The Presbyterian Mutual Society went into administration in November
The financial regulator, the FSA, has said that the Presbyterian Mutual Society broke the law in the way it was being run.
However, the FSA said it will not take a case against any of those involved in running the society.
The FSA found that the society was, in effect, operating as a bank without the necessary authorisation.
Nearly 10,000 savers were hit by the collapse of the society, which was put into administration last November.
The FSA have been investigating the circumstances which led to the collapse.
In a statement it said: "We have concluded our investigation and have decided that the PMS was conducting regulated activities without the necessary authorisation or exemption.
"However, on the basis of the information currently available to us, and applying the criteria in the Code for Crown Prosecutors, we have decided that it would not be right for us to take a case against any of those involved in running the PMS.
"However, we remain in touch with the administrator and, if further information comes to light relating to the issues we have investigated, we will look into it."
The Presbyterian Mutual Society was set up in 1982 as an investment vehicle for members of that church.
Individuals or Presbyterian congregations could each buy up to £20,000 in society shares, and they could lend the society much more. Often they received healthy returns of up to 6% a year.
It got into trouble in 2008 after the government announced a guarantee scheme for savers in banks. It protected deposits up to a value of £50,000.
The PMS was not covered by the guarantee, leaving many savers to conclude their cash would be safer in one of the protected banks. That led to a run on the PMS.