Jim O'Keeffe
Question:30 Mr. J. O'Keeffe asked the Minister for Finance his views on dormant bank accounts; and when he will introduce legislation in this regard. [5006/00]
Other Questions. - Dormant Bank Accounts.
Emmet Stagg
Question:55 Mr. Stagg asked the Minister for Finance the progress, if any, made by his Department in regard to determining the extent and value of dormant accounts held by the financial institutions; when legislation to deal with this matter will be introduced; and if he will make a statement on the matter. [5257/00]
I propose to take Questions Nos. 30 and 55 together.
I spoke before in the House about my desire to transfer dormant funds from financial institutions to the Exchequer so they could be used for the common good. The recent Public Accounts Committee DIRT inquiry recommended a similar course of action. To this end, I have circulated proposals to my colleagues in Government. As soon as the Government makes a decision on the matter, I will make an appropriate announcement.
Does the Minister accept my concern that money in dormant accounts in banks or other financial institutions should be paid back, if possible, to the lawful owners or their next of kin and that before the issue of the seizure of such accounts by the State arises, he should consider putting in place procedures to ensure every effort is made to trace the lawful owners or their relatives?
Without giving details of the proposals I have submitted to my colleagues in Government, I have advocated such a procedure. There should be a two stage process involving fin ancial institutions being given time to do everything in their power to contact the next of kin or the beneficiaries named in the accounts. It would only be after that procedure had been followed that an account would be deemed dormant and would be taken over by the State. I took on board that aspect in the proposals I put to my Government colleagues.
I am reassured on the issue but the Minister must insist that every effort is made by way of notification or otherwise. I am also interested in the total amount in such accounts. The Minister and I have had an interest in this matter for years and I have spoken to the Bankers' Federation. At one stage it gave me a figure of £2 million. I am convinced the figure is a multiple of that if all the banks and financial institutions are taken into consideration. Does the Minister have any idea of the total amount in dormant accounts?
The Deputy may not be aware of it, but at the press conference on the Finance Bill I was at pains to give the Deputy credit for pursuing this matter over the years.
I appreciate that.
I also mentioned it in an interview subsequently with RTE, but I do not think that part was broadcast.
I hope the media will make up for it today.
The Deputy has expressed an interest in the matter over the years, but there was no great enthusiasm in the Department of Finance to pursue in the past. However, I have had a bee in my bonnet about it for some time because of a personal experience.
As I had with some clients.
Exactly.
Did it relate to dormant credit union accounts?
No, the people in credit unions are not dormant.
The amounts.
A survey on this matter was carried out some years ago and the financial institutions estimated that there could be £15 million in accounts which had been dormant for 20 years or more. I have no information on what the figure might be regarding accounts which have been dormant for five or ten years. However, I am not convinced that the figure for 20 years is £15 million or lower. Nobody knows the exact amount and the only way it will be established is if legislation is introduced. My gut feeling is that the amount is considerably higher but much will depend on how the types of dormant accounts are defined. I intend to bring the matter to a head and we should be in a position to produce legislation this year because much work had been done on it before the Public Accounts Committee reported.
Did the Minister decide on a definition of a dormant account in the scheme he advanced to Government? Will he inform the House of his general view?
I have not yet brought the matter to Government. It has been circulated for observations to other Departments. I must await those observations and the Government will then make a decision on those aspects. However, I would not be out of order in intimating to the Deputy that I have a radical view of what is a dormant account. My interpretation of what is a dormant account does not relate only to the banks, but to other financial institutions. When the observations of other Departments are available, the Government will make a decision on the matter.
The Minister also indicated at the press conference that he had sought the advice of the Attorney General.
Yes.
Has the Minister received the advice of the Attorney General and, if so, could he put some of it on the record of the House? From the Minister's responses, am I correct that he is committed at this stage, subject to a Government decision, to introducing legislation on the issue?
I said we were awaiting some further advice from the Attorney General but the Deputy can take it I am very committed to introducing legislation on this matter. Usually matters do not move as fast but, due to the urgings of Deputy O'Keeffe in particular over a number of years, we had prepared approximately 90% of the material before the Public Accounts Committee reported. That gave added impetus to the business.
Has the Minister received the Attorney General's advice?
No, unless it has been received in the Department in the last week or so. I had not received it at the time of the press conference. Subject to checking with my office, I understand it was not received in the past week.
I agree with the Minister that the net should be cast wider.
That is the thinking behind it.
I understand there are many unclaimed insurance policies which could bring the total to much more than the £15 million mentioned. Is the House likely to debate a Bill on this issue in the current year?
I hope so. If the Government can make a decision in the near future, I hope a Bill could be produced this year. The recommendations of the Public Accounts Committee inquiry, including those about certain dates being met, have given added impetus to the matter. I hope the entire matter can be disposed of in 2000.
My understanding is that the Minister has committed himself, as the Public Accounts Committee did, to using the proceeds of the funds, assuming they are not reclaimed at some stage, for positive community purposes and to putting the money into a dedicated fund for that purpose. Is that the Minister's intention?
The Committee of Public Accounts recommended something along those lines. The sub-committee recommended that, as soon as feasible, legislation should be prepared by the Minister for Finance so that the resource represented by funds in dormant accounts may be used for specified purposes of societal and community benefit. There is a precedent in the Funds of Suitors provisions. The sub-committee recognised that this recommendation raises important considerations in terms of property rights and liquidity issues. It also recognised that the Minister for Finance should have discretion as to the timing and content of the proposal.
However, I wish to correct an aspect of the sub-committee's recommendation regarding a precedent in the Fund of Suitors provision. It is not wholly appropriate to link the two matters because the Funds of Suitors Act, 1984, did not purport to transfer the funds in question to the State. It authorised the use of funds already under the control of the accountant of the High Court for specific purposes of public good.
Does the Minister accept the recommendations of the PAC?
I accept the recommendations of the Public Accounts Committee regarding dormant accounts. We will discuss the other matter after that one has been addressed.