Credit Union Act, 1997

Interest on loans.

38.—(1) A credit union may charge interest on loans made to its members under section 35 subject to the following conditions—

(a) the interest on a loan shall not at any time exceed one per cent. per month on the amount of the loan outstanding at that time;

(b) the interest on a loan shall in every case include all the charges made by the credit union in making the loan;

(c) the rate of interest charged on any class of loans granted at a particular time shall be the same for all loans of the class.

(2) If a credit union knowingly charges or accepts interest on a loan at a rate greater than that permitted under this section, it shall be guilty of an offence and—

(a) all the interest agreed to be paid by the member shall be deemed to have been waived by the credit union; and

(b) any interest paid on the loan shall be recoverable summarily by the member (or his personal representative) as a simple contract debt.

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