asked the Minister for Trade, Commerce and Tourism the steps being taken to protect PMPS depositors' savings.
366.
Written Answers. - PMPS Depositors' Savings.
365.
asked the Minister for Trade, Commerce and Tourism if he will outline the action he proposes to take to safeguard a person (details supplied) in County Dublin as she invested money in the PMPS.
I propose to take Questions Nos. 365 and 366 together.
I assume the Deputies are referring to the possibility of any losses by depositors being made good by State funds. It is not proposed to take such action.
In considering the question of depositors' funds, regard must be had to the very clear warnings repeatedly issued over the years to depositors with industrial and provident societies engaged in "banking" activities. The concern of the Oireachtas about such societies was demonstrated with the enactment of the Industrial and Provident Societies (Amendment) Act, 1978, the preparation of which was commenced in 1976. The main feature of this Act was the requirement that societies wind down their deposit taking activities within a period of five years. Before and during the enactment of this legislation, Ministers and others drew public attention to the dangers of investing in societies of this kind. The 1978 Act itself, especially the five-year winding down period, was taken by the public at large as a warning by the Government and Oireachtas about the risks involved in doing business with entities of this kind.
The Act of 1978 also declared the position of the Registrar of Friendly Societies to be an independent office to ensure that there would be no interference with the exercise of the various powers given to him by the Oireachtas. In exercise of those powers, the registrar took action to prevent the society in question from advertising for deposits.
The constitutionality of the legislation was challenged by the society in question in the High Court and the Supreme Court, challenges which the members of the society must have been aware of. The judgment in both courts found in favour of the Act. The Supreme Court judgment, which was issued in May of this year, included a restatement of the earlier High Court judgment, in justification of the Act of 1978, that the general public who placed money on deposit with societies of this kind were at risk. This statement was given widespread publicity at the time.