(1) In paragraph 5 of Schedule 2 to the 1986 Act (membership), for sub-paragraphs (1) and (2) there shall be substituted the following sub-paragraphs -
"(1) The rules of a building society shall provide that no person shall be a member of the society unless he is a shareholding member or a borrowing member or both.
(2) In this Act, in relation to a building society -
"borrowing member" means, subject to sub-paragraphs (2A) and (2B) and paragraph 29(2) below, an individual who is indebted to the society -
(a) in respect of a loan which is fully secured on land; or
(b) if the rules of the society so provide, in respect of a loan which is (within the meaning of the rules) substantially secured on land;
"shareholding member" means a person who holds a share in the society.
(2A) If the rules of a building society so provide, an individual shall cease to be a borrowing member at any time if at that time the society -
(a) takes possession of, or exercises its power of sale in relation to, the
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