Explanatory note

This Order amends the Credit Unions Act 1979 (“the Act”).

Article 3 amends section 1 of the Act so as to permit credit unions to combine the qualification for admission to membership specified in section 1(4)(e) (the associational common bond) with any one of the other qualifications specified in section 1(4), so long as in consequence there exists common bond between members of the society.

Article 4 amends section 3 of the Act. The effect of the amendment is that a body corporate (or an officer or employee of such a body) which has its head office outside England, Scotland or Wales and which is either authorised under the Financial Services and Markets Act 2000 to accept deposits, exempt from section 19 of that Act (the general prohibition) in relation to that activity or subject to legislation that is similar to the relevant legislation that relates to credit unions, may use the title “credit union”. In addition, the Finaincial Services Authority may give approval to any person or unincorporated association to use the name “credit union”.

Article 5 inserts a new section 9A in the Act. This permits credit unions to charge their members a fee to recover the cost of providing services that are ancillary to the activity of accepting a depost or making a loan.