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Credit Unions Act 1979

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This is the original version (as it was originally enacted).

8General prohibition on deposit-taking

(1)Subject to sections 9 and 10 below, a credit union shall not accept a deposit from any person except by way of subscription for its shares.

(2)In this section and section 9 below a " deposit" means a sum of money paid on terms—

(a)under which it will be repaid, with or without interest or at a premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the credit union ; and

(b)which are not referable to the provision of property or services or to the giving of security.

(3)For the purposes of subsection (2)(b) above, money is paid on terms which are referable to the provision of property or services or to the giving of security if, and only if,—

(a)it is paid by way of advance or part-payment for the sale, hire or other provision of property or services of any kind and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided ; or

(b)it is paid by way of security for payment for the provision of property or services of any kind provided or to be provided by the credit union; or

(c)it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise.

(4)If a credit union accepts a deposit in contravention of this section it shall be guilty of an offence and liable on conviction on indictment or on summary conviction to a fine which on summary conviction shall not exceed the statutory maximum.

(5)The fact that a deposit is taken in contravention of this section shall not affect any civil liability arising in respect of the deposit or the money deposited.

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