Credit Union Act, 1997

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Number 15 of 1997

CREDIT UNION ACT, 1997

ARRANGEMENT OF SECTIONS

PART I

Preliminary and General

PART II

Registration and Membership

Registration

Rules

Membership

PART III

Operation of Credit Unions

Business and raising of funds

Shares and deposits

Borrowing

Loans

Other transactions

Investments etc.

Provision of additional services to members

PART IV

Management of Credit Unions

Directors

Supervisory Committee

Officers

General provisions

PART V

Meetings, Resolutions etc.

PART VI

Control and Supervision of Credit Unions by the Registrar

General

Regulatory directions and prohibition orders

Inspections and information

Supervisory powers

Administrative Provisions

PART VII

Accounts and Audit

PART VIII

Disputes and Complaints

PART IX

Amalgamations and Transfers of Engagements

PART X

Winding up

PART XI

Appointment of Credit Union Administrator

PART XII

Appointment of Examiner

PART XIII

Offences and Civil Proceedings

PART XIV

Miscellaneous and General

FIRST SCHEDULE

Matters to be Provided for in Rules of Credit Union

SECOND SCHEDULE

Form of Receipt

THIRD SCHEDULE

Credit Committee, Credit Control Committee and Membership Committee

FOURTH SCHEDULE

Supplementary Provisions in Relation to Regulatory Directions

FIFTH SCHEDULE

Supplementary Provisions as to Removal or Suspension by the Registrar of Directors and Members of Supervisory Committee

Number 15 of 1997

CREDIT UNION ACT, 1997

AN ACT TO MAKE NEW PROVISION IN RELATION TO CREDIT UNIONS AND FOR CONNECTED PURPOSES. [3rd May, 1997]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

vPreliminary and General

Short title and commencement.

1.—(1) This Act may be cited as the Credit Union Act, 1997.

(2) This Act shall come into operation on such day or days as may be fixed by order made by the Minister; and different days may be so fixed for different provisions and for different purposes.

(3) Without prejudice to the generality of subsection (2), an order under that subsection may make different provision in relation to credit unions registered before the passing of this Act as compared with those registered later.

Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

“Act of 1966” means the Credit Union Act, 1966 ;

“Advisory Committee” means the committee established under section 180 ;

“amendment”, in relation to the rules of a credit union, includes a new rule, and a resolution rescinding a rule, of the credit union;

“annual accounts” has the meaning given by section 111 (6);

“the annual general meeting” has the meaning given by section 78 (1);

“annual return” means the annual return which a credit union is required by section 124 to send to the Registrar;

“board of directors” means the committee of management or other directing body of a credit union;

“books and documents” includes accounts and records made in any manner, and “books or documents” shall be construed accordingly;

“common bond” means a common bond falling within section 6 (3);

“the Companies Acts” means the Companies Acts, 1963 to 1990, together with any enactment which is to be construed as one with those Acts;

“contravention” includes failure to comply;

“the Court” means the High Court;

“credit institution” means—

(a) a recognised bank within the meaning of the Central Bank Acts, 1942 to 1997,

(b) a trustee savings bank,

(c) the Post Office Savings Bank, or

(d) a building society within the meaning of the Building Societies Act, 1989 ;

“credit union” means a society registered as such under this Act, including a society deemed to be so registered by virtue of section 5 (3);

“debentures” means any debentures, debenture stock or bonds of a credit union, whether constituting a charge on the assets of the credit union or not;

“general meeting” means an annual general meeting or a special general meeting;

“meeting”, includes, where the registered rules of a credit union so allow, a meeting of delegates appointed by members;

“member of the family”, in relation to any person, means that person's parent, grandfather, grandmother, father-in-law, mother-in-law, husband, wife, son, daughter, grandson, granddaughter, brother, sister, half-brother, half-sister, uncle, aunt, nephew, niece, first cousin, son-in-law, daughter-in-law, brother-in-law or sister-in-law;

“the Minister” means the Minister for Enterprise and Employment;

“non-qualifying member”, in relation to a credit union, has the meaning given by section 17 (4);

“officer”, in relation to a credit union, includes a chairman (or president), vice-chairman (or vice-president), treasurer, secretary, a member of the board of directors or of a principal Committee or Supervisory Committee, employee, credit officer or credit control officer, but does not include an auditor appointed by the credit union in accordance with the requirements of this Act;

“the organisation meeting” has the meaning given by section 77 (1);

“pass book” includes any type of written statement of account;

“principal Committee” in relation to a credit union, means a credit committee, credit control committee, membership committee;

“persons claiming through a member” includes the executors or administrators and assignees of a member and, where nomination is allowed, his nominee;

“prescribed” means prescribed by regulations made by the Minister and “prescribe” shall be construed accordingly;

“the register” means the register maintained under section 8 (5);

“registered” means for the time being entered in the register and “registration” shall be construed accordingly;

“Registrar” means the Registrar of Friendly Societies;

“regulations” means regulations made by the Minister under this Act;

“regulatory directions” has the meaning given by section 87 (3);

“savings” includes shares and deposits (if any);

“savings protection scheme” has the meaning given by section 46 (2);

“share” means, in relation to a credit union, each sum of one pound standing to the credit of a member of that credit union in the register of members required by this Act to be kept by that credit union;

“special general meeting” shall be construed in accordance with section 79 ;

“special resolution” means a resolution which—

(a) is passed by a majority of not less than three quarters of such members of a credit union for the time being entitled under the rules to vote as may have voted in person at any general meeting of which notice, specifying the intention to propose the resolution, has been duly given according to the rules, and

(b) is confirmed by a majority of such members for the time being entitled under the rules to vote as may have voted in person at a subsequent general meeting of which notice has been duly given held not less than 14 days and not more than 28 days from the day of the meeting at which the resolution was first passed;

“Supervisory Committee” has the meaning given it by section 58 (1);

“surplus funds” shall be construed in accordance with section 45 (2);

“voluntary assistant”, in relation to a credit union, means a member of the credit union who, although not an officer of the credit union, is engaged in any way (but without remuneration) in the operation of the credit union.

(2) Any reference in this Act to a member present at a meeting means, in the case of a member which is not a natural person, being represented at the meeting by a representative, as mentioned in section 82 (4).

(3) In this Act a reference to a Part, section or Schedule is to a Part, section or Schedule of or to this Act, unless it is indicated that reference to some other enactment is intended.

(4) In this Act a reference to a subsection, paragraph or subparagraph is to the subsection, paragraph or subparagraph of the provision in which the reference occurs, unless it is indicated that reference to some other provision is intended.

(5) In this Act a reference to an enactment includes a reference to that enactment as amended by or under any enactment, including this Act.

Orders and regulations.

3.—(1) Any power under this Act to make an order includes power to amend or revoke an order made in the exercise of that power.

(2) Every order or regulation made under this Act, other than an order under section 1 (2), shall be laid before each House of the Oireachtas as soon as practicable after it is made; and, if a resolution annulling the order or regulation is passed by either such House within the next twenty-one days on which that House has sat after the order or regulation is laid before it, the order or regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(3) Except in so far as any provision of this Act otherwise provides, any power conferred by this Act on the Registrar to give directions shall be exerciseable by rules and for the purposes of section 2 of the Statutory Instruments Act, 1947 , any rules made by the Registrar under this Act shall be taken to be of a character which affects a class of the public.

(4) Any order, regulation, direction or rules made under this Act—

(a) may contain such consequential, supplementary and ancillary provisions as the Minister or, as the case may be, the Registrar considers necessary or expedient; and

(b) may make different provision for different cases or descriptions of cases.

Expenses.

4.—Any expenses incurred by the Minister in the administration of this Act shall, to such extent as may be sanctioned by the Minister for Finance, be paid out of moneys provided by the Oireachtas.

Repeals and transition from the former law.

5.—(1) The following enactments are hereby repealed—

(a) the Act of 1966; and

(b) Part III of the Industrial and Provident Societies (Amendment) Act, 1978 .

(2) After the commencement of this subsection, a society may not become registered as a credit union except under this Act.

(3) A society which, immediately before the commencement of this subsection, was registered as a credit union under the Industrial and Provident Societies Acts, 1893 to 1978, shall, at that commencement, be deemed to be registered as a credit union under this Act and, accordingly—

(a) after that commencement, no provision of those Acts shall apply to a credit union; and

(b) except in so far as the rules of a credit union which is deemed to be so registered are contrary to any provision of this Act, those rules, as in existence immediately before the commencement of this subsection, shall be regarded as its registered rules at that commencement.

(4) Subject to subsection (5), if at any time the Registrar is satisfied that a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, or the Friendly Societies Acts, 1896 to 1977, is carrying on its affairs in such a way that its objects are wholly or substantially those of a credit union, he may, notwithstanding anything in those Acts, direct the society, within a period specified in the direction—

(a) to cease all its activities or some activities specified in the direction; or

(b) to wind up its affairs; or

(c) to register by virtue of this Act as a credit union;

and a society to which such a direction is given shall comply with it within the specified period.

(5) Subsection (4) does not apply to a society—

(a) which was registered under the Industrial and Provident Societies Acts, 1893 to 1936, between 24th January 1962 and 31st August 1966; and

(b) the objects of which have at all times been wholly or substantially those of a credit union.

(6) After the commencement of this subsection, a society the objects or proposed objects of which are wholly or substantially those specified in section 6 (2) may not be registered under the Industrial and Provident Societies Acts, 1893 to 1978.

(7) Section 3 (3) shall not apply to directions under subsection (4).

PART II

Registration and Membership

Registration

Conditions for registration as a credit union.

6.—(1) A society may be registered under this Act as a credit union if the Registrar is satisfied that each of the following conditions is fulfilled—

(a) the society is formed for the objects specified in paragraphs (a) to (c) of subsection (2) and for no other purposes beyond those specified in paragraphs (d) to (g) of that subsection;

(b) admission to membership of the society is restricted to persons each of whom has, in relation to all the other members, at least one of the common bonds specified in subsection (3);

(c) it has at least 15 members who are of full age;

(d) its rules comply with section 13 ;

(e) the place which under those rules is, or is to be, the society's registered office is in the State;

(f) if registered, it will participate in a savings protection scheme approved under section 46 (1); and

(g) it has in force (or will have in force if registered) such a policy of insurance as is required by section 47 .

(2) The objects referred to in subsection (1)(a) are—

(a) the promotion of thrift among its members by the accumulation of their savings;

(b) the creation of sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest;

(c) the use and control of members' savings for their mutual benefit;

(d) the training and education of its members in the wise use of money;

(e) the education of its members in their economic, social and cultural well-being as members of the community;

(f) the improvement of the well-being and spirit of the members' community; and

(g) subject to section 48 , the provision to its members of such additional services as are for their mutual benefit.

(3) The common bonds referred to in subsection (1)(b) are—

(a) following a particular occupation;

(b) residing or being employed in a particular locality;

(c) being employed by a particular employer or having retired from employment with a particular employer;

(d) being a member of a bona fide organisation or being otherwise associated with other members of the society for a purpose other than that of forming a society to be registered as a credit union;

(e) any other common bond approved by the Registrar.

(4) In ascertaining whether a common bond exists between the members of a society, the Registrar—

(a) shall have regard to the qualifications which are stated in the rules to be required for admission to membership of the society, and

(b) may, if he considers it proper in the circumstances of the case, treat the fact that admission to membership is restricted as mentioned in subsection (1)(b) as sufficient evidence of the existence of a common bond.

(5) For the purposes of this Act, if the rules of a credit union so provide, a person shall be treated as having the qualification required for admission to membership stated in those rules if he is a member of the same household as, and is a member of the family of, another person who is a member of the credit union and who has a direct common bond with those other members.

Application for registration as a credit union.

7.—(1) An application for the registration of a society as a credit union shall be made to the Registrar and shall be signed by 15 members of the society, all of whom have the same common bond and one of whom shall be the secretary.

(2) An application under subsection (1) shall be accompanied by two printed copies of the society's rules.

Acknowledgement or refusal of registration.

8.—(1) If the Registrar is satisfied that a society which has made an application for registration as a credit union has complied with the provisions of this Act as to such registration, the Registrar shall issue to the society, as a credit union, an acknowledgement of registration assigning it a registered number.

(2) Unless the contrary is shown, an acknowledgement of registration issued under subsection (1) shall be sufficient evidence that the society concerned is registered as a credit union.

(3) If the Registrar refuses to register as a credit union a society which has made an application for registration, he shall notify the society accordingly and, if the society is aggrieved by the Registrar's decision, it may apply to the Court for a review of that decision.

(4) If, on an application under subsection (3), the Court considers that the decision of the Registrar should not be confirmed, the Court may give such directions as it thinks appropriate (whether to the Registrar or otherwise) for the purpose of resolving the matter.

(5) The Registrar shall enter the name of every credit union in a register maintained for the purposes of this Act (being a continuation of the register kept for the purposes of the Act of 1966).

Effect of registration.

9.—(1) By virtue of its registration, a credit union shall be a body corporate known by its registered name (by which it may sue and be sued) with perpetual succession, a common seal and limited liability.

(2) The registration of a credit union shall vest in the credit union all property for the time being vested in any person in trust for the credit union and all proceedings pending by or against the trustees of the credit union may be brought or continued by or against the credit union in its registered name.

(3) Legal proceedings in respect of any contract or other transaction—

(a) entered into by an unincorporated society before the date on which it becomes a credit union, or

(b) purporting to be entered into by such a society or by any person on its behalf before that date,

may, on or after that date, be brought by or against the credit union, subject to the Statute of Limitations, 1957 , as if it had been registered as a credit union at the date of the contract or other transaction.

Registered name.

10.—(1) The words “credit union” or “comhar creidmheasa” shall be included in the name of every credit union.

(2) The name of every credit union shall end with the word “Limited” or “Teoranta” which may be abbreviated to “Ltd.” or “Teo.” respectively.

(3) A credit union shall not use any name or title other than its registered name.

(4) A society shall not be registered—

(a) under a name which includes the word “bank”, “banker” or “banking” or any other word which is a translation, variant or derivative of any of those words, or

(b) under any other name which, in the opinion of the Registrar, is undesirable.

(5) A society shall not be registered under a name identical with that of an existing credit union or so nearly resembling such a name as to be likely to mislead members of the public as to its identity.

(6) As soon as practicable, every credit union shall cause its registered name to be painted or affixed, and to be kept painted or affixed, in a conspicuous position and in letters easily legible, on the outside of its registered office and every other office or place in which the business of the credit union is carried on, and shall have that name engraved in legible characters on its seal and set out in legible characters—

(a) in all notices, advertisements and other official publications of the credit union;

(b) in all business letters of the credit union;

(c) in all bills of exchange, promissory notes, endorsements, cheques, orders for money or goods and other instruments purporting to be signed by or on behalf of the credit union; and

(d) in all bills, invoices, receipts, and letters of credit of the credit union.

Change of registered name.

11.—(1) A credit union may not change its name except in accordance with this section.

(2) A credit union may change its name—

(a) by a resolution for the purpose passed at a general meeting of the credit union after the giving of such notice as is required by the rules of the credit union for such a resolution or, if the rules do not make special provision as to notice of such resolution, after the giving of such notice as is required by the rules for a resolution to amend the rules; and

(b) with the prior approval in writing of the Registrar.

(3) If the Registrar declines to give his approval under subsection (2)(b), the credit union may apply to the Court for a review of the Registrar's decision; and subsection (4) of section 8 shall apply to such an application as it applies to an application under subsection (3) of that section.

(4) A change in the name of a credit union shall not affect any right or obligation of the credit union, or of any member thereof, and any pending legal proceedings may be continued by or against the credit union notwithstanding its new name.

(5) Where, in the opinion of the Registrar, a credit union is (through inadvertence or otherwise) for the time being registered under a name which is undesirable, the Registrar—

(a) within one year of its being registered under that name, or

(b) in the case of a society deemed to be registered under this Act by virtue of section 5 (3), within one year from the commencement of this section,

may direct the credit union to change its name to a name approved by the Registrar.

(6) A credit union shall comply with a direction given to it under subsection (5).

(7) Where a credit union changes its name under this section, the Registrar—

(a) shall enter the new name in the register in place of the former registered name; and

(b) shall issue to the credit union an acknowledgement of registration, altered to meet the circumstances of the case.

(8) Section 3 (3) shall not apply to a direction under subsection (5).

Protection of use of seal and registered name of credit union.

12.—(1) The seal of a credit union shall be used only under the authority of a resolution of the board of directors and shall be attested by the signatures of two directors of the credit union and the countersignature of the secretary for the time being.

(2) Any officer of a credit union, or any other person acting on a credit union's behalf, who—

(a) uses any seal purporting to be a seal of the credit union which does not have the credit union's registered name engraved on it in legible characters, or

(b) issues or authorises the issue of any document such as is mentioned in paragraph (a), paragraph (b) or paragraph (d) of subsection (6) of section 10 in which that name is not set out in legible characters, or

(c) signs or authorises to be signed on behalf of the credit union any document such as is mentioned in paragraph (c) of that subsection in which that name is not so set out,

shall be guilty of an offence.

(3) Subject to subsection (4), any person, other than a credit union, who—

(a) uses in reference to himself, a name, title or descriptive expression containing the words “credit union ” or “comhar creidmheasa” or any cognate term or any derivative of those words, or

(b) represents himself as being a credit union,

shall be guilty of an offence.

(4) Subsection (3) does not apply to—

(a) the use by an officer of a title or descriptive expression indicating his office or post with the credit union; or

(b) the use of the term “Irish League of Credit Unions” by the unincorporated association having that name immediately before the passing of this Act; or

(c) the use with reference to an association or group of credit unions of a name which has been approved in writing by the Registrar.

Rules

Rules.

13.—(1) The rules of a credit union shall be in such form as the Registrar may determine and shall contain—

(a) provisions with respect to the matters in the First Schedule ; and

(b) such additional provisions as the Registrar may determine, after consultation with the Advisory Committee and such other bodies as appear to him to be expert or knowledgeable in matters relating to credit unions.

(2) The rules of a credit union may specify the form of any instrument necessary for carrying the purposes of the credit union into effect.

(3) An acknowledgement of registration issued to a credit union under this Part shall constitute an acknowledgement, and, unless the contrary is proved, be sufficient evidence of the registration of the rules of that credit union in force at the date of the acknowledgement of the registration of the credit union.

Amendment of registered rules.

14.—(1) The rules of a credit union shall not be amended except by a resolution passed by not less than two-thirds of the members of the credit union present and voting at an annual general meeting or at a special general meeting called for the purpose of considering a resolution proposing an amendment of the rules.

(2) An amendment of the registered rules of a credit union shall not be valid until the amendment has been registered under this Act, for which purpose two copies of the amendment, signed by four members, one of whom shall be the secretary and another a director, shall be sent to the Registrar.

(3) Subsection (2) shall not apply to a change in the name of a credit union, but, where a change in the name of a credit union is made in accordance with section 11 , the change in the credit union's name shall be registered by the Registrar as an amendment of the credit union's rules.

(4) On being satisfied that an amendment of a credit union's rules sent to him under subsection (2) is not contrary to the provisions of this Act, the Registrar shall issue to the credit union, within three months of his receipt of the amendment, an acknowledgement of registration which, unless the contrary is proved, shall be sufficient evidence that the amendment is duly registered.

(5) If the Registrar is not satisfied as mentioned in subsection (4) with respect to an amendment of a credit union's rules sent to him under subsection (2)—

(a) the Registrar shall issue to the credit union, within three months of his receipt of the amendment, a notice of his refusal to register the amendment, specifying the grounds for the refusal; and

(b) the credit union may apply to the Court for a review of the Registrar's decision;

and subsection (4) of section 8 shall apply to an application under paragraph (b) as it applies to an application under subsection (3) of that section.

(6) Notwithstanding anything in the rules of a credit union, the board of directors may, by resolution passed during the transitional period, make such amendments of the rules of the credit union as may be consequential on the provisions of this Act.

(7) For the purposes of subsection (6), the transitional period is the period of one year from the commencement of this section or such longer period as may be determined by the Registrar.

(8) Notwithstanding anything in subsection (4), after the expiry of one year from the commencement of this section, the Registrar shall not be required to register any amendment of a credit union's rules unless such consequential amendments of the registered rules as are mentioned in subsection (6) either—

(a) have been made before the Registrar receives the amendment; or

(b) are to be effected by the amendment.

Rules to bind members.

15.—(1) Subject to subsection (2), the registered rules of a credit union shall bind the credit union and all members of it and all persons claiming through them respectively to the same extent as if—

(a) each member had subscribed his name and affixed his seal to those rules; and

(b) there were contained in those rules a covenant on the part of each member and any person claiming through him to conform to those rules subject to the provisions of this Act.

(2) A member of a credit union shall not, without his consent in writing having been first obtained, be bound by any amendment of the credit union's rules registered after he became a member, if and so far as that amendment—

(a) requires him to subscribe for more shares than the number held by him at the date of registration of the amendment; or

(b) requires him to pay upon the shares so held any sum exceeding the amount unpaid upon them at that date; or

(c) in any other way increases his liability to contribute to the share capital of the credit union.

Provision of copies of rules.

16.—(1) A copy of the rules of a credit union shall be supplied by the credit union to any person who demands it, on payment of such fee, not exceeding the permitted maximum, as may be determined by the credit union.

(2) The permitted maximum referred to in subsection (1) is £1 or such larger sum as may for the time being be prescribed.

Membership

Requirements of, and qualifications for, membership.

17.—(1) The minimum number of members of a credit union at any time shall be 15 except that, in the case of a credit union which—

(a) by virtue of subsection (3) of section 5 , is at the commencement of that section deemed to be registered as a credit union, and

(b) has at that commencement a membership of not less than 7, but less than 15,

the minimum number of members at any time shall be the number of members on the register of the credit union at that commencement.

(2) Membership of a credit union shall be limited to, and consist of, the signatories to the application to register the society as a credit union and such other persons, having the common bond set out in the rules of the credit union, as have been duly admitted members of the credit union in accordance with the rules and comply with such of the rules as relate to membership.

(3) A person shall not be a member of a credit union unless he has at least one fully paid-up share in the credit union, but the rules of the credit union shall not require a person to have more than £10, or such larger sum as may be prescribed, in fully paid-up shares as a condition of membership.

(4) If a member of a credit union ceases to have the common bond required of members of that credit union, he may retain his membership and voting rights, and continue saving; but any such member (in this Act referred to as a “non-qualifying member”) shall be left out of account in determining for any purpose whether a common bond exists between the members of the credit union.

(5) Subject to any provision to the contrary in the rules of a credit union, a person under the age of sixteen—

(a) may be a member of the credit union, and

(b) subject to subsection (6), may enjoy all the rights of membership, other than voting rights, and can give all necessary receipts.

(6) Notwithstanding anything in subsection (5), a member of a credit union who is under the age of sixteen may not be a member of the board of directors or of a principal Committee or an office manager of the credit union.

(7) Notwithstanding any other provision of this Act, a body (whether incorporated or unincorporated), the majority of the members of which are, and continue to be, eligible for membership of a credit union may itself be admitted to, and retain membership of, that credit union, with the same rights and obligations as a natural person.

(8) A member of a credit union shall not be excluded from membership by any amendment of the credit union's rules registered after he became a member.

Appeal against refusal of membership.

18.—(1) A person who applies for membership of a credit union in accordance with its rules and is refused membership may appeal against the refusal to a Judge of the District Court for the district in which the registered office of the credit union is situated.

(2) Notice of an appeal under this section shall be in writing and shall set out the grounds on which the appeal is based; and, on the hearing of the appeal, the District Court may either confirm the refusal of membership or direct the credit union to admit the appellant to membership.

(3) The decision of the District Court on an appeal under this section shall be final, except that any question of law arising on the appeal may be referred to the Court for its determination; and, by leave of the Court, an appeal shall lie to the Supreme Court from any such determination of the Court.

Expulsion and withdrawal from credit union.

19.—(1) A member of a credit union may be expelled from the credit union by a resolution for his expulsion passed by not less than two-thirds of the members present and voting at a special general meeting called for the purpose, provided that the member concerned—

(a) is given at least 21 days' notice in writing of the meeting and the proposed resolution; and

(b) is given a reasonable opportunity of being heard at the meeting.

(2) A member who is expelled from a credit union may appeal against the expulsion to a Judge of the District Court for the district in which the registered office of the credit union is situated.

(3) Notice of an appeal under this section shall be in writing and shall set out the grounds on which the appeal is based; and, on the hearing of the appeal, the District Court may either confirm or cancel the expulsion.

(4) Subsection (3) of section 18 shall apply to an appeal under this section as it applies to an appeal under that section.

(5) A member of a credit union may withdraw from membership of the credit union by giving notice in accordance with the rules of the credit union.

(6) Subject to subsections (7) and (8), all moneys due in respect of withdrawable shares and deposits by a credit union to a member who withdraws or is expelled from the credit union shall be paid to him after deduction of all moneys due from him to the credit union; and the nominal value of non-withdrawable shares held by a member who is expelled (but not one who withdraws) may also be paid to him (after deduction of all moneys so due).

(7) Notwithstanding anything in its rules or in any contract, a credit union may, if it thinks fit, postpone payment of the whole or any part of the moneys to be paid as mentioned in subsection (6) until the end of the period of 60 days beginning on the date of the expulsion or withdrawal of the member concerned.

(8) No payment in respect of shares shall be made by a credit union to a withdrawing or expelled member while any claim due on account of deposits is unsatisfied and no payment of any description shall be made to such a member unless all his liabilities (including contingent liabilities) to the credit union, whether as borrower, guarantor or otherwise, have been fully discharged or otherwise fully provided for by a person other than the credit union.

(9) The withdrawal or expulsion of a member from a credit union shall not operate to relieve that member from any liability to the credit union which exists at the time of the withdrawal or expulsion.

Remedy for debts from members.

20.—(1) All money payable to a credit union by a member of it shall be recoverable summarily as a civil debt by the credit union from the member.

(2) A credit union shall have a lien on the shares, deposits, dividends and interest of any member for any debt due to the credit union from that member, and may set off any sum credited to the member on those shares, deposits, dividends and interest in or towards the payment of that debt.

Nomination of property in credit union.

21.—(1) Subject to subsections (2) to (4), a member of a credit union who is of or over the age of sixteen may, by a written statement signed by him and—

(a) made in any book kept at the credit union's registered office, or

(b) delivered at or sent to that office during his lifetime,

nominate a person or persons to become entitled at his death to the whole, or such part or parts as may be specified in the nomination, of any property in the credit union (whether in savings, loans, insurances or otherwise) which he may have at the time of his death.

(2) The nomination by a member of a credit union under subsection (1) of a person who is at the date of the nomination an officer of the credit union shall not be valid unless that person is a member of the nominator's family.

(3) For the purpose of the disposal of any property which is the subject of a nomination under subsection (1), if at the date of the nominator's death the amount of his property in the credit union comprised in the nomination exceeds £10,000, the nomination shall be valid to the extent of £10,000 but not further or otherwise.

(4) A nomination by a member of a credit union under subsection (1) may be revoked or varied by a subsequent nomination by him under that subsection or by any similar document in the nature of a revocation or variation signed by the nominator and delivered to the credit union's registered office during his lifetime; but such a nomination shall not be revocable or variable by the will of the nominator or by any codicil to his will.

(5) Each credit union shall keep a record—

(a) of the names of all persons nominated by its members under subsection (1) and such other details as will positively identify the nominees; and

(b) of all revocations or variations (if any) of nominations under that subsection.

(6) The marriage of a member of a credit union shall operate as a revocation of any nomination made by him under subsection (1) before his marriage, but if, in ignorance of a later marriage, an officer of the credit union transfers any property of that member in pursuance of such a nomination, the receipt of the nominee shall be a valid discharge to the credit union, and the credit union shall be under no liability to any other person claiming the property.

(7) A nomination under subsection (1) shall be revoked by the death of the nominee before the death of the nominator.

Proceedings on death of nominator.

22.—(1) Subject to subsection (2), where any member of a credit union has made a nomination under section 21 , the board of directors, on receiving satisfactory proof of the death of that member, and if and to the extent that the nomination is valid under subsection (1) of that section, shall in the case of each person entitled under the nomination either transfer to him, or pay him the full value of, the property to which he is so entitled.

(2) Where any of the property comprised in a nomination under section 21 consists of shares in the credit union, subsection (1) shall have effect notwithstanding that the rules of the credit union declare the shares in the credit union not to be transferable; but if the transfer of any shares comprised in the nomination in the manner directed by the nominator would raise the shareholding of any nominee beyond the maximum for the time being permitted in the case of that credit union, the board of directors—

(a) shall not transfer to that nominee more of those shares than will raise his shareholding to that maximum; and

(b) shall pay him or transfer to his deposit account the value of any of those shares not transferred.

(3) Where any sum falls to be paid under subsection (1) or subsection (2) to a nominee under the age of sixteen years, the credit union may pay that sum to either parent, or to a guardian, of the nominee or to any other person of full age—

(a) who will undertake to hold it on trust for the nominee or to apply it for his benefit; and

(b) whom the credit union may think a fit and proper person for the purpose;

and a receipt for that sum signed by that parent, guardian or other person shall be a sufficient discharge to the credit union for all money so paid.

Provision for small payments on death.

23.—(1) If a member of a credit union dies and, at his death, his property in the credit union (whether in savings, loans, insurance or otherwise)—

(a) does not in the whole exceed the maximum relevant for the purposes of this section, and

(b) is not the subject of a nomination under section 21 ,

the board of directors may, without letters of administration or probate of any will, distribute that property among such persons as appears to the board (on such evidence as they consider satisfactory) to be entitled by law to receive it.

(2) The maximum referred to in subsection (1) (a) is £5,000 or such greater amount as may be prescribed.

Payments in respect of mentally incapable persons.

24.—(1) This section applies where, in the case of a member of a credit union or a person claiming through such a member, the credit union's board of directors is satisfied—

(a) after considering medical evidence, that the member or other person is incapable by reason of a mental condition to manage and administer his own property; and

(b) that no person has been duly appointed to administer his property on his behalf, whether by a court, pursuant to Part II of the Powers of Attorney Act, 1996 , or otherwise.

(2) If, in a case where this section applies, it is proved to the satisfaction of the board of directors that it is just and expedient to do so, the credit union may pay the amount of any property belonging to the member or other person (whether in the form of savings, loans, insurances or otherwise) to any person whom the board judges proper to receive it on his behalf and who furnishes to the board such a statement as is referred to in subsection (3); and a receipt for that amount signed by such a person shall be a sufficient discharge to the credit union for any sum so paid.

(3) The statement mentioned in subsection (2) is one which certifies that the proposed recipient—

(a) understands that it is his duty to apply the amount which is proposed to be paid in the best interests of the person to whom it belongs; and

(b) is aware that he may incur civil or criminal liability if he misapplies the whole or any part of that amount; and

(c) is not aware that any other person has authority to receive the whole or any part of that amount, whether by virtue of an order of a court, a power of attorney or otherwise.

Validity of payments to persons apparently entitled.

25.—All payments or transfers made by the board of directors of a credit union under section 23 or section 24 to a person appearing to the board at the time of payment or transfer to be entitled under the section in question shall be valid and effectual against any demand made upon the board or credit union by any other person.

PART III

Operation of Credit Unions

Business and raising of funds

General principles.

26.—(1) A credit union shall not carry on any business or activity which is not appropriate or incidental to the objects for which, in accordance with section 6 , it is formed.

(2) Subject to subsection (1), a credit union may—

(a) acquire property of any description permitted by or under this Act; and

(b) do anything expedient for accomplishing, or conducive to or consequential upon, the objects for which the credit union is formed.

(3) Where any act or other thing is done by a credit union—

(a) which it had no power to do, but

(b) which, if it had been empowered to do, would have been lawfully and effectively done,

that act or thing shall be effective in favour of any person who, relying on that act or thing, dealt with the credit union in good faith.

(4) The Court may, on the application of a member or the Registrar restrain a credit union from doing any act or thing which it has no power to do.

(5) Without prejudice to subsection (4), if a credit union knowingly contravenes subsection (1), it shall be guilty of an offence.

Raising of funds by shares and deposits.

27.—(1) Subject to the following provisions of this Part and any provision of its rules, a credit union may raise funds to be used for its objects—

(a) by the issue to its members of shares in the credit union (which may be withdrawable or non-withdrawable); and

(b) by the acceptance of money on deposit from a member whose shares, at the time of the deposit, have a value of not less than £1,000.

(2) Subject to any dispensation granted under subsection (3), the aggregate liabilities of a credit union in respect of deposits from members shall not at any time exceed 75 per cent. of its aggregate liabilities in respect of shares issued to members; and if a credit union accepts a deposit which would have the effect of causing the limit in this subsection to be exceeded (or to be further exceeded) the credit union shall be guilty of an offence.

(3) If the Registrar considers it expedient to do so in the circumstances of a credit union, he may, on such terms as he thinks proper, grant to the credit union a dispensation from subsection (2).

(4) Subject to subsection (5) and to any provision made by regulations, a member of a credit union—

(a) shall not hold on deposit with the credit union more than £20,000; and

(b) shall not have or claim an interest in shares in the credit union exceeding an amount which, when aggregated with the amount held by the member on deposit with the credit union, exceeds £50,000 or 1 per cent. of the total assets of the credit union, whichever is the greater.

(5) The Minister may from time to time by order increase the financial (including percentage) limits applicable under the preceding provisions of this section.

(6) Nothing in subsection (1)(b) shall render unlawful any deposit accepted before the commencement of this section; and nothing in paragraph (a) of subsection (4) shall render unlawful any deposit which is held by a member of a credit union immediately before that commencement and which exceeds the limit for the time being applicable under that paragraph.

Shares and deposits

Shares: general provisions.

28.—(1) All shares in a credit union shall be of £1 denomination and, subject to the rules of the credit union, may be subscribed for either in full or by periodical or other subscriptions, but no share shall be allotted to a member until it has been fully paid in cash.

(2) A credit union shall not issue to a member a certificate denoting ownership of a share.

(3) All withdrawable shares in a credit union shall have equal rights.

(4) All non-withdrawable shares in a credit union shall have equal rights, and repayments in respect of such shares shall not be capable of being made except as provided by this Act.

(5) Notwithstanding subsection (1), whenever its board of directors so recommends, a credit union may apply any sum standing to the credit of its reserves (other than the statutory reserve) to the payment up of shares, and may issue the shares to members as fully paid-up bonus shares in the proportions to which the members would have been entitled if the sum concerned had been distributed by way of dividend.

Transfer of shares.

29.—(1) A member of a credit union may transfer a share in the credit union to another member so long as—

(a) the number of shares held by that other member does not exceed the limit imposed under this Act; and

(b) if the board of directors so require in any case, the transfer has the approval of the board.

(2) No charge shall be made by a credit union in respect of a transfer of shares by a member, and such a transfer shall entitle the transferee to any dividends in respect of the transferred shares which are unpaid at the date of the transfer.

(3) If, in a case where the board of directors of a credit union have imposed a requirement under subsection (1)(b), the board refuses to approve the proposed transfer of shares in the credit union by a member, the member may appeal against the refusal to a Judge of the District Court for the district in which the registered office of the credit union is situated.

(4) Notice of appeal under subsection (3) shall be in writing and shall set out the grounds on which the appeal is based; and, on the hearing of the appeal, the District Court may either confirm the refusal or direct the board of directors to approve the transfer.

(5) A decision of the District Court on an appeal under subsection (3) shall be final, except that any question of law arising on the appeal may be referred to the Court for its determination; and, by leave of the Court, an appeal shall lie to the Supreme Court from every such determination.

Dividends on shares.

30.—(1) At each annual general meeting of a credit union, a dividend on shares, not exceeding the permitted maximum, may be declared in respect of the preceding financial year by a resolution passed by a majority of the members present and voting.

(2) A dividend so declared shall be paid on all shares in the credit union but, in the case of shares which have been held during part only of the financial year to which the dividend relates, only a proportional part of the dividend shall be paid and, in determining such a proportional part, a part of a month may be disregarded.

(3) The permitted maximum referred to in subsection (1) is ten per cent. of the nominal value of the shares of the credit union or such other percentage of that value as may for the time being be prescribed.

(4) The rate of dividend declared under subsection (1) shall not exceed the rate recommended to the members by the board of directors.

(5) No dividend on shares shall be paid otherwise than out of—

(a) surplus funds in respect of the year in question (as ascertained under section 45 ) which are available for that purpose and have been accumulated after meeting the requirement for the statutory reserve; or

(b) a reserve set aside in previous years to provide for dividends.

Interest on deposits.

31.—(1) Subject to subsections (2) and (3), a credit union may pay interest on deposits at different rates determined from time to time by the board of directors.

(2) The rate of any interest payable at any time by a credit union on deposits of a particular class shall be the same for all deposits of that class.

(3) A credit union shall ensure that the rate of interest payable at any time on deposits of any class does not exceed the rate of return received by the credit union from the employment of its funds, whether in the form of loans or investments.

(4) If a credit union wilfully contravenes subsection (3), it shall be guilty of an offence.

Restrictions on withdrawal of shares and deposits.

32.—(1) Notwithstanding anything in the rules of a credit union or in any contract, a credit union may require not less than 60 days' notice from a member of his intention to withdraw a share in the credit union and a member may not withdraw any shares at a time when a claim due on account of deposits is unsatisfied.

(2) Notwithstanding anything in the rules of a credit union or in any contract, a credit union may require not less than 21 days' notice from a member of his intention to withdraw a deposit.

(3) If a member of a credit union seeks to withdraw a share in or deposit with the credit union at a time when he has an outstanding liability (including a contingent liability) to the credit union, whether as borrower, guarantor or otherwise, that withdrawal shall not be permitted unless—

(a) were the withdrawal to be permitted, the value of the member's savings immediately after the withdrawal would be not less than the amount of his outstanding liability; or

(b) the withdrawal is approved, in accordance with the registered rules, by a majority of the members of the board of directors voting at a meeting of the board;

but no approval may be given under paragraph (b) if, were the withdrawal to be approved, the value of the member's savings immediately after the withdrawal would be less than 25 per cent. of his outstanding liability.

(4) If the Registrar sees fit to do so in the circumstances of a credit union, he may, on such terms as he thinks proper, by notice in writing addressed to the credit union provide that subsection (3) shall apply in relation to the credit union with the substitution of a higher or lower percentage than that for the time being applicable to the credit union under that subsection.

(5) Where a member of a credit union is indebted to the credit union and consents in writing to the credit union acting under this subsection, the credit union may, by way of set-off against the indebtedness, withdraw any of the member's shares or deposits; and such a withdrawal may be made notwithstanding anything in subsections (2) and (3).

Borrowing

Power to borrow.

33.—(1) Subject to its rules, a credit union may borrow money, on security or otherwise, and may issue debentures accordingly, so long as the total amount outstanding in respect of moneys so borrowed does not at any time exceed 50 per cent. of the aggregate of the shares balance and the deposits balance of the credit union.

(2) If a credit union proposes to borrow in accordance with subsection (1) to the extent that the sum of—

(a) the amount (if any) outstanding in respect of moneys so borrowed immediately before the proposed borrowing, and

(b) the amount proposed to be borrowed,

would exceed 25 per cent. of the aggregate specified in subsection (1), the credit union shall give not less than 28 days' notice in writing to the Registrar of its intention to undertake the proposed borrowing.

(3) In calculating, for the purposes of subsection (1) or subsection (2), the total amount outstanding in respect of moneys borrowed by a credit union at any time, a temporary loan obtained by the credit union from its bankers in the ordinary course of business shall be disregarded.

(4) A person dealing with a credit union shall not be obliged to satisfy himself or to inquire whether the limit imposed on the credit union by subsection (1) has been or is being observed; but if a person who lends money to a credit union or takes security in connection with such a loan has, at the time the loan is made or the security taken, actual notice of the fact that that limit has been or is thereby exceeded, the credit union's debt or, as the case may be, the security shall be unenforceable.

(5) Subject to subsection (4), a transaction with a credit union shall not be invalid or ineffectual by reason of the fact that the limit on borrowing in subsection (1) has been or is by the transaction exceeded.

(6) If a credit union—

(a) borrows in excess of the limit imposed by subsection (1), or

(b) fails to give notice in accordance with subsection (2),

the credit union shall be guilty of an offence.

(7) References in this section to borrowing by a credit union do not include the issue of shares to, or the acceptance of deposits from, members of the credit union in accordance with the preceding provisions of this Part.

Charges on assets of a credit union.

34.—(1) An instrument which is executed by a credit union and which creates or is evidence of a charge on any assets of the credit union shall not be a bill of sale for the purposes of the Bills of Sale (Ireland) Acts, 1879 and 1883 or be invalidated by those Acts if the charge is recorded in accordance with subsection (2).

(2) An application for the recording of a charge under subsection (1) shall be made by delivering by post or otherwise to the Registrar, within the period of 21 days beginning with the date of execution of the instrument which creates or is evidence of the charge, or within any extended period allowed under subsection (5)—

(a) a copy of the instrument authenticated in such manner as may be specified by the Registrar and such additional particulars relating to the charge and authenticated as may be so specified; and

(b) such fee as may be prescribed.

(3) The Registrar shall ensure—

(a) that an acknowledgement of every application made for the purposes of this section is issued to the person by whom the application was made; and

(b) that the copy of the instrument included in such an application, a note of any particulars specified by the Registrar and so included and a copy of the acknowledgement of the application issued in pursuance of paragraph (a) are placed in the public file of the credit union;

and an acknowledgement issued under this subsection shall, unless the contrary is proved, be sufficient evidence that any document specified in the acknowledgement was delivered to the Registrar on the date so specified.

(4) Regulations may provide for the giving of notice to the Registrar of any release, discharge or other transaction relating to any charge in respect of which an application has been made for the purposes of this section and for the placing of any such notice on the public file of the credit union concerned.

(5) If, in the case of such an instrument as is mentioned in subsection (1), it appears to the Court, on the application of the credit union which executed the instrument or of any other person claiming the benefit of the instrument, that by reason of inadvertence or other sufficient cause—

(a) an application for the recording of the charge to which the instrument relates was not made within the period of 21 days mentioned in subsection (2); or

(b) any matters were omitted from or were mis-stated in such an application,

the Court may, on such terms as it thinks fit, order that the period for making such an application shall be extended or, as the case may be, that the omission or misstatement shall be rectified.

Loans

Making of loans.

35.—(1) Subject to the following provisions of this Part, a credit union may make a loan to a member for a provident or productive purpose, upon such security (or without security) and terms as the rules of the credit union may provide; but no loan shall be made to a member who is under the age of 18 and neither is nor has been married unless an indemnity is provided by the member's parent or guardian or by a person approved by the board of directors.

(2) A credit union shall not make a loan to a member—

(a) for a period exceeding five years if, were the loan to be made, the total amount outstanding in respect of all loans made by the credit union for periods exceeding five years would then exceed 20 per cent. of the total amount outstanding at that time in respect of all loans made by the credit union; or

(b) for a period exceeding ten years if, were the loan to be made, the total amount outstanding in respect of all loans made by the credit union for periods exceeding ten years would then exceed ten per cent. of the total amount outstanding at that time in respect of all loans made by the credit union; or

(c) in the circumstances specified in subsection (3);

and, for the purposes of this subsection, the period of a loan shall be measured from the date on which the loan or, as the case may be, the first instalment of it is paid.

(3) The circumstances referred to in subsection (2)(c) are those where, were a loan to be made to a member, the amount of the member's outstanding liability (including a contingent liability) to the credit union, whether as borrower, guarantor or otherwise, would exceed whichever is the greater of—

(a) £30,000, and

(b) 1.5 per cent. of the total assets of the credit union.

(4) The total amount outstanding in respect of loans made by a credit union to non-qualifying members shall not exceed ten per cent., or such larger percentage as may be approved by the Registrar, of the total amount outstanding in respect of all loans made by the credit union to its members.

(5) Nothing in subsection (4) shall render unlawful any loan made to a member before the commencement of this section but all loans so made shall be taken into account in the application of the financial (including percentage) limits in the preceding provisions of this section.

(6) The Minister may from time to time by order increase the financial (including percentage) limits applicable under the preceding provisions of this section.

(7) Every application to a credit union for a loan shall be in writing and shall state the purpose for which the loan is required and the security (if any) offered for it.

(8) Subject to its rules, in respect of a loan, a credit union may accept, in addition to other forms of security—

(a) a guarantee by a member, or

(b) a pledge by a member of shares in or deposits with the credit union;

and, where such a guarantee or pledge is accepted, it shall be deemed to be a security for the loan.

(9) Subject to the rules of a credit union—

(a) the credit union may pay a loan to a member in instalments or in one sum; and

(b) a member may repay such a loan in whole or in part on any day on which the office of the credit union is open for business.

(10) A credit union shall not accept from an officer of the credit union a guarantee for a loan to another member unless that other member is the officer's spouse, child or parent.

(11) If a credit union knowingly contravenes any of the provisions of this section, it shall be guilty of an offence.

Approval of loans.

36.—(1) A credit union shall not make a loan to a member unless it is approved in accordance with this section.

(2) Subject to subsections (3) and (5), a loan must be approved, according as the rules of the credit union require—

(a) by such number of members of the board of directors voting by secret ballot at a meeting of the board at which the application for the loan is considered as represents at least two-thirds of those present and a majority of the members of the board as a whole; or

(b) by such number of members of the credit committee present at a meeting of that committee at which the application for the loan is considered as represents at least two-thirds of those present and a majority of the committee members as a whole; or

(c) by a credit officer.

(3) Subject to subsection (5), a loan to a non-qualifying member may not be approved except as set out in subsection (2)(a) and a loan to an officer must be approved by not less than two-thirds of the members of a special committee voting by secret ballot at a meeting at which the application for the loan is considered.

(4) The special committee referred to in subsection (3) shall consist of—

(a) a majority of the board of directors, and

(b) at least one member of the credit committee, and

(c) at least one member of the Supervisory Committee,

but shall not include the applicant for the loan.

(5) Notwithstanding the provisions of subsection (3), a loan to an officer or a non-qualifying member which does not exceed the value of his savings may be approved as mentioned in paragraph (b) or paragraph (c) of subsection (2).

(6) If a credit union knowingly contravenes subsection (1), it shall be guilty of an offence.

Appeal against non-approval of loan.

37.—(1) If an application for a loan which was considered by the credit committee or by a credit officer was not approved under section 36 , the applicant may appeal to an appellate body which, by a decision of such members of the body present at the meeting at which the appeal is considered as represents at least two-thirds of those present and a majority of the body as a whole, may give approval to the loan, overriding the decision of the credit committee or credit officer, as the case may be.

(2) The appellate body referred to in subsection (1) shall consist of—

(a) the board of directors, excluding, where the application for the loan was considered by the credit committee, any director who is a member of that committee; and

(b) the members of the Supervisory Committee.

(3) For the purposes of the consideration of an appeal under this section, the appellate body shall not be regarded as quorate unless there are present a majority of the directors referred to in subsection (2)(a) and at least one member of the Supervisory Committee.

Interest on loans.

38.—(1) A credit union may charge interest on loans made to its members under section 35 subject to the following conditions—

(a) the interest on a loan shall not at any time exceed one per cent. per month on the amount of the loan outstanding at that time;

(b) the interest on a loan shall in every case include all the charges made by the credit union in making the loan;

(c) the rate of interest charged on any class of loans granted at a particular time shall be the same for all loans of the class.

(2) If a credit union knowingly charges or accepts interest on a loan at a rate greater than that permitted under this section, it shall be guilty of an offence and—

(a) all the interest agreed to be paid by the member shall be deemed to have been waived by the credit union; and

(b) any interest paid on the loan shall be recoverable summarily by the member (or his personal representative) as a simple contract debt.

Other transactions

Promissory notes and bills of exchange.

39.—(1) A promissory note or bill of exchange shall be deemed to have been made, accepted or endorsed on behalf of a credit union if made, accepted or endorsed in the name of the credit union by a person acting under its authority.

(2) Where no such authority as is referred to in subsection (1) exists, the Registrar may, if he thinks fit, appoint a person or persons to act on behalf of the credit union; and any person or persons so appointed shall have the like powers under subsection (1) as if acting under the authority of the credit union.

Contracts.

40.—(1) Contracts may be made, varied or discharged on behalf of a credit union as follows:

(a) a contract which, if made between individuals, would be by law required to be in writing under seal may be made on behalf of the credit union in writing under the common seal of the credit union;

(b) a contract which, if made between individuals, would be by law required to be in writing, signed by the parties to be charged with the contract, may be made on behalf of the credit union in writing by any person acting under the express or implied authority of the credit union;

(c) a contract which, if made between individuals, would by law be valid although made by parol only, and not reduced into writing, may be made by parol on behalf of the credit union by any person acting under the express or implied authority of the credit union;

(d) a contract made according to this subsection may be varied or discharged in the same manner in which it is authorised by this section to be made and a contract under seal which, if made between individuals, might be varied or discharged in writing not under seal, signed by any person interested in the contract, may be similarly varied or discharged in writing not under seal on behalf of the credit union, signed by any person acting under the express or implied authority of the credit union.

(2) A signature purporting to be made by a person holding any office in a credit union attached to a writing by which any contract purports to be made, varied or discharged by or on behalf of the credit union shall, unless the contrary is proved, be taken to be the signature of a person holding that office at the time when the signature was made.

(3) Where authority no longer exists for the discharge of a credit union's obligations under subsection (1), the Registrar may, if he thinks fit, appoint a person to act on behalf of the credit union, and a person so appointed shall have the like powers to make, vary or discharge contracts on behalf of the credit union as if acting under its authority.

(4) A contract which may be or have been made, varied or discharged according to the provisions of this section shall be effectual in law and bind the credit union and its successors and all other parties to the contract.

Acquisition, holding and disposal of land.

41.—(1) A credit union may acquire and hold in its own name any land for the purpose of conducting its business on the land (including erecting a building on the land for that purpose) but for no other purpose.

(2) A credit union may dispose of any land held by it and, where it does so—

(a) no person shall be bound to inquire as to the authority for any dealing with the land by the credit union; and

(b) a receipt of the credit union shall be a discharge for all money arising from or in connection with any dealing with land by it.

(3) For the purposes of subsection (2) (but not subsections (4) and (5)), a disposal of land held by a credit union includes the creation, out of the interest held by the credit union, of a lease, sub-lease or lesser interest.

(4) If a building held by a credit union entirely ceases to be occupied for the purposes of the business of the credit union, the credit union shall dispose of its interest in that building as soon as it is practicable to do so.

(5) If the Registrar is of the opinion that any building or other land held by a credit union is not in the best interest of the credit union, he may direct the credit union to dispose of its interest in it.

(6) A credit union which—

(a) holds any land contrary to subsection (1), or

(b) fails to comply with a direction under subsection (5),

shall be guilty of an offence.

(7) Section 3 (3) shall not apply to a direction under subsection (5).

Receipt for repayment of secured debt.

42.—On payment of all money intended to be secured to a credit union on the security of any property, the debtor or his successor in title or personal representatives shall be entitled to a receipt in the form set out in the Second Schedule , or in a form to substantially the like effect.

Investments etc.

Investments.

43.—(1) Subject to any provision made by regulations, a credit union may invest any of its funds which are surplus to its operating requirements and are not immediately required for the purposes of the credit union—

(a) in securities in which trustees are for the time being authorised by law to invest;

(b) in the shares of or deposits with or loans to a credit union;

(c) in the shares of a society registered under the Industrial and Provident Societies Acts, 1893 to 1978; or

(d) in such other manner as may be prescribed, being a manner appearing to the Minister to be beneficial to the credit union.

(2) In so far as any such funds of a credit union as are referred to in subsection (1) are not either—

(a) invested in accordance with subsection (1), or

(b) kept in cash in the custody of officers of the credit union,

those funds shall be kept by the credit union on current account with, or otherwise on loan to a credit institution.

(3) Where any funds of a credit union are on loan to an institution which ceases to be a credit institution, the credit union shall take all practicable steps to call in and realise the loan within the period of three months from the time when the institution so ceased or, if that is not possible, as soon after the end of that period as possible.

(4) Nothing in this section shall prevent one credit union from making a temporary loan to another.

(5) If, at the commencement of this section, a credit union holds any investments which were permitted before that commencement but do not fall within paragraphs (a) to (d) of subsection (1), those investments shall be disposed of—

(a) as soon as a disposal can be made without incurring a loss; and

(b) in any event not later than the second anniversary of that commencement or such later date as the Registrar may permit;

but, prior to such a disposal, the investments shall continue to be regarded as lawful.

(6) If, at the commencement of this section, a credit union holds any investments which were not permitted before that commencement but which fall within any of paragraphs (a) to (d) of subsection (1), these investments shall be regarded as having been validly made by virtue of this section.

(7) If a credit union knowingly contravenes any of the provisions of this section, it shall be guilty of an offence.

Special fund for social, cultural etc. purposes.

44.—(1) By a resolution passed by a majority of its members present and voting at a general meeting, a credit union may establish a special fund to be used by the credit union for such social, cultural or charitable purposes (including community development) as have been approved, either generally or specifically, by a similar resolution; and any such special fund shall be maintained separately from the rest of the credit union's finances.

(2) Subject to subsection (4), moneys may be paid into a special fund established by a credit union under this section only out of the annual operating surplus of the credit union; and no moneys may be so paid unless the directors are satisfied—

(a) that adequate provision has been made out of the surplus in question to cover all current and contingent liabilities and to maintain proper reserves; and

(b) that the payment of the moneys into the special fund will not affect the financial stability of the credit union.

(3) Subject to subsection (5), the amount of moneys which may be paid as mentioned in subsection (2) out of the annual operating surplus of any year shall not exceed 0.5 per cent. of the value of the credit union's assets as shown in the accounts for the most recent financial year ending before the date of the payment.

(4) In respect of the financial year in which the special fund is established, there may be paid into the special fund (in addition to any amount paid as mentioned in subsection (2)) an amount not exceeding 2.5 per cent. of the accumulated reserves of the credit union, excluding the statutory reserve.

(5) If, by a resolution passed by not less than two-thirds of the members of the credit union present and voting at a general meeting called for the purpose, a credit union resolves to increase the percentage applicable to it under subsection (3) to a percentage to which the Registrar has consented in writing, that subsection shall have effect accordingly.

(6) Where a credit union has established a special fund under this section, the social, cultural or charitable purposes for which it is to be used may be varied by a further resolution passed as mentioned in subsection (1).

(7) If at any time—

(a) the board of directors make a recommendation in writing to the members of a credit union that it is appropriate to wind up a special fund established under this section, and

(b) a resolution for winding up the special fund is passed by a majority of the members of the credit union present and voting at a general meeting,

the moneys standing to the credit of the special fund shall be transferred to the general funds of the credit union and the special fund shall cease to exist.

Statutory reserve.

45.—(1) A credit union shall establish a reserve (to be known as its “statutory reserve”) by allocating in respect of each financial year not less than ten per cent. of the surplus funds of the credit union for that purpose.

(2) In ascertaining the surplus funds of a credit union in respect of a financial year—

(a) provision shall first be made for all operating expenses of the credit union in that year, together with any necessary provision for depreciation; but

(b) no provision shall be made in respect of amounts to be paid by way of dividends.

(3) A credit union shall not capitalise its statutory reserve by way of bonus shares or distribute it by way of dividends.

(4) Notwithstanding the provisions of subsection (1), whenever the board of directors of a credit union so recommend to the members and a majority of the members present and voting at a general meeting by resolution so approve,

(a) the allocation to its statutory reserve may be increased; or

(b) if its statutory reserve at the end of the financial year in question equals or exceeds 15 per cent. of the sum of the shares balance and the deposits balance, the allocation may be reduced.

Savings protection scheme.

46.—(1) A credit union may incur expenditure in participating in a savings protection scheme which is approved by the Registrar.

(2) In this Act a “savings protection scheme” means a scheme established to protect, in whole or in part, the savings of members of a credit union in the event of insolvency or other financial default on the part of the credit union and, for this purpose, “savings” includes shares, deposits and all other funds held by a credit union on behalf of its members.

(3) It shall be a condition of the approval of a savings protection scheme under subsection (1) that sections 90 and 91 shall apply in relation to it as they apply in relation to a credit union.

(4) Where a credit union participates in a savings protection scheme approved under subsection (1), authorised representatives of the scheme shall be entitled to inspect the books of the credit union.

Insurance against fraud of officers etc.

47.—(1) A credit union shall at all times maintain in force, in respect of each financial year, a policy of insurance which complies with any prescribed requirements and which insures the credit union in respect of loss suffered or liability incurred by reason of the fraud or other dishonesty of its officers or voluntary assistants.

(2) If a credit union fails to comply with subsection (1), it shall be guilty of an offence.

(3) By 1st December in each financial year, a credit union shall submit evidence to the Registrar of its cover in respect of the insurance required by this section.

Provision of additional services to members

Power to provide additional services.

48.—(1) Subject to the following provisions of this Part, a credit union may provide, as principal or agent, additional services of a description that appears to the Registrar to be of mutual benefit to its members.

(2) In this section and the following provisions of this Part, “additional services”, in relation to a credit union, means any services other than those—

(a) for which provision is made by the preceding provisions of this Part; or

(b) which are prescribed for the purposes of this section as being services the provision of which appears to the Minister to involve no risk to the assets of the credit union or the funds of its members;

and regulations made for the purposes of paragraph (b) may make the exclusion of any services from being additional services conditional on compliance with such conditions as may be prescribed.

(3) Nothing in this section or the following provisions of this Part affects the operation of any enactment which is not contained in this Act and which, in whole or in part, relates to the provision of financial or other services of any description.

(4) In order to enable a credit union to provide additional services of any description—

(a) the credit union must adopt a decision to provide additional services of that description by a resolution passed by not less than two-thirds of the members present and voting at an annual general meeting or at a special general meeting called for the purpose of considering the resolution;

(b) the provision of the services must be approved by the Registrar in accordance with section 49 and the services must be provided in accordance with the terms and conditions of the approval; and

(c) the rules of the credit union must specify the provision of services of that description among the objects of the credit union.

(5) Notice shall be given of a resolution under subsection (4)(a) in accordance with the rules of the credit union or, if the rules do not make special provision as to notice of such a resolution, the like notice shall be given as is required by the rules for a resolution to amend the rules; and notice of the resolution shall contain or be accompanied by a statement giving—

(a) a description of the services which it is proposed to provide;

(b) an assessment of the financial and other implications for the credit union of the provision of those services; and

(c) details of such other matters as the Registrar may by notice in writing require to be brought to the attention of the members of the credit union concerned.

(6) Before giving notice of a resolution as mentioned in subsection (5), a credit union shall consult the Registrar and the Registrar shall give a preliminary view as to whether and to what extent the provision of the service would be likely to be approved by him; but the giving of such a preliminary view shall not prejudice the decision of the Registrar under section 49 (3).

(7) The Registrar may, by directions, specify such requirements as he considers necessary for credit unions providing additional services; and different requirements may be so specified in relation to different descriptions of additional services.

(8) A credit union shall not be able or, as the case may be, shall cease to be able to provide additional services of a description to which requirements under subsection (7) apply if—

(a) the credit union does not satisfy those requirements; or

(b) within the period of 12 months beginning on the date on which approval for the provision of the services is given under section 49 , the credit union does not begin to provide those services;

but, if a credit union ceases to comply with any of those requirements, the cessation shall not, of itself, impose an obligation to dispose of any property or right acquired in connection with the provision of the additional services concerned.

The Registrar's approval of provision of additional services.

49.—(1) An application by a credit union for the approval of the provision of additional services of any description (in this section referred to as an “approval application”) shall be made to the Registrar in such manner as he may by rules direct, and shall be accompanied by such information as may be so specified.

(2) Without prejudice to the generality of the powers of the Registrar under subsection (1), an approval application shall include information about—

(a) the protection of members for whom the services are to be provided from conflicts of interest that might otherwise arise in connection with the provision of the services;

(b) the provision proposed for securing that adequate compensation is available to those members in respect of negligence, fraud or other dishonesty on the part of officers or voluntary assistants of the credit union in connection with the provision of the services;

(c) the extent to which and the manner in which the provision of the services will require the involvement of persons with particular qualifications or experience;

(d) the cost of providing the services;

(e) the income expected to accrue from any charges made for the services; and

(f) the credit union's proposed principal, in a case where the approval application relates to the provision of services by the credit union as agent for another;

and, where an approval application relates to the provision of additional services of more than one description, the information referred to above shall be given separately in respect of each description of services.

(3) Having considered an approval application (which complies with subsections (1) and (2)), the Registrar shall give notice, either—

(a) granting approval;

(b) refusing to grant approval; or

(c) granting approval subject to whatever conditions (including restrictions or exclusions) he considers appropriate;

and the Registrar shall not grant an approval application in respect of any description of additional services unless he is satisfied that the resolution required by section 48 (4) (a) in relation to services of that description has been passed.

(4) In making his decision on an approval application, the Registrar shall have regard to the interests of the public and of the members and creditors of the credit union, to the orderly and proper regulation of the business of the credit union and to such other considerations as he thinks proper.

(5) Subject to subsection (6), within four months of the date on which he receives an approval application, the Registrar shall either notify the credit union of his decision on the application or require the credit union to supply to him such additional information as he considers necessary to enable him to reach a decision and, where the Registrar requires the provision of such additional information, he shall notify the credit union of his decision on the approval application not later than four months from the date of his receipt of that additional information.

(6) Where an approval application relates to the provision of services by the credit union as agent (and not also as principal), subsection (5) shall have effect with the substitution for any reference to four months of a reference to two months.

(7) Without prejudice to the generality of subsection (3)(c), the conditions which the Registrar may impose in granting an approval application may, in particular, include provisions about—

(a) the amount of funds that may be applied by the credit union to the services;

(b) whether the credit union may act as principal or agent in providing the services;

(c) the period during which the services may be provided;

(d) limits on any guarantees, bonds, contracts of suretyship or indemnities given or entered into by the credit union;

(e) whether and to what extent the approval of the Registrar is to be obtained in respect of particular proposals;

(f) the qualifications required to be held by officers or voluntary assistants of the credit union providing the services;

(g) the avoidance of conflicts of interest;

(h) the charges to be made in relation to the provision of any services;

(i) the preparation of accounts in respect of services being provided;

and different conditions may be so imposed in relation to different descriptions of additional services.

(8) If, before the date on which this section comes into force, a credit union was providing a service which is an additional service, that service shall cease unless, within the period of twelve months after that date, the credit union makes an approval application with respect to that service and complies with subsections (4)(a), (5) and (6) of section 48 ; and, where such an application is made, the credit union may by virtue of this subsection continue to provide that service during that period.

Supplementary provisions as to Registrar's functions.

50.—(1) In the exercise of his powers under sections 48 and 49 and this section, the Registrar may at any time consult the Advisory Committee and such other bodies as appear to him to be expert or knowledgeable in matters relating to credit unions.

(2) Without prejudice to the generality of subsection (1), the Registrar may commission an independent assessment of the capacity of a credit union to provide any or each description of the additional services in respect of which it has made an approval application; and, if the Registrar so directs, the credit union shall defray the costs of such an assessment.

(3) If it appears to him appropriate to do so, the Registrar may at any time by notice—

(a) withdraw an approval granted under section 49 ;

(b) revoke or vary any conditions imposed on such an approval; or

(c) impose new conditions on such an approval;

but any such action by the Registrar shall not require the disposal of any property or right already acquired.

(4) In this section “approval application” has the same meaning as in section 49 .

Requirements applicable to credit unions providing additional services.

51.—(1) A credit union shall not make or offer to make a loan to a member subject to a condition that any additional services which the member may require (whether or not in connection with the loan) shall be provided by (or through the agency or assistance of) the credit union.

(2) Where, in connection with a loan by a credit union, any additional services are made available by a credit union, the credit union shall not make those services available except on terms which distinguish the consideration applicable to each service which is so made available.

Review of Registrar's decisions by Court.

52.—(1) If a credit union is aggrieved by a decision of the Registrar—

(a) under section 49 (3)(b) to refuse to grant approval, or

(b) under section 50 (3)(a) to withdraw an approval granted under section 49 , or

(c) under subsection 50(3)(b) to vary any condition imposed on such an approval, or

(d) to impose any condition on such an approval (whether at the time the approval is granted or later by virtue of section 50 (3)(c)),

the credit union may apply to the Court for a review of the Registrar's decision.

(2) If, on an application under subsection (1), the Court considers that the decision of the Registrar to which the application relates should not be confirmed, the Court may give such directions as it thinks appropriate (whether to the Registrar or otherwise) for the purpose of resolving the matter.

PART IV

Management of Credit Unions

Directors

Board of directors.

53.—(1) A credit union shall have a board of directors which shall have responsibility for the general control, direction and management of the affairs, funds and records of the credit union.

(2) The number of directors of a credit union shall be specified in the registered rules and shall be—

(a) not less than seven;

(b) not more than fifteen; and

(c) an odd number.

(3) The first board of directors of a credit union shall be elected from among the members by secret ballot at the organisation meeting of the credit union and, subject to section 57 (4), subsequent vacancies on the board shall be filled from among the members by secret ballot at an annual general meeting.

(4) The term of office of a director—

(a) shall begin at the conclusion of the general meeting at which he is elected;

(b) shall not extend beyond the third subsequent annual general meeting; and

(c) subject to paragraph (b) and subsection (5), shall be such as is determined in accordance with the registered rules;

but, except where the registered rules otherwise provide, a retiring director shall be eligible for re-election.

(5) At each annual general meeting the number of directors whose term of office expires shall, as near as possible, be the same.

(6) Neither a body corporate nor a person who is under the age of 18 may be a director of a credit union.

Directors: procedural provisions.

54.—(1) The board of directors shall meet as often as may be necessary for the proper discharge of its business provided that—

(a) the board shall endeavour to meet once a month but, as a minimum, shall hold not less than ten meetings in any year; and

(b) the interval between any two meetings of the board shall not be greater than six weeks.

(2) The secretary of a credit union shall keep minutes of all meetings of the board of directors.

(3) Subject to section 53 (6) and subsection (4), the board of directors may at any time and from time to time appoint a member of the credit union (including a former director) to be a director to fill a casual vacancy.

(4) A director appointed under subsection (3) shall hold office from the date of the appointment to the next following annual general meeting of the credit union or, if it is earlier, the next special general meeting at which an election is held for members of the board of directors.

(5) Where the secretary of a credit union becomes aware that all the directors of the credit union intend to resign on the same date, he shall give written notice of their intention to the Registrar and the Supervisory Committee.

(6) If the secretary of a credit union fails to comply with subsection (5), he shall be guilty of an offence.

Functions of board of directors.

55.—Without prejudice to the generality of section 53 (1), the board of directors shall have the following functions—

(a) the making of decisions on applications for loans;

(b) the fixing from time to time of the amount of the surety bond required by section 73 in respect of any officer of the credit union who has custody of funds or other property of the credit union;

(c) the fixing from time to time of the rate of interest to be charged on loans to members, and of the rate of interest to be paid on deposits;

(d) the recommendation to members, for approval, of dividends to members;

(e) the fixing from time to time of the maximum numbers of shares in the credit union which may be held by a member and of the maximum amount that a member may deposit with the credit union, such limits to apply equally to all members;

(f) the fixing from time to time of the maximum amount which may be on loan at a particular time to a member in respect of loans, such limits to apply equally to all members;

(g) the making of decisions in respect of the investment of funds of the credit union;

(h) the employment and the terms of employment of such person or persons as the board of directors consider necessary for the purposes of the credit union;

(i) the purchase, sale, renovation, repair and alteration of property for the credit union;

(j) the borrowing of money by the credit union;

(k) the designating of depositories for the funds of the credit union, and signatories to cheques, drafts or similar documents drawn on an account of the credit union;

(l) the removal from office of an officer or committee member, except members of the Supervisory Committee, for failure to perform his duties;

(m) the submitting of the accounts of the credit union for audit;

(n) the making of arrangements for the annual general meetings, meetings of the board of directors and other meetings as deemed necessary from time to time;

(o) the convening of a special general meeting in accordance with section 79 whenever they think fit;

(p) the sanctioning of expense payments whether by way of expense claim or invoice;

(q) the taking, in accordance with the instructions of the members at a general meeting of the credit union, of any lawful action not inconsistent with the registered rules; and

(r) appointing such committees or officers as the board of directors considers desirable or necessary to assist it in the proper discharge of the business of the credit union.

Removal of director from office.

56.—(1) Subject to subsection (2), a credit union may, by resolution of a majority of the members present and voting at a special general meeting called for that purpose, remove a director from office.

(2) The secretary shall, not less than 21 days before the date of the special general meeting at which it is proposed to move a resolution referred to in subsection (1), give written notice of the meeting to the director concerned.

(3) Where notice is given of such a resolution as is mentioned in subsection (1) and the director concerned makes in relation to it representations in writing to the credit union (not exceeding a reasonable length) and requests their notification to the members of the credit union, the credit union shall, subject to subsection (5), (unless the representations are received by it too late to do so)—

(a) in any notice of the proposed resolution given to members of the credit union, state the fact of the representations having been made; and

(b) send a copy of the representations to every member of the credit union to whom notice of the meeting is sent (whether before or after the credit union receives the representations).

(4) Subject to subsection (5), and whether or not copies of any representations made by him have been sent as mentioned in subsection (3), the director concerned may require that, without prejudice to his right to be heard orally, the representations made by him shall be read out at the special general meeting.

(5) Subsections (3) and (4) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the Registrar is satisfied that compliance with the subsections would diminish substantially public confidence in the credit union or that the rights conferred by them are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.

(6) A vacancy arising from the removal of a director under this section shall be filled in accordance with the provisions of section 54 (3).

Directors: supplemental provisions.

57.—(1) A register of directors shall be kept by the secretary of the credit union and signed by all the directors of a credit union each year after the annual general meeting of a credit union or, in the case of a director appointed to fill a casual vacancy, after his appointment.

(2) In the event that the number of directors of a credit union falls to less than half the number specified in the registered rules, the secretary of the credit union shall forthwith notify the Registrar and the Supervisory Committee of the credit union.

(3) The acts of a director of a credit union shall be valid notwithstanding any defect in the appointment of the director which may be subsequently discovered.

(4) Where any of the following events occurs—

(a) the secretary of the credit union has given notice under section 54 (5) that all the directors of the credit union intend to resign on the same date,

(b) all the directors have been removed or suspended in accordance with section 96 (1), or

(c) there is no board of directors,

the Supervisory Committee shall convene a special general meeting of the credit union, within one month of the occurrence of the event in question, to elect a board of directors.

(5) If the special general meeting referred to in subsection (4) is not convened in accordance with the provisions of that subsection, the Registrar may convene such a special general meeting under section 92 (1)(b).

Supervisory Committee

Supervisory Committee.

58.—(1) A credit union shall have a Supervisory Committee which shall consist of three or five members and shall have the general duty of overseeing the performance by the directors of their functions.

(2) The first Supervisory Committee of a credit union shall be elected by secret ballot at the organisation meeting and, subject to section 62 (4), subsequent vacancies on the Committee shall be filled by secret ballot at an annual general meeting.

(3) The Supervisory Committee shall appoint one of their number as secretary of the Committee.

(4) The term of office of a member of the Supervisory Committee—

(a) shall begin at the conclusion of the general meeting at which the member is elected;

(b) shall not extend beyond the third subsequent annual general meeting; and

(c) subject to paragraph (b) and subsection (5), shall be such as is determined in accordance with the registered rules;

but, except where the registered rules otherwise provide, a retiring member of the Supervisory Committee shall be eligible for re-election or appointment.

(5) The rules for retirement from the Supervisory Committee shall be as follows:

(a) where the Committee consists of three members, one shall retire at each annual general meeting;

(b) where the Committee consists of five members, two shall retire at each annual general meeting;

(c) subject to paragraph (d), the members to retire at any time shall be those who have served longest since they were last elected; and

(d) as between members who were last elected on the same day, the member (or members) to retire shall be determined by agreement or, in default of agreement, by the drawing of lots.

(6) None of the following shall be a member of a Supervisory Committee of a credit union—

(a) a member of the credit union who is under the age of 18;

(b) a director of the credit union;

(c) an employee of the credit union (full or part-time);

(d) a person who performs any other function in the credit union;

(e) a body corporate.

Supervisory Committee: procedural provisions.

59.—(1) A Supervisory Committee shall—

(a) hold at least one meeting in each month;

(b) hold, at least four times in a year, a meeting with the board of directors to review the directors' performance of their functions;

(c) submit, in advance of a meeting referred to in paragraph (b), a written report to the board of directors on the directors' performance of their functions.

(2) Members of the Supervisory Committee shall have the right to attend all meetings of the board of directors and all meetings of committees of the credit union.

(3) A Supervisory Committee may notify the Registrar of any concern it may have as to the proper conduct of the credit union following a unanimous vote at a meeting of the Committee called for the purpose of considering such a notification.

(4) If a casual vacancy arises in the membership of a Supervisory Committee, then, within one month of the vacancy arising, the Committee shall appoint a member of the credit union (who may, if the Committee thinks fit, be a former member of the Committee) to fill the vacancy; and the member so appointed shall hold office until the next general meeting at which an election is held for members of the Supervisory Committee.

(5) Where the secretary of the Supervisory Committee becomes aware that all the members of the Supervisory Committee intend to resign on the same date, he shall give written notice of their intention to the Registrar and the board of directors.

(6) If the secretary of the Supervisory Committee fails to comply with subsection (5), he shall be guilty of an offence.

Functions of Supervisory Committee.

60.—(1) Without prejudice to the generality of section 58 (1), the Supervisory Committee of a credit union shall—

(a) keep minutes of meetings held by it;

(b) make or cause to be made, not less than twice in the period before the next annual general meeting, an examination of the books and documents of the credit union and that examination shall include an inspection of securities, cash accounts and all records relating to loans;

(c) make, or cause to be made, once in the period before the next annual general meeting, a comparison between the pass-book or statement of account of a random sample of at least 10 per cent. of all the members of the credit union and the appropriate records of the credit union;

(d) ascertain that all actions and decisions of the officers relating to the affairs of the credit union are in accordance with law and the registered rules;

(e) furnish a written report on the result of its examinations and enquiries under this section to the next annual general meeting or, if it thinks fit, to a special general meeting.

(2) The Supervisory Committee shall have access, at all times, to the books and documents of the credit union.

Supervisory Committee: removal from office.

61.—(1) Subject to subsection (2), a credit union may, by resolution of a majority of the members present and voting at a special general meeting called for that purpose, remove a member of the Supervisory Committee from office.

(2) The secretary of the credit union shall, not less than 21 days before the date of the special general meeting at which it is proposed to move a resolution referred to in subsection (1), give written notice of the meeting to the member concerned.

(3) Where notice is given of such a resolution as is mentioned in subsection (1) and the member of the Supervisory Committee concerned makes in relation to it representations in writing to the credit union (not exceeding a reasonable length) and requests their notification to the members of the credit union, the credit union shall, subject to subsection (5), (unless the representations are received by it too late to do so)—

(a) in any notice of the proposed resolution given to members of the credit union, state the fact of the representations having been made; and

(b) send a copy of the representations to every member of the credit union to whom notice of the meeting is sent (whether before or after the credit union receives the representations).

(4) Subject to subsection (5), and whether or not copies of any representations made by him have been sent as mentioned in subsection (3), the member of the Supervisory Committee concerned may require that, without prejudice to his right to be heard orally, the representations made by him shall be read out at the special general meeting.

(5) Subsections (3) and (4) shall not apply if, on the application either of the credit union or of any person who claims to be aggrieved, the Registrar is satisfied that compliance with the subsections would diminish substantially public confidence in the credit union or that the rights conferred by them are being, or are likely to be, abused in order to secure needless publicity for defamatory matter.

(6) A vacancy arising from the removal of a member of a Supervisory Committee under this section shall be filled in accordance with the provisions of section 59 (4).

Supervisory Committee: supplemental provisions.

62.—(1) A register of the members of the Supervisory Committee shall be kept by the secretary of the credit union and shall be signed by each member of the Supervisory Committee after an annual general meeting or, in the case of a member appointed to fill a casual vacancy, after his appointment.

(2) In the event that the number of members of the Supervisory Committee falls to less than half the number specified in the registered rules, the secretary of the Supervisory Committee shall forthwith notify the Registrar and the board of directors.

(3) The acts of a member of the Supervisory Committee of a credit union shall be valid notwithstanding any defect in the election or appointment of the member which may subsequently be discovered.

(4) Where any of the following events occurs—

(a) the secretary of the Supervisory Committee has given notice that all the members of the Supervisory Committee intend to resign on the same date;

(b) all the members of the Supervisory Committee have been removed or suspended in accordance with section 96 (1); or

(c) there are no members of the Supervisory Committee,

the board of directors shall convene a special general meeting of the credit union, within one month of the occurrence of the event in question, to elect a Supervisory Committee.

(5) If the special general meeting referred to in subsection (4) is not convened in accordance with the provisions of that subsection, the Registrar may convene such a special general meeting under section 92 (1)(b).

(6) A credit union shall meet all such expenses as may be reasonably incurred by its Supervisory Committee in carrying out its function.

Officers

Officers: principal posts.

63.—(1) At a meeting of the board of directors of a credit union—

(a) which is held immediately after the organisation meeting, an annual general meeting or special general meeting at which an election is held for members of the board of directors, and

(b) which is chaired by a member of the Supervisory Committee,

the board shall elect by secret ballot directors to fill such of the principal posts in the credit union as are then vacant; and, for the purposes of this section, the principal posts in a credit union are the posts of chairman (or president), vice-chairman (or vice-president), treasurer and secretary.

(2) The registered rules shall ensure that the term of office of the holder of a principal post shall come to an end not later than the third annual general meeting after the meeting at which he is elected to that post; and, unless the registered rules provide otherwise, a person who has been the holder of a principal post shall not be eligible for re-election to that post until after the expiry of one year since he last held it.

(3) In the event of a casual vacancy in a principal post, the board of directors may by secret ballot elect a director to hold that post until the next meeting at which, in accordance with subsection (1), an election should be held to fill any vacancy in the principal posts.

(4) Without prejudice to subsection (3), if a principal post falls vacant or for any other reason there is no holder of a principal post, anything that is required or authorised to be done by the holder of that post may be done by a director authorised in that behalf by the board of directors.

(5) The chairman (or president) or secretary of a credit union shall notify the Registrar in writing of the election, appointment, retirement, removal or resignation from office of a chairman (or president), vice-chairman (or vice-president), director, secretary, treasurer or committee member and the notification shall—

(a) be made within fourteen days of the election, appointment, retirement, removal or resignation; and

(b) state the full name and address of the officer concerned.

(6) The chairman (or president) or secretary of a credit union who fails to make a notification referred to in subsection (5) shall be guilty of an offence.

Functions of treasurer.

64.—(1) The treasurer of a credit union shall act as the managing director of the credit union and shall, not later than the last day of each month, submit to the board of directors (in unaudited form and described as such) a financial statement showing—

(a) the income and expenditure of the credit union for the period from the beginning of the current financial year to the end of the preceding month; and

(b) a balance sheet for the same period.

(2) Subject to such limitations and controls as may be imposed by the board of directors, the treasurer of a credit union shall—

(a) ensure that proper systems of internal control are kept by the credit union;

(b) have custody of all funds, securities and documentation relating to the assets of and other assets of the credit union;

(c) provide, or cause to be provided, and maintain full and complete records of all assets, liabilities, income and expenditure of the credit union;

(d) prepare, or cause to be prepared, and submit to the auditor of the credit union such financial reports and returns required by the auditor;

(e) ensure that all cash is deposited in accordance with the instructions of the board of directors;

(f) report to the members of the credit union at the annual general meeting of the credit union; and

(g) in the exercise of his functions, comply with any instruction of the board of directors.

(3) With the approval of the board of directors, the treasurer may at any time delegate any function to a director who, in the opinion of the treasurer, is capable of discharging the function in a proper and competent manner.

(4) A director to whom a function has been delegated in accordance with subsection (3) (in this Part referred to as an “assistant treasurer”), shall comply with any instruction, limitation or control imposed by the treasurer and approved by the board of directors.

(5) Neither the treasurer nor an assistant treasurer shall be eligible for membership of any of the following committees of a credit union—

(a) the credit committee;

(b) the credit control committee;

(c) the membership committee.

(6) Nothing in this section affects the power of a credit union to appoint, in addition to the treasurer, a manager who is not a director and whose functions are defined by the board of directors.

Credit officer and credit control officer.

65.—(1) The board of directors may—

(a) appoint a person, other than the treasurer, an assistant treasurer or a member of the credit control committee or a credit control officer, as a credit officer to work under the supervision of the credit committee; and

(b) delegate to the credit officer the power to approve credit—

(i) that is fully secured by the shareholding of the borrowing member or to an amount in excess of that shareholding; or

(ii) that qualifies as emergency credit within such definitions and limitations as to amount, the terms of repayment and security required for emergency credit as may be established in writing by the board of directors;

and the amount of the excess referred to in paragraph (b)(i), shall be determined from time to time by the board of directors.

(2) A record of each application for credit which has or has not been approved shall be furnished by the credit officer to the credit committee within seven days of receipt of the application.

(3) Where there has been a delegation of power to approve credit under subsection (1)(b), a credit officer shall inquire into the character and financial circumstances of an applicant for credit and the security offered, if any, in order to—

(a) ascertain the applicant's ability to repay a loan in accordance with its terms, and

(b) determine whether the loan is for a provident or productive purpose.

(4) The board of directors may appoint a person, other than the treasurer, an assistant treasurer, member of the credit committee or a credit officer, as a credit control officer to assist the credit control committee and work under its supervision and control.

Officers: suspension and removal by Supervisory Committee.

66.—(1) If the Supervisory Committee of a credit union considers that an officer who is not an employee has taken any action or decision which, in the opinion of the Committee, is not in accordance with the law or the registered rules, then, after consulting the Registrar, the Committee may either—

(a) suspend the officer by a unanimous vote of all the members of the Committee taken at a meeting of the Committee called for the purpose of considering his suspension; or

(b) convene a special general meeting of the credit union to consider whether to remove the officer in the light of the action or decision taken by him;

but no action shall be taken under this subsection without the officer concerned being given an opportunity to be heard by the members of the Supervisory Committee.

(2) If an officer who has been suspended by the Supervisory Committee in accordance with subsection (1)(a) does not resign within seven days of the vote by the Committee, the Committee shall convene, for a date not more than 21 days after the expiry of those seven days, a special general meeting—

(a) for the purpose of reviewing the suspension; and

(b) to consider whether to remove the officer in the light of the action or decision taken by him.

(3) Without prejudice to the requirements of section 80 , not less than 10 days before—

(a) the date of a meeting of the Supervisory Committee called as mentioned in subsection (1)(a), and

(b) the date of a special general meeting convened as mentioned in subsection (1)(b) or subsection (2),

the Supervisory Committee shall give written notice of the meeting to the Registrar and to the officer concerned.

(4) At a special general meeting held under this section, the members of the credit union, according to the purpose or purposes for which the meeting was convened, may, by secret ballot—

(a) ratify the suspension of the officer concerned and remove him from office;

(b) rescind the suspension of that officer; or

(c) remove that officer from office;

but no officer shall be so removed from office without being given an opportunity to be heard by the members present at the meeting.

(5) Where an officer of a credit union is removed from office at a special general meeting under paragraph (a) or paragraph (c) of subsection (4), the vacancy caused by the removal shall be filled in such manner as may be determined by the meeting.

General provisions

Credit, credit control and membership committees.

67.—(1) Without prejudice to paragraph (r) of section 55 , the board of directors shall appoint—

(a) a credit committee, which shall decide on applications for credit;

(b) a credit control committee, which shall seek to ensure the repayment of loans by members of the credit union in accordance with their loan agreements; and

(c) a membership committee which shall consider applications for membership of the credit union;

and the provisions of the Third Schedule shall apply to the committees.

(2) The record of applications for credit furnished by a credit officer under section 65 (2) shall be considered by the credit committee at its next following meeting and become part of the records of the credit union.

(3) The membership committee shall—

(a) at least once in every month notify the board of directors of the new members whose applications they have approved; and

(b) where there is a doubt in respect of an applicant's qualification for membership of the credit union, submit the application for membership to the board of directors for a decision.

Limitation of remuneration.

68.—(1) A credit union shall not pay any remuneration, directly or indirectly, to—

(a) a director of the credit union,

(b) a member of the Supervisory Committee or a principal Committee of the credit union, or

(c) a credit officer or credit control officer,

for any service performed by that person in that capacity.

(2) Nothing in subsection (1) shall be regarded as prohibiting the payment (or reimbursement) of expenses—

(a) which are necessarily incurred by a director or committee member in the course of performing any service on behalf, or for the benefit, of the credit union; and

(b) which are approved by a majority of the directors voting at a meeting of the board.

(3) Nothing in subsection (1) shall be regarded as prohibiting any officer or voluntary assistant of a credit union, acting not as such but in his professional capacity, from tendering for the supply of, and if successful supplying, goods or services to the credit union.

(4) In any year the treasurer of a credit union may be paid such remuneration (whether described as such or as an honorarium or otherwise) as—

(a) may from time to time be approved prior to its payment (or the payment of any part of it) by the members in general meeting; and

(b) does not exceed an amount recommended by the board of directors.

Conflicts of interest.

69.—(1) An officer of a credit union shall not, in any manner, directly or indirectly, participate in the consideration or determination of any matter in which he, or a body with which he is connected, has a pecuniary interest and, accordingly, an officer shall withdraw from any meeting at which such a matter is to be considered or determined.

(2) If, apart from this subsection, the withdrawal of an officer from a meeting in pursuance of subsection (1) would cause the meeting to become inquorate, the remaining members shall be treated as constituting a quorum while the matter in question is being considered or determined.

(3) An officer of a credit union who is or becomes interested, directly or indirectly, in a contract made or proposed to be made by a credit union shall declare the nature of his interest in writing to the board of directors as soon as possible after the contract is made or proposed or, as the case may be, after he becomes so interested.

(4) A declaration under subsection (3) shall be made—

(a) in person at a meeting of the board of directors at which the contract is to be considered; or

(b) if the contract is not likely to be considered at such a meeting, by a notice in writing addressed to the board of directors and served on the secretary;

and where a notice is served as mentioned in paragraph (b), the secretary shall read the notice at the next meeting of the board of directors.

(5) Subject to subsection (6), for the purposes of this section, a general notice in writing which is given by an officer of a credit union to the board of directors and is to the effect that—

(a) the officer is connected (whether as member, director, employee or otherwise) with a specified body and is to be regarded as interested in any contract which, after the date of the notice, may be made with that body, or

(b) the officer is to be regarded as interested in any contract which, after the date of the notice, may be made with a specified person who is connected with him,

shall be deemed to be a sufficient declaration of interest in relation to any such contract.

(6) A notice under subsection (5) shall be of no effect unless and until—

(a) it is given in writing in person at a meeting of the board of directors; or

(b) it is given in writing addressed to the board of directors and served on the secretary;

and where a notice is given as mentioned in paragraph (b), the secretary shall read the notice at the next meeting of the board of directors.

(7) The provisions of this section shall apply in relation to a transaction or arrangement as they apply in relation to a contract; and, for the purposes of this section, an officer of a credit union shall be regarded as connected with a particular body if he has an interest in the body, whether directly or indirectly and whether as member, director, employee, shareholder or otherwise.

(8) Within three days (excluding a Saturday, Sunday or public holiday) after a declaration or notice under this section is made or given, the secretary of the credit union concerned shall cause a copy of the declaration or notice to be entered in a register kept for the purpose; and that register—

(a) shall be open for inspection without charge by any officer, auditor or member of the credit union; and

(b) shall be available at every general meeting of the credit union and, if adequate notice in advance is given to the secretary by any director, at any meeting of the board of directors.

Required signatories etc.

70.—(1) None of the documents specified in subsection (2) shall be effective in law to bind a credit union unless signed by at least two officers of the credit union, one of whom shall be a member of the board of directors.

(2) The documents to which subsection (1) applies are any of the following, so far as not required by law to be under the seal of a credit union—

(a) a conveyance or transfer of property of any description by a credit union; and

(b) any other document which does not fall within section 55 (k) but by which a credit union enters into an obligation of any description.

(3) If the rules of a credit union make provision as to the officers by whom documents to which subsection (1) applies are to be signed, a document which purports to be signed as required by that subsection shall not be invalid by reason of any failure to comply with any such provision of the rules.

(4) The provisions of this section are without prejudice to any additional provisions as to signatures imposed by the Registrar by way of condition under section 49 .

Confidentiality of information.

71.—(1) Subject to subsection (2), during his term of office or at any time thereafter, an officer or voluntary assistant of a credit union shall not disclose or permit to be disclosed any information which concerns an account or transaction of a member with, or any other business of, the credit union.

(2) Subsection (1) does not apply to a disclosure of information—

(a) if or to the extent that it is necessary for the proper conduct of the business of the credit union; or

(b) which is required by a court in connection with any proceedings; or

(c) which is made with the consent of the person to whom the information relates and, where not the same person, of the person from whom the information was obtained; or

(d) which, in a case where the credit union is acting or has acted as agent for a person, is made to that person in respect of that capacity; or

(e) where the information is in the form of a summary or collection of information and is so framed as not to enable information relating to a particular member to be ascertained from it; or

(f) which, in the opinion of the Registrar, is necessary for the protection of the funds of shareholders in or depositors with the credit union or to safeguard the interests of the credit union; or

(g) which is made to the Registrar for the purposes of his functions in relation to credit unions.

(3) As soon as practicable after the beginning of his term of office or, in the case of any person whose term of office began before the commencement of this section, after that commencement, every officer or voluntary assistant of a credit union shall, in such manner as the Registrar may determine—

(a) be informed by the credit union of his obligations under this section; and

(b) in writing acknowledge that he has been so informed and understands his obligations.

(4) Any reference in the preceding provisions of this section to a term of office means—

(a) in relation to an officer who is an employee, the period of his employment; and

(b) in relation to a voluntary assistant, the period during which he is engaged in the operation of the credit union.

(5) A person who contravenes subsection (1) shall be guilty of an offence.

(6) In any proceedings for an offence under this section, the onus of proving that any of the paragraphs of subsection (2) excludes a disclosure from subsection (1) shall lie on the person who made or permitted the disclosure.

Persons disqualified from acting.

72.—(1) A person who has been adjudicated bankrupt and whose bankruptcy still subsists or who has been convicted of an offence in relation to a credit union or an offence involving fraud or dishonesty shall not—

(a) sign an application form for the registration of a society as a credit union;

(b) be qualified to be appointed or to act as a director, member of the Supervisory Committee, member of a principal Committee, voluntary assistant, auditor, receiver or liquidator of a credit union; or

(c) directly or indirectly take part in or be concerned in the management or operation of a credit union; or

(d) permit his name to be put forward for election or appointment to any of the positions referred to in paragraph (b).

(2) If a person who is a member of the board of directors or of the Supervisory Committee or of a principal Committee of a credit union is adjudicated bankrupt or convicted of such an offence as is referred to in subsection (1), he shall forthwith cease to hold his office and the vacancy thereby created shall be deemed to be a casual vacancy and be filled accordingly.

(3) A decision of the board of directors of a credit union shall not be affected by the presence at a meeting of the board of a person who, by virtue of this section, is disqualified from being a director; but any vote which such a person purports to cast shall be disregarded.

(4) Any person who, in relation to a credit union, purports to act in a manner or capacity which, by virtue of his being disqualified under this section, he is prohibited from doing shall be guilty of an offence.

Giving of security by officers etc.

73.—(1) Before taking up office, every officer or voluntary assistant of a credit union who will have the receipt or charge of money shall give security in such sum as the board of directors may direct conditioned—

(a) for his rendering at all due times a just and true account of all money received and paid by him on account of the credit union; and

(b) for the payment by him of all sums due from him to the credit union in his capacity as an officer or voluntary assistant.

(2) In subsection (1)(a), “at all due times” means at such times as may be specified in the rules or as the credit union or its board of directors may require.

(3) An officer or voluntary assistant of a credit union shall give security for the purposes of this section either—

(a) by becoming bound, either with or without a surety as the board of directors may require, in a bond in such form and amount as the board may approve; or

(b) in such cases as may be approved by the Registrar, by giving such other security as the board of directors may direct.

(4) In relation to a voluntary assistant, the reference in subsection (1) to taking up office is a reference to his becoming engaged in any way in the operation of the credit union.

Duty to account.

74.—(1) Whenever required to do so in accordance with subsection (2), every officer or voluntary assistant of a credit union who has the receipt or charge of money on behalf of the credit union shall—

(a) render such an account as may be required by the credit union or its board of directors;

(b) pay over all such money and deliver all such property of the credit union for the time being under his custody or control to such person as the credit union or its board of directors may appoint.