87.—(1) If, with respect to a credit union, the F274[Bank] is satisfied—

(a) that the credit union has become, or is likely to become, unable to meet its obligations to its creditors or its members or suspends payments lawfully due from it, or

(b) that it is expedient to do so in the public interest or in the interest of the orderly and proper regulation of the business of the credit union or in order to protect the savings of its members, or

(c) that the credit union no longer possesses, or is not maintaining and is unlikely to be in a position to maintain, adequate capital resources and, in particular, no longer provides security for the funds entrusted to it, or

(d) F275[…]

(e) that any member or group of members of the credit union have, or are likely to achieve, a position in relation to the credit union that would enable the member or group to exercise a significant influence over the management or operation of the credit union,

F276[the Bank may decide to give and give the credit union such regulatory directions as it thinks proper].

(2) F277[The Bank may also decide to give and give regulatory directions] to a credit union if it appears to F274[it]—

(a) that the credit union has failed to comply with any requirements imposed by or under this Act (including requirements imposed by the F274[Bank] by conditions, notices, directions or otherwise in the exercise of F274[its] powers under this Act); or

(b) that the credit union has been convicted of F278[…] an offence involving fraud, dishonesty or breach of trust; or

F279[ (c) that, since the registration of the credit union, the factors taken into account in granting registration have so changed that, if the society were now applying for registration, it would be refused; or

(d) that the credit union has failed to comply with any terms and conditions imposed by the Bank under section 65(6) of the Credit Union and Co-operation with Overseas Regulators Act 2012 relating to the provision of stabilisation support under this Act.]

(3) For the purposes of this Act, “regulatory directions” are directions in writing given to a credit union by the F274[Bank] which do one or more of the following—

(a) prohibit the credit union, for such period not exceeding six months, to such extent, and subject to such conditions as may be specified, from carrying on all or any of the following activities, except with the written authority of the F274[Bank]—

(i) the raising of funds (by whatever means);

(ii) the making of payments;

(iii) the acquisition or disposal of other assets or liabilities;

(b) require the credit union to refrain from making, or to realise within a specified period, investments of a specified class or description;

(c) specify, with respect to all loans which the credit union may make, the maximum amount of secured and unsecured loans which the credit union may make to its members, or the security or types of security which the credit union must require in respect of secured loans to its members;

(d) require the credit union to establish and maintain, with respect to all loans which the credit union may make, such ratio or ratios regarding loans to shares or loans to savings as may be specified;

F280[ (e) require the credit union to raise within such period as may be specified and maintain such reserves or other financial resources or to maintain such non-financial resources, as may be specified;

(f) require the credit union to take such steps as may be specified to strengthen its systems or controls;

(g) require the credit union to apply a specified policy for making provision for such debts or treatment of assets, as may be specified, for the purposes of capital and reserve requirements;

(h) require the credit union to restrict or limit its business, operations or activities, as the Bank considers necessary, to reduce risks inherent in its activities, products and systems;

(i) require the credit union to provide a statement in writing to the Bank of the steps it will take to comply with any regulatory direction imposed under this section or with any other requirement imposed on a credit union under this Act;

(j) impose limitations on the acceptance of members’ savings or the employment of assets;]

and, in this subsection and subsection (4), “specified” means specified by regulatory directions.

(4) Subject to any express provision in subsection (3), regulatory directions—

(a) may be expressed to have effect, either generally or with respect to specified matters, for a specified period or until varied or revoked; and

(b) may make different provision for different classes of case (but not so as to make different provision for members, investments or loans within the same class).

(5) The giving of any regulatory directions shall not preclude a credit union—

(a) from receiving funds by way of voluntary non-repayable donation from its members or from such other person as may be approved by the F274[Bank]; or

(b) from setting off to any extent a member's share capital F281[against the member’s indebtedness] to the credit union (such a setoff being regarded as a repayment of share capital).