CREDS 7.1 Application, purpose and interpretation

1. (1)

   This chapter seeks to protect the interests of credit unions' members in respect of loans to members under section 11 of the Credit Unions Act 1979 or article 28 of the Credit Unions (Northern Ireland) Order 19852. Principle 4 requires credit unions to maintain adequate financial resources3.

2. (2)

   [deleted]3

The rules and guidance in this chapter are in addition to the provisions of (in relation to Great Britain credit unions)2 section 11 of the Credit Unions Act 1979 and (in relation to Northern Ireland credit unions) article 28 of the Credit Unions (Northern Ireland) Order 19852 in relation to loans made by credit unions. Under these provisions

1. (1)

   a Great Britain credit union may make a loan only to:2

   2
   1. (a)

      a member of the credit union who is an individual; and

   2. (b)

      a corporate member of the credit union, if the credit union's rules provide that it may make loans to corporate members and making the loan would not result in the aggregate of the outstanding balances on loans made by the credit union to corporate members exceeding the percentage of the aggregate of the outstanding balances on all loans made by the credit union to members4 specified by or under section 11 of the Credit Unions Act 1979;

   3. (c)

      other credit unions;

2. (1A)

   a Northern Ireland credit union may make a loan only to:2

   1. (a)

      a member of the credit union who is an individual;

      2
   2. (b)

      other credit unions;2 and4

   3. (c)

      4a corporate member of the credit union if the credit union’s rules provide that it may make loans to corporate members and making the loan would not result in the total amount of the outstanding balances on loans made by the credit union to corporate members exceeding the percentage of the total amount of the outstanding balances on all loans made by the credit union to members specified by or under article 28 of the Credit Unions (Northern Ireland) Order 1985;

3. (2)

   a credit union may not make a loan to a member of the credit union holding only deferred shares.

"Corporate member" has the same meaning as in section 5A of the Credit Unions Act 1979 or article 14A of the Credit Unions (Northern Ireland) Order 1985 as appropriate4.