The Gazette 1975

The Building Societies Bill 1975

PART 1

THE PRESIDENT (MR. P.

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

Preliminary and general;

Part

: 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).

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