Paragraph 2

United Kingdom

(1)

An incorporated friendly society may, out of any separate loan fund to be formed by contributions or deposits from its members, make loans to members on their personal security, with or without sureties or, in Scotland, cautioners, subject to the restrictions in sub-paragraphs (2) to (4) below.

(2)

A loan shall not at any time be made out of money contributed otherwise than for the purpose of the loan fund.

(3)

A member shall not be capable of holding any interest in the loan fund exceeding £800.

(4)

The society shall not—

(a)

make any loan to a member on personal security beyond the amount fixed by the rules, or make any loan which, together with any money owing by a member to the society, exceeds £200; or

(b)

hold at any one time on deposit from its members any money beyond the amount fixed by the rules, and the amount so fixed shall not exceed two thirds of the total sums owing to the society by the members who have borrowed from the loan fund.

C1(5)

The F1Treasury may by order amend sub-paragraph (3) or (4) above to substitute, for the sum for the time being specified in that sub-paragraph, such greater sum as is specified in the order.

Annotations

Textual amendments

F1: Words in Sch. 5 para. 2(5) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8(1), 13(1), Sch. 3 para. 122(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications

C1: Sch. 5 para. 2(5): Functions of the Friendly Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. II (with art. 5); S.I. 2001/3538, art. 2(1)