Amendment No. 1 in the name of the Minister and amendments Nos. 2 and 6 are cognate and may be discussed together by agreement.
Building Societies Bill, 1975: Report and Final Stages.
I move amendment No. 1:
In page 9, line 24, after "shall" to insert ", within two months of the receipt by him of the copies,".
I agreed in the course of the debate on Committee Stage to accept, in principle, amendments which Deputy Faulkner proposed to these sections. Section 12, subsection 6 and section 13, subsection 5 require the registrar to notify a society of his decision to refuse to register a copy of an alteration of rules or of a resolution in connection with it or of a change of name and to give the reasons for his refusal.
Section 27, subsection 5, requires the registrar to notify an applicant of his refusal to confirm a union, transfer or undertaking to fulfill engagements and to give reasons for the refusal. The effect of the amendment, in each case, will be to impose a time limit of two months, within which the registrar must take the appropriate action.
I recommend that they be accepted.
We appreciate the fact that the Minister has accepted these amendments and we agree to them.
Amendment agreed to.
I move amendment No. 2:
In page 9, line 45, after "shall" to insert ", within two months of receiving notice of the change of name,".
Amendment agreed to.
Amendments Nos. 3 and 11 are related amendments and may be discussed together by agreement.
I move amendment No. 3:
In page 11, line 34, to delete "to vote or".
In the course of the debate on Committee Stage I agreed to reconsider the age limit provisions in section 17 (5) and section 53 (2) of the Bill. As it stands, the Bill provides that a person under 21 years may be admitted as a member, but while he is under that age he shall not be entitled to vote or to hold office. Deputy Faulkner had proposed on Committee Stage that the reference to 21 years in the case of each of the two sections be altered to 18 years. I have looked at the implications of this and I find that a person under 21 is still, technically, an infant and, consequently, cannot enter into a binding contract or, what is more important to those entering into the contract with him, can repudiate any contract he enters into if it suits him. The holding of office could involve the office holder in entering into a contract and I cannot, therefore, proceed with an amendment on the lines which Deputy Faulkner had in mind.
What I am proposing is to reduce the age for entitlement to vote from 21 to 18 years by deleting the prohibition on entitlement to vote in section 17 and amending section 53 (2) to provide that a person under 18 shall not be entitled to vote at a meeting.
The amendments I feel, will meet, as far as it is possible, what Deputy Faulkner proposed.
Again, I accept what the Minister has said and we appreciate the fact that he has agreed to the amendment. While he states that from a legal point of view it is not possible to do anything about the holding of office, it is rather a pity that we cannot also give a person of 18 years of age the right to hold office because there will be many electors and they will not elect a person unless they think he is suitable for the position. Personally, I am a great believer in giving youth responsibility as I showed when I was Minister for Education by appointing students to governing bodies of universities. However, if the Minister states that from a legal point of view it cannot be done, we have to accept that.
Amendment agreed to.
I move amendment No. 4:
In page 14, line 55, after "shall" to insert ", within six months of receiving the application for such permission,".
During the Committee Stage debate I agreed to consider the principle of an amendment put down by Deputy Faulkner to section 19 (7). He proposed that a time limit of two months be applied where the registrar was refusing an application for permission to advertise. I pointed out that while I agreed with the principle, I thought two months was too short a time.
What is involved here is that where a society, to which section 19 applies, makes application to the registrar for permission to advertise, the registrar, under subsection (5) must be satisfied on a number of matters before he can give permission. These matters are set out at paragraphs (a) to (f) of the subsection. He must consider how the society has carried on its business, whether it had complied with requirements as to founder shares and Central Bank deposit, the state of its liquidity and reserves, whether it is solvent, and whether any loans to directors are outstanding.
I think that a two-month time limit could be unduly restrictive on the registrar in circumstances where, for instance, following examination of an application, he found it inadequately documented and had to seek additional information from the applicant. The assembly and forwarding of this information by the applicant could take some time. A time limit that was too short might force the registrar to refuse, through lack of information, an application which he would otherwise approve. I am, therefore, suggesting six months, which I feel sure will meet the principle of Deputy Faulkner's proposal which is to ensure that the applicant gets a decision within a specified and reasonable time.
Amendment agreed to.
I move amendment No. 5:
In page 15, to delete lines 30 to 35 and to substitute the following:
"(6) A deposit under this section shall carry interest at such a rate (not being less than the rate payable from time to time by the Central Bank on deposits maintained in the Central Bank pursuant to section 7 of the Act of 1971) and payable in such manner and at such times as may be determined by the Central Bank from time to time.".
This is a minor amendment of a technical nature. The intention in the original subsection was that the Central Bank would pay the same rate of interest on deposits lodged by building societies as they pay on deposits lodged by licensed banks. The amendment makes clear that this will be the case.
(Dublin Central): They will not pay as much as the associated banks?
They will pay the same.
(Dublin Central): But they will not pay the same as the associated banks?
That is the idea. The intention in the original subsection was that the Central Bank would pay the same rate of interest on deposits lodged by building societies as they pay on deposits lodged by licensed banks. The amendment makes clear that this will be the case.
Amendment agreed to.
I move amendment No. 6:
In page 20, line 4, to delete "he shall notify an applicant under subsection (1)" and to substitute "he shall, within two months of receiving the application for such confirmation, notify the applicant".
Amendment No. 6 has already been discussed.
Amendment agreed to.
Amendments Nos. 7, 8, 9 and 10 are related and may be taken together.
I move amendment No. 7:
In page 27, to delete lines 40 to 42 and substitute the following:
"37.—(1) The Registrar may with the consent of the Minister for Finance require a society to maintain".
Having listened to the Minister on Committee Stage and having studied his reply on section 37, I decided to submit once again an amendment to this section, firstly, to underline our objection to the very considerable State involvement in certain aspects of building society business and, secondly, because I cannot say I was convinced by the Minister's arguments.
Might I add in passing that the Minister on a number of occasions pointed to the fact that certain matters were already discussed in the Seanad? I do not regard this as being relevant because matters can be discussed in both this House and the Seanad and can be changed in either House or both. If the Opposition feel strongly on a particular point, it is only natural that they should make their feelings felt on every occasion possible.
On Committee Stage I pointed out that the Government were proposing a number of masters for the building societies, that I believed this would lead to too much bureaucratic control and would ultimately reduce the capacity of societies to attract funds which are needed now more than ever before. I pointed out also that the building societies were very uneasy about the fact that there would in future be four masters in control. I have had no reason to change my mind on this matter, even though the Minister stated on a number of occasions during Committee Stage that the societies were quite content with the position as set out in the Bill. If the Minister believes the societies are happy with the situation, then he has been misinformed, or else what the societies said to him was different to what they told me.
I have changed this amendment quite considerably from the amendment put down on Committee Stage. In the Committee Stage amendment I proposed that the registrar would deal with ratios after consultation with the Minister for Finance. In this new amendment I am proposing that the registrar should deal with ratios with the consent of the Minister for Finance. This is an effort on my part to try to close the gap between the Minister's approach and our approach to this matter. The registrar will continue under this amendment to be the initiator. Whatever he decided on, he would have to convince the Minister for Finance that he was taking the proper decision before a change could be made, rather than the position which would have pertained in relation to my Committee Stage amendment where the function of the Minister would be, in a sense, purely advisory.
However, the important aspect of the matter so far as we are concerned would be that the registrar, who would have a deep and intimate knowledge of the building societies structure, should be the one to make the decisions which he would make on the assessment of the needs of the societies, of their members, of their borrowers and so on, and no outside influence would affect his judgment.
The Minister for Finance, taking the broader view of the economy as a whole, would be in a position to refuse permission to proceed in a certain fashion if he felt it was not in the national interest. On the other hand, the Minister for Finance would be unable to force decisions which he might feel necessary because of short-term considerations which have nothing whatever to do with the good of the building societies, the building industry or the objectives of the building societies but which related more, perhaps, to his own needs for finance at the time.
The adoption of this amendment will assure investors that their investments will not be devalued because of such short-term considerations and will ensure a continuous and regular flow of money into the societies. I have already stated when speaking on Committee Stage that the growth of building societies over the years has been phenomenal. This is first of all a tribute to management and workers alike, but it is also a tribute to the trust with which the general public view the societies. This trust has grown with the years, during a time when the societies were left to a very large extent to their own devices.
The only legislation governing their growth was passed 100 years ago. They were then very tiny financial institutions. We now agree that this legislation is very out of date when we are no longer dealing with tiny financial institutions but with very large financial institutions. Despite the inadequacy of the older legislation and the many loopholes that exist, the building societies continued to grow and develop. Apart from some very relatively minor failures, the whole movement can claim to have been an outstanding success. Again, let me emphasise that I am referring here to the general growth of the industry and not to such things as rules, regulations, interest rates and so on, which have been, and can be, bones of contention.
I feel that in this respect the societies could with advantage create a much better understanding between themselves and those borrowing from them if they spent even a fraction of the time and money used for the purpose of attracting funds to ensuring a better understanding of their methods and procedures, the reasons they take particular action and in attempts to overcome some relatively minor problems, which can very often escalate into very serious difficulties.
Let me reiterate that the case I am making is that the societies have proved themselves without the State interference proposed in this Bill. It is always wise to leave well enough alone. Many new and commendable features have been introduced in this Bill which will benefit the societies and the nation as a whole, but in our view this very considerable State interference is too much and will have detrimental effects.
As I already pointed out, Ministerial control is not appropriate to building societies. The objective of a Minister may not coincide with the needs and desires of members, both investing and borrowing. When two Ministers are involved, you can have a conflict of interests. I believe a single agency of control, such as the registrar, is the ideal where discipline could be exerted on the societies not only in their day-to-day management but also in the medium- and long-term policies.
In that context this amendment would ensure that the Minister would take the good of the community into consideration by exercising his powers outside of direct political influence and would be seen by the public to be doing so. In this way investing or borrowing members of societies would not regard the societies as an arm of the State and this would ensure that the inflow of funds would not suffer.
The strongest reason why the registrar should be the sole administrator in control is that elsewhere in the Bill he is given very extensive powers of supervision. Part III comprises eight sections giving the registrar wide powers of management and requiring him to be constantly informed of the day-to-day operations of societies. He will need to establish a close system of monitoring the activities of societies so that he can act quickly to prevent any of them from getting into difficulties or to overcome outside events. Such a person, with a qualified staff, is the obvious person to establish management arrangements appropriate to the circumstances of the day in regard to all or particular societies.
Section 62 provides that the income and expenditure account and balance sheet of a society shall contain such particulars as the registrar may direct, and section 70 provides that every society shall submit an annual return to the registrar and such other information and returns within such period as the registrar may from time to time direct. These powers are already being given to the registrar, all directly linked to the control of societies and to their management ratios under section 37.
During Committee Stage discussions on the Bill the Minister said the powers vested in the registrar are much greater than those of the British registrar. My study of the 1962 British Act in no way leads me to accept the Minister's opinion. There, the registrar is the sole adviser of the building societies where the movement is several hundred times bigger than ours in money terms and in the number of societies. No other person or agency has control under the 1962 Act and the Treasury acts only in specific circumstances. Many thousands of millions of pounds have been invested and lent by those societies without a penny being lost. The registrar's powers there have been exercised in such a way that he has rarely had to use the full rigours of the law. The 1962 Act and the powers given to the registrar have been found to be fully effective during the 1960s and the 1970s, when the societies were growing at a rapid rate.
We should concentrate on our objectives here, which are to help the people to build homes or to purchase them, to ensure a steady inflow of funds to the building societies. We accept the right of the State to be involved but we must be careful that the trust which the people have in the building societies because they believe them to be free from any outside interference will not be lost. If it were, the result would be that the inflow of funds might dry up. We want to ensure this will not happen. We know that during the years, when there was less control of them, the building societies succeeded in growing at a very rapid rate and in securing the trust of their investors and of those to whom they lent money.
What worries me is that by what appears to me to be inordinate powers being granted to the Minister, this trust might be lessened. I would add that my reference to "Minister" is not a reference to any particular Minister. One does not know what may happen in the future.
In the past, from the point of view of attracting funds, the building societies were very successful. We want to make them even more successful because that is the way in which money will become available for those anxious to build their own houses. I have tabled this amendment for the reasons I have given, because I believe if the amendment were accepted it would strengthen the Bill and ensure that in the future an even better inflow of money would be available to the societies. We are all anxious for that and I ask the Minister to reconsider his attitude in regard to this aspect of the Bill.
(Dublin Central): I support Deputy Faulkner. If the Minister for Local Government had been here five minutes earlier, he would have heard the Minister for Posts and Telegraphs expounding the great virtues of the Broadcasting Authority Bill because it conferred more independence. That makes sound sense of this amendment. Unfortunately, the Minister now present does not hold the same views as his colleague. The Minister for Local Government feels that the restrictions must be enforced by the two Departments, that they must have a say in the running of the building societies. This attitude does not contribute satisfactorily to the future expansion of building societies. We must show them that we have trust in them. The more trust placed in the people who run them the more they will respond to that, and eventually that type of organisation expands.
Deputy Faulkner has welcomed the Bill in its broad aspect. What he criticises is too much involvement of Government bodies. He believes that that will slow down the day-to-day operation of the building societies. The challenges which will be facing building societies in the future will be greater than those faced in the past. Regarding the difficulty of attracting money, we know that when building societies started in this country there were very few of the financial institutions which are available today in which people invest money. Confidence is of vital importance: confidence in the society, confidence in the institutions in which people place their finances. If the public feel that their investments are being scrutinised in any way—and I would be the last person in the House to damage the reputation of any building society— that would be disastrous. For that reason I would like the authority of building societies removed as far as possible from Government interference. We know that the Bill will envisage a certain amount of Government involvement but there should be as little as possible.
Investors today are among the most sophisticated people in the world. They know every trick in the trade. They change their money from one country to another. We know how they operate. We have seen the British operation recently as regards devaluation and such factors and how money leaves one country when more return can be got from it in another country. These people study the composition of the institutions where their finances are held. They have time to do it; it is their way of life. I know that we are not dealing with that type of person here, we are dealing with small investors, but in future it may be necessary to encourage funds from all sectors of our society. I wonder if the Minister has seen newspaper reports in the past three or four days that there is a downturn in the money coming into building societies.
I never believe all I read in the papers.
(Dublin Central): Unfortunately, I have not the paper with me but I think it was a building society spokesman who said it. I am open to contradiction on that, but it was in a paper about three days ago.
You see comical things in the papers.
(Dublin Central): That is not the way to get over it. Building societies cannot go around with their heads in the air and think that everybody is going to run after them and throw their money into them. Far from it. People will invest their money where they get a sound return for it.
That is what they are getting from the building societies.
(Dublin Central): If they get it from the building societies the money will flow into the building societies.
That is why it is going in.
(Dublin Central): I would like to refer the Minister to that Press statement that there is a considerable slow-down in finances——
Sorry, I would have to ask for the reference. If somebody is going to be quoted I would have to ask for the reference.
(Dublin Central): Unfortunately, I was not in my office, I was on the Broadcasting Bill here. Otherwise I would have the reference with me. But the Minister may take it from me that this statement was made. I would be the last in the world to encourage that attitude. We must support the building societies. They are contributing substantially to the building of houses. There are thousands of people who could not possibly have the luxury of their homes today if it had not been for the contribution made by the building societies. For that reason it is for everyone in this House to ensure that anything we say or do will not damage the building societies. What we on this side say is that the only persons who seem to be impeding them and complicating their way of life and the running of their business are the two Ministers involved.
That is a lot of nonsense.
(Dublin Central): It is a basic fact that in running anything the fewer people implicated in it the more efficiently it will work. A registrar, who will naturally be the person running the affairs of a society, will know the day-to-day operation and at times may have to make quick decisions. He is operating within a financial world where a letter to the Department of Finance or of Local Government will, perhaps, have to wait a fortnight for a reply or to get a decision. That would not be very beneficial to a building society. They would be broke in a short time if that did happen.
It is all very fine to say that we are giving them a certain authority through the registrar. He will see that before making an important decision both of these Departments would have to be consulted. When you place a registrar, or anybody, in this situation and he has to go to other Departments or sections to get decisions you will find eventually that he will not give of his whole potential because he is afraid that if he makes a decision the two Departments may not stand over it and this will impede his full operation in the role which he will occupy. It is of vital importance to the whole structure of building societies that the more authority and autonomy we give to the registrar the more he will give of himself to ensure that the position which he occupies will be upheld and strengthened. I would like to see as much authority as possible being given to the registrar with proper terms of reference in this Bill. Here again we see the Minister for Local Government keeping control.
Banks and various institutions carry an enormous amount of public funds. They do not have to apply directly to the Department of Finance as regards the ratio which they must lodge with the Central Bank. The Central Bank have the authority to decide these things. In conjunction with the associated banks they do their job very effectively. The Central Bank are subject to the Department of Finance but they have their own authority. That type of tight arrangement is better than a cumbersome arrangement where a registrar may have to wait for weeks to get a decision from the Department of Local Government or the Department of Finance. That will not contribute anything to the expansion of building societies. I do not know why the two Departments had to get involved. The amendments Deputy Faulkner has down will go a long way towards relieving this situation.
I ask the Minister to look again at Deputy Faulkner's amendments. The people who know how an organisation or society can run are the people who have been working in it. They know what will be to their advantage and disadvantage. The Minister might say that they have not objected to various sections of this Bill. If he inquires again he will get a different view.
Perhaps the Deputy would ask them if they would like to be directly under the Central Bank. I know the answer he would get.
(Dublin Central): I did not say they wanted to be under the Central Bank. I said how well the operation of the Central Bank towards the associated banks works. I did not say that building societies should be under the Central Bank. Many of those in charge of building societies have worked very hard in building up the societies and know what finance and money is about. They know how to attract money into building societies. Those are the people the Minister should consult because they will make the societies work. The Minister should look again at Deputy Faulkner's amendments and he will find if they are accepted they will be a contributory factor to the expansion of this great industry.
The series of amendments, Nos. 7 to 10, are due to the fact that Deputy Faulkner, and Deputy Fitzpatrick to a lesser extent, are under the impression that in some peculiar way the Minister for Finance will have the right to say what funds, specifically surplus money, may be invested. I want to make it clear for the 15th time that the Minister for Finance will simply lay down the investments in which surplus funds can be put by the registrar who will decide what, if any, funds will be put in there. He will draw up a list, I assume once, and he will add to it or subtract from the list but not the money. The money will be dealt with by the registrar. It is wrong that anybody should give the impression that it is otherwise. Once we get that clear we know where we stand.
With regard to the question of the prescribing of ratios by the Minister for Finance, this is aimed at ensuring that societies will be safe repositories of investors' funds. The existence of these ratios and compliance with them should lead to an increase in the confidence of the public, the direct opposite to what Deputy Fitzpatrick has been saying. If there has been an outflow it has been tremendously high over the year and because of the bank strike it was abnormally high during a period and it dropped down again. It could be that there is a reduction. A temporary recession is not unusual from time to time, particularly at this time of the year. I would hate to think that anybody in the House would say something which would suggest that there is a danger to the investors in building societies because nothing could be further from the truth. We must be very careful that we do not slant things. It might be politically advantageous to say it but it would be disastrous for the nation and for the people who invest in building societies if this happened.
The position regarding ratios in the United Kingdom is that the Building Societies Bill, 1962, does not itself require the maintenance of ratios. Any society which wishes to enjoy trustee status must conform to requirements laid down in regulations by the Treasury under section (1) of the House Purchase and Housing Act, 1959. These requirements include the maintenance of specified ratios related to liquidity and reserves. The prescribed requirements must be fulfilled to the satisfaction of the chief registrar. It will be seen that in the United Kingdom it is not the chief registrar but the Treasury which lays down the ratios, nor is it the chief registrar acting with the consent of the Treasury.
The matter was debated at considerable length on Committee Stage yet I feel it is necessary to go into some detail once more and to clarify the position so that there can be no misunderstanding of what is involved. First of all, let us look at the position under existing legislation. At present there is no control over the relationship which must exist between assets and liabilities, except that provided for in the Building Societies Act, 1942, under which a society may not accept on deposit an amount exceeding threequarters of the amount secured on mortgage. We did not re-enact this provision as it was considered too rigid and inflexible a control. That is number one.
The absence of more comprehensive controls up to now can be explained by the fact that the legislation which we are now up-dating was passed so long ago when the scale of building society operations was so much smaller. There have been developments in other fields. The need for controls in the form of ratios was recognised in the Central Bank Act, 1971, which provides that licensed banks must maintain ratios. It is this type of control that we are talking about in section 37. I do not think there is any disagreement about the need for and the desirability of the controls proposed. I do not think there is any dispute between one side of the House and the other. The issue is as to who is to exercise the control. The amendments seek to give these powers to the registrar.
I agree entirely that the registrar should have wide powers and, in fact, he will have. He will, for instance, in section 19, have complete control, without reference to any other authority, to grant permission to advertise. In section 29 he can appoint inspectors and conduct an investigation into the affairs of a society. In section 31 he may, entirely on his own initiative, suspend the raising of funds by a society. In section 32, again acting entirely on his own initiative, he is empowered to require a society to suspend advertising. In section 34 he is given very wide powers indeed to obtain documents and to enter premises. I am referring only to those powers which occur in the sections leading up to section 37 in the text. There are many others.
To suggest that the registrar should be given wide powers is one thing, but to follow that principle into giving him full powers in every matter, even where it has been demonstrated that this would be to the disadvantage of the societies, is going too far. The better control is that proposed in the Bill giving the powers to the Minister for Finance after consultation with the experts in the various fields, including the registrar.
It is relevant to consider the question of trustee status in this connection. We are all in favour of trustee status being conferred on deposits with building societies. Although this is a matter for the Minister for Finance I think it would be appropriate if I were to clear the air a little on what this involves. This is something which I thought had been clarified but it appears as if some people are not clear about it.
Persons or institutions charged with the responsibility, as trustees, for the funds of others may invest those funds only in securities which it is the responsibility of the Minister for Finance to specify in accordance with the Trustees (Authorised Investments) Acts of 1893 and 1958. These securities must conform to certain requirements which will satisfy the Minister for Finance that they are sufficiently safe as a medium of investment and the fact that the securities can meet these criteria confers the hallmark of trustee status. Where this ties in with what I have been saying about the exercise of controls under section 37 is that before a building society can enjoy trustee status it must meet, among other things, requirements laid down by the Minister for Finance under the Trustee Acts as to its liquidity and reserve ratios. He will, in fact, for the purpose of trustee status, be prescribing ratios for any society which wishes to enjoy trustee status. For this purpose it could not, for instance, be requirements laid down by anybody else, such as the registrar, acting with the consent of the Minister for Finance.
The responsibility of the Minister for Finance in connection with trustee status is one of the principal reasons why the Minister for Finance is the person empowered in section 37. The fact that he will exercise the control helps to hasten the day on which trustee status can be conferred. The proposal that the registrar should control ratios would not help in any way towards getting trustee status and would be establishing two separate authorities for deciding ratios.
Another equally important reason why the section is drafted in the way Deputies find it is that the Minister for Finance, who will consult the Minister for Local Government, the registrar and the Central Bank, is the person with overall financial responsibility and has available to him sources of information and advice on financial matters which no other authority could command but which are necessary in taking decisions on such matters as these ratios.
I fully appreciate that Deputy Faulkner has made a fairly substantial change in the amendments he is now putting forward from that which he proposed on Committee Stage. He proposed then that the controls exercised under section 37 should be exercised by the registrar, after consultation with the Minister for Finance, while he is now proposing that it will be the registrar, with the consent of the Minister for Finance, who will exercise these powers.
Apart from what I have already said I find the amendment unacceptable because it places the initiative for deciding these very important ratios on the registrar in the first instance. This would require him, in addition to all his other qualifications, to be skilled and knowledgeable in these highly technical matters without having available to him sufficient means to keep himself fully informed on the overall financial structure which will be an important factor in deciding ratios.
The section as drafted requires that the Minister for Finance consult the Central Bank, the registrar and the Minister for Local Government. This in itself is an acknowledgment that the devising of ratios can be a very complex matter in order to provide a proper balance.
As I have said, the amendment proposes that the registrar would take the initiative and decide the ratios. Then the Minister for Finance would be asked to consent to the registrar's proposal. As I see it, the Minister for Finance could only consent or refuse to consent and could not initiate action even though his advice and information sources might point to the necessity for action. Furthermore, the registrar would not be required to consult anybody and could act without advice, or with only limited or only one-sided advice if he so wished. The section as drafted provides a better procedure with the proper controls to ensure that a decision is not taken without proper consultation and gives the additional assurance that the person taking the decision is directly answerable to this House. Before this went into the Seanad we altered one of the sections because of the fact that, following consultation with the building societies, we found there was a certain automation which they would prefer. We did not go the whole way with the building societies, because as I explained in the Seanad and in this House, this Bill is not solely for the purpose of protecting and building up building societies. It must also have protection for the ordinary investor as well as the person who is borrowing money. That is why the sections are drafted the way they are. I am sorry that I cannot accept Deputy Faulkner's amendment. I do not think it would improve the Bill. Therefore, I would prefer to leave it as it is.
Amendment put and declared lost.
Amendments Nos. 8, 9 and 10, by leave, withdrawn.
I move amendment No. 11:
In page 34, line 40, to delete "twenty-one" and to substitute "eighteen".
Amendment agreed to.
I move amendment No. 12:
In page 46, to delete lines 24 to 29, and substitute the following:
"77.—(1) The Minister may in the interest of the orderly and proper regulation of building society business and having regard for the demand for loans for house purchase, on the recommendation of the Registrar, and after consultations with the Building Societies Advisory Council, make regulations in relation to the purposes and amounts of loans by societies".
What I have said in relation to section 37 applies here. This section as it stands proposes to give the Minister power to make regulations to regulate the purposes and amounts of loans made by societies, the purpose for which loans can be made and the maximum amount which may be lent to a body corporate. I am simply proposing to add the Building Societies Advisory Council. I am mainly concerned with the section because of the fact that there is a number of controlling agents involved, just as there was in section 37. The commercial management of the societies under the powers given to the Minister under this section would be very difficult. I pointed out earlier that interference in the society's business of the kind which we envisaged under this section could create problems in relation to secondhand houses. I will not deal with that again as it is already on record.
I ought to have suggested that we take amendments Nos. 13 and 14 with amendment No. 12. Is that satisfactory?
Yes. I feel that the registrar, backed by properly staffed office and kept informed of the many aspects of building society business, could take a more balanced view in this area of control of the societies lending policies, and as I said, what I have already said on section 37 is relevant to section 77.
Section 77 is a very different matter, where we are concerned with the conditions for the making of loans and, because of the size of the contribution the societies make, the availability of funds for the housing programme must also be taken into account. I am already on record at some length during Committee Stage in explaining the reasons why the section has been drafted very deliberately in this way so as to give due weight to the authorities that need to be involved. I could not agree that these regulations, even if they have to be made, should be formulated without proper consideration of all the factors involved. The procedure proposed by Deputy Faulkner would not ensure that this would be so. The section as it stands provides the proper balance and was drafted in this form after very careful consideration. I would ask that the amendment be withdrawn.
Amendment, by leave, withdrawn.
Amendments Nos. 13 and 14 not moved.
Agreed to take Fifth Stage now.
Question proposed: "That the Bill do now pass."
I thank the Minister for sending me the information in relation to the deposits and shares and for accepting some of our amendments. The Minister will agree that as far as we are concerned our main amendments were not accepted. This Bill will be useful and will be appreciated by the public and the building societies. Possibly, it would be much more appreciated had our amendments been accepted. I still feel strongly about the effects that might possibly result from State interference and I feel that the trustee status could have been made available by the registrar complying with the conditions which a Minister for Finance might lay down in relation to it. The Bill as it stands will be useful and will help in the interests of the development of the societies.
The Bill was debated here and in the Seanad and has been improved in both Houses. I thank Deputy Faulkner for the constructive way in which he approached the matter, even if the amendments which he suggested were not acceptable. Both sides of the House made contributions towards the improvement of the Bill here and in the Seanad. I consider that it is a very good Bill and I again thank Deputy Faulkner, Deputy Fitzpatrick and Deputy Moore who also made contributions.
Question put and agreed to.