union held by that member must be disregarded for the purposes of the limits in CREDS 4.2.1 R (2) and CREDS 4.2.5 R.

For the purpose only of the limit in CREDS 4.2.1 R, the interest of a member in a joint account must be treated as 50 per cent of the shareholding in that account.

1. (1)

   A credit union must not accept deposits except:

   1. (a)

      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 and the rules of the credit union; or

   2. (b)

      from persons too young to be members under (2); or

   3. (c)

      as loans from persons under CREDS 3.3.1 R to CREDS 3.3.2 G.

2. (2)

   A credit union must not accept deposits exceeding the greater of £10,000 or 1.5 per cent of the total non-deferred shares in the credit union from a person who is under the age at which, by virtue of any provision of the credit union's rules or otherwise, he may lawfully become a member of the credit union, unless the deposits are held in a CTF in which case the credit union may accept a larger deposit.

A credit union must at all times maintain in force a policy of insurance complying with CREDS 4.4.2 R.

In order to comply with CREDS 4.4.1 R, a policy of insurance (subject to the exception in CREDS 4.4.3 R):

1. (1)

   must insure the credit union in respect of every description of loss suffered or liability incurred by reason of the fraud or other dishonesty of any of its officers or employees;

2. (2)

   must so insure the credit union up to the limits set out in CREDS 4 Annex 1 R in respect of any one claim, except that the liability of the insurer may be restricted to the amounts set out in CREDS 4 Annex 1 R in respect of the total of the claims made in any one year; and

3. (3)

   must not provide, in relation to any claim, for any amount greater than one per cent of the limits on any one claim set out in CREDS 4 Annex 1 R to be met by the credit union.

From the losses and liabilities against which a policy complying with CREDS 4.4.2 R must insure, there must be excepted all loss suffered or liability incurred by a credit union other than direct pecuniary loss discovered during the currency of the policy of insurance or within 18 months of the date on which either the policy of insurance lapses, or the duties of the officer or employee concerned are terminated, whichever occurs first.

The "aggregate value" in CREDS 4 Annex 1 R comprises the shares and deposits (including those held in a CTF) referred to in CREDS 4.3.1 R (1)(a) and (b).