Credit Union Act, 1966

Powers of credit union to borrow money.

10.—(1) Subject to its rules, a credit union may, in addition to accepting money on deposit from its members, borrow money on security or otherwise from any source whatsoever and may issue debentures accordingly, provided that the amount so borrowed does not exceed in the aggregate fifty per cent. of the sum of the shares balance and the deposits balance of the credit union.

(2) In calculating the sum mentioned in subsection (1) of this section, a temporary loan obtained by a credit union from its bankers in the ordinary course of business shall be disregarded.

(3) A lender or other person dealing with a credit union shall not be obliged to satisfy himself or to inquire whether the limit on borrowing by that credit union imposed by subsection (1) of this section has been or is being observed, and any debt incurred or security given by a credit union in excess of such limit shall not be invalid or ineffectual solely by reason of any such excess except in the case of a lender or a recipient of security who, at the time when the debt was incurred or the security was given, had express notice that such limit had been or was thereby exceeded.