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BUILDING SOCIETIES ACT (NORTHERN IRELAND) 1967 - SECT 22

Ordinary limitations on special advances.

22.(1) Subject to the following provisions of this Part, a building society
shall so conduct its business as to secure that special advances are not made
by it except as authorised by this section.

(2) At the end of each financial year a building society shall review the
advances made by the society on the security of freehold or leasehold estate
which are outstanding at the end of that year, and shall ascertain

(a)the total amount of those advances which at that time has not been repaid
to the building society, together with any arrears of interest in respect of
those advances; and

(b)the proportion of that amount which is in respect of advances made to a
body corporate, or made to a person who at that time is indebted to the
society (taking into account any kind of debts, whether immediately repayable
or not) in an amount exceeding seven thousand pounds or such other sum as may
be prescribed under section 21, or made jointly to two or more persons any one
of whom is so indebted to the society.

(3) If the proportion ascertained at the end of a financial year in accordance
with subsection (2)(b) (in this section and in section 23 referred to, in
relation to that year, as "the ascertained proportion" for that year) does not
exceed ten per cent., the building society may make special advances in the
next following financial year, but so that the total amount of
special advances made by it in that following financial year does not exceed
ten per cent. of the total amount of all advances made by the society on the
security of freehold or leasehold estate during that following financial year.

(4) If the ascertained proportion for a financial year exceeds ten per cent.,
but does not exceed twenty-five per cent., the building society may make
special advances in the next following financial year, but so that the total
amount of special advances made by it in that following financial year does
not exceed two and one-half per cent. of the total amount of all advances made
by the society on the security of freehold or leasehold estate in that
following financial year.

(5) If the ascertained proportion for a financial year exceeds twenty-five per
cent., the building society shall not make any special advances in the next
following financial year, and shall not make in that year any advance unless,
at the time when it is made, it can be ascertained that it will not be a
special advance.

(6) A building society shall not make any special advances in the calendar
year in which it is established, and shall not make in that year any advance
unless, at the time when it is made, it can be ascertained that it will not be
a special advance.

(7) If a building society does not comply with the requirements of this
section, the society shall be liable on conviction on indictment or on summary
conviction to a fine which, on summary conviction, shall not exceed two
hundred pounds; and every officer of the society who is in default shall be
liable

(a)on conviction on indictment, to a fine, or to imprisonment for a term not
exceeding two years, or to both; or

(b)on summary conviction, to a fine not exceeding two hundred pounds, or to
imprisonment for a term not exceeding three months, or to both.

(8) Without prejudice to subsection (7), if a building society does not comply
with the requirements of this section, the registrar may present a petition
for the winding up of the society under the Companies Act (Northern Ireland)
1960.

© 1967 Crown Copyright

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