26Borrowing powers of loan fund company

26 Borrowing powers of loan fund company

26 Borrowing powers of loan fund company

(1) Subject to this section, a loan fund company may, unless prohibited or restricted by its memorandum or articles of association from so doing, receive money on deposit or loan, either at interest or at no interest, from any member or from any other person to be applied for the purposes of the company.

(2) A loan fund company shall not receive any money by way of deposit or loan if by so doing the total amount of money so received by the company would exceed an amount equivalent to four-fifths, or such other proportion as may be prescribed, of the unpaid principal secured to the company by mortgage from its members.

Maximum penalty: 10 penalty units.

(3) Every acknowledgment or security of any kind given by a loan fund company with respect to the receipt of a deposit or loan shall have printed or written on it a statement that the company is only entitled to receive deposits or loans within the limits prescribed by this section.

Maximum penalty: 2 penalty units.

(4) No member or other person depositing money with or lending money to a loan fund company shall be concerned with the application of that money by the company or be in any way affected or prejudiced by the fact that the company, in receiving the deposit or loan, has contravened the provisions of this or any other Act or the company’s memorandum or articles of association.

ss 24–26: Am 1992 No 112, Sch 1.