The Gazette 1975

The Building Societies Bill 1975

PART 1

by THE PRESIDENT (MR. P. C. MOORE) This Bill is a comprehensive measure consolidating, amending and extending the Law on Building Societies. The Statute Law relating to Building Societies is contained in the Building Societies Acts 1874 to 1974 the principal Acts being the 1874 and 1894. Minor amendments were made by the Acts passed in 1875, 1877, 1884, 1936, 1942 and 1974. The proposals in the present Bill are designed to replace the existing code and to amend, extend and up-date the provisions which it contains. The Bill envisages the repeal of all the existing Statute Law subject to the u:ual transitional and savings provisions and, as already stated, the Bill is a comprehensive measure governing the entire Law applicable to Building Societies, coupled with far- reaching proposals enabling the Minister for Local Government and the Minister for Finance to make Regulations controlling the management, direction and financial affairs of Societies from time to time, as and when it appears expedient in the opinion of the Minis- ter to do so. A Registered Building Society is a Body corporate (operating under the name contained in its Rules) hav- ing perpetual succession and a common seal. A Building Society is not permitted to build houses or hold land and buildings save for the purpose of provid- ing -office or branch office accommodation for the con- duct of its business. A "Society" is defined in the Bill as a Building Society established under the Act for the purpose of raising, in accordance with the provisions of the Act, funds (by the subscription of the members, the acceptance of deposits and loans) for making loans to members on security by the Mortgage of freehold or leasehold estate or interest. This is the primary or only object of a Building Societies' Acts. The members of a Building Society normally consist of two classes : (1) Investing (or unadvanced) members who subscribe for Shares (receiving Interest or dividends on the amount paid up) and (2) Borrowing or advanced members who borrow money from the Society on Mortgage. The rights and liabilities of investing members depend upon the Rules of the Society which must set forth the terms on which its various classes of shares are issued. Those of the borrowing members depend not only on the Rules but also on the Contract of Mortgage into which they have entered. Depositors who are not members of a Society, unless however the Rules specifically so provide,a re bound by their own form of Contract and depositors are entitled to payment in priority to the investing members on a winding-up. Investing members of a Society only have the right to vote. The Contents of the Bill The Bill contains 96 Sections and a Schedule of enactments repealed divided into six parts : Part I : Preliminary and general; Part II : Establishment, Rules, Powers, etc., of Soci- eties; Part I II : Control of Societies by Registrar; Part IV : Control by Minister for Finance; Part V : Management and Administration of Socie- ties;

Part VI : Part VII Loans; Miscellaneous. Schedule—Enactments Repealed

The English Building Societies' Act, 1962 operates in Britain since 1st October 1962, and many of its provi- sions appear to be incorporated and adapted in the present Bill. Not all of the provisions of the English Act have been adopted because of the powers contem- plated in the Irish Bill enabling the Minister and the Minister for Finance to make Regulations from time to time as to the management, control and conduct of Building Societies' affairs. The Minister in the Bill means the Minister for Local Government The English Act of 1962 contains 135 Sections and 10 Schedules. The Act is divided into eight parts, as follows: Part I : Constitution of Building Societies; Part II : Advances on Mortgage; Part III : Borrowing powers, and general provisions as to Investors, and Depositors and other Lenders; Part IV : Powers of control of Chief Registrar; Part V : Investment and banking of surplus funds; Part VI : Management and administration; Part VII : Winding-up and dissolution; Part VIII : Miscellaneous and supplementary provi- sions. The Schedules to the English Act are as follows : Schedule 1 : Requirements relating to Founders' and Directors' Shares; Schedule 2 : Requirements relating to advertising; Schedule 3 : Permitted Classes of additional security; Schedule 4 : Guarantees given under continuing arrangements; Schedule 5 : Permitted Classes of prior Charges; Schedule 6 : Form of receipt to be endorsed on the Mortgage; Schedule 7 : Form of Bond for Officers of Building Societies; Schedule 8 : Modifications of Act in relation to exist- ing Societies; Schedule 9 : Standard Rules for Meetings of Building Societies; Schedule 10 : Repeals and revocations. The English Act is a comprehensive measure and covers all the activities, management and affairs of Building Societies under the control of the Chief Regis- trar. It would appear that reliance is placed by the Draftsmen of the Irish Bill on the powers vested in the Minister for Finance rather than the Registrar. Main changes Stricter Regulations are now envisaged for the estab- lishment of a Building Society as follows : (A) Ten or more persons must now establish a Society and not three members and the secretary as heretofore (S.8). (b) The Minister for Local Government after consul- tation with the Minister for Finance will prescribe the amount of cash that must be paid into the Society by the ten subscribers and this item may be as much as £500.00 each. The Shares must not be issued on more favourable terms than other Shares of a similar class issued by the Society and the Shares may not be repaid or transferred within a period of five years save of course by operation of Law (S.18). .319