{
  "url": "https://openlegislation.uk/deregulation-credit-unions-order-1996/note",
  "json_url": "https://openlegislation.uk/deregulation-credit-unions-order-1996/note.json",
  "legislation": "uksi/1996/1189",
  "legislation_title": "The Deregulation (Credit Unions) Order 1996",
  "legislation_url": "https://openlegislation.uk/deregulation-credit-unions-order-1996",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This note is not part of the Order)\nThis Order amends the Credit Unions Act 1979 (“the Act”).\nArticle 3 of this Order amends section 1 of the Act to introduce a new membership qualification for credit unions: that of either living or working in a particular locality. It also allows the appropriate registrar to register a credit union on the basis of a statutory declaration by three members and the secretary that a common bond exists among the members.\nArticle 4 amends section 5 of the Act to allow a member to hold shares of up to 1.5% of a credit union’s total shareholdings, if that produces a higher figure than the £5,000 already permitted.\nArticle 5 amends section 11 of the Act to allow a loan which is equal to or less than a member’s shareholding to be regarded as a secured loan (which can be repaid over a longer period than an unsecured one). It also amends section 7(5) of the Act to prevent a member from withdrawing the shares used to support such a loan.\nArticle 6 amends sections 11(3) and 5(8) of the Act to raise the borrowing limit for non-qualifying members to the same level as applies to other members.\nArticle 7 amends section 11 of the Act to relax the limit on a member’s borrowings for those credit unions which can demonstrate to the Registrar that they have satisfactory arrangements to deal with the increased risk. The maximum that may be lent by such an approved credit union, in excess of shareholding, becomes: (a) the greater of £10,000 and 1.5% of total shareholding or (b) 20% of the credit union’s general reserve, whichever is the lesser amount. Approved credit unions may continue to make advances at the current statutory level of £5,000 in excess of shareholding. As a further safeguard the sum of those individual loans being greater than 10% of the general reserve may not exceed five times the value of the general reserve. The article also increases, for approved credit unions, the maximum periods within which a loan must be repaid, to ten years for a secured loan and four years for an unsecured loan, provided that the credit union’s general reserve at the time amounts to at least 10% of its assets. Procedures for the grant and withdrawal of certificates of approval for credit unions are introduced.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1996/1189/note",
    "retrieved_at": "2026-10-29T12:44:35.533247+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}