Vol. 517 No. 2
6 Ms O'Sullivan 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 financial institutions; when he expects to bring legislative proposals to Government to deal with this matter; and if he will make a statement on the matter. [9357/00]
As I indicated in response to a similar question on 23 February last, it has long been my desire that dormant funds should be transferred from financial institutions to the care of the State in order that they may be used for the common good. A similar approach was also recommended by the recent Committee of Public Accounts DIRT inquiry. To this end, I have circulated proposals to my colleagues in Government setting out my proposals in this area. As soon as the Government makes a decision on the matter, I will be making an appropriate announcement.
Subject to Government approval, my Department will be consulting representatives of the financial services, including the Central Bank, with a view to bringing forward definitive proposals.
As to the extent and value of dormant accounts, no overall information is available as to how many dormant accounts there are or how much is in them. Obviously, the answer would depend on how one defined the term "dormant account". However, my Department, in consultation with the financial institutions, carried out a preliminary survey in the mid-1990s which indicated that there was £15 million in accounts which had been dormant in banks, building societies and the Post Office Savings Bank for 20 years or more. This did not include the value of any dor mant insurance policy proceeds. No further estimates as to the value of dormant accounts have been made since then.
I am not in a position at this stage to outline the details of my proposals but, as I said in the House on 23 February, I have advocated a procedure whereby all financial institutions would be required to take all reasonable steps to ensure that the lawful owners of such accounts are identified in the first instance and the funds returned to their control. The procedure I envisage would also ensure that at all stages persons entitled to dormant accounts would have the right to have the funds returned to them.
When he last answered questions on this issue, the Minister told us that he was seeking advice from the Attorney General. From the Minister's response today, can I take it that he has received clearance from the Attorney General and that he is satisfied that the framework which he is putting to Government is constitutionally and legally sound?
There are legal complexities involved and there are some issues outstanding with the Attorney General on some aspects of the proposals. I am awaiting further decisions and advice before we progress further. It will be possible to have legislation regarding dormant accounts when we get these legal complexities straightened out. It is still my intention to introduce a Bill concerning dormant accounts later in the year.
So it is a matter of how rather than if?
Yes.
On the Order of Business, either on Tuesday or Wednesday, I raised this matter with the Taoiseach and he reacted like a man who had never heard of a dormant account. Given the expression on his face, it could have been something that was covered by the Wildlife Act. I wonder, therefore, what is the status of this commitment the Minister has made to legislate. Has the principle been agreed by the Government? Has a memorandum been circulated or have the heads of the Bill been agreed by Government? What stage are we at? Will the Minister introduce the legislation before Christmas?
Now that the Deputy mentions it, I note that there is an amount of confusion on today's Question Paper. Question No. 6 refers to "the extent and value of doormat accounts". The confusion is not just around here. I presume it means dormant accounts.
Dormouse accounts?
The Committee of Public Accounts made suggestions about this matter. Over the past 18 months to two years, however, I have initiated procedures in my Department to progress legislation in this regard. This was done both on my own initiative and following the cajoling of Deputy Jim O'Keeffe who takes a particular interest in this matter. Much of the work, therefore, has already been advanced. When we get these legal difficulties out of the way we will be able to circulate the Bill for formal observations. It should not take much longer then to bring the Bill before the House. I assure the Deputy that it is my intention to introduce a Bill on dormant accounts this year.
Is the Minister forming a view as to what constitutes a dormant account? He mentioned the sum of £15 million which had been in dormant accounts for over 20 years, but I recollect that an account that had been dormant for five years was similarly classified. Would the Minister be inclined to take the period of 20 years rather than five years as constituting a dormant account? I would regard five years as being much too short.
Will the Minister keep in mind my concern that there should be a statutory obligation of notification of owners of accounts – it is obviously not being done on a non-statutory basis – so that we can minimise as far as possible the number of dormant accounts and make sure their owners can claim them?
The figure I referred to in my reply is from a survey that was carried out by my Department in the mid-1990s. The estimated time for dormant accounts was 20 years. As regards the figure of £15 million, the estimate was that £7 million was in the banks, £1 million in the building societies and £7 million in post office savings accounts. That was a rough survey as far as I am aware.
It was an under-estimate.
I concur with the Deputy. I have not put final proposals to Government but the appropriate timeframe might be between five years and 20 years. I would be inclined to favour the lower end of the market and I will explain why. The intended procedure, as I have outlined, given a certain number of years as constituting a dormant account, is that the bank or financial institution will be required to find out whether it is a dormant account and write to the customer. It would probably take three or six months for that procedure to be completed. After that, it would be a matter for the State. In any event, if a person turns up in one, two or 20 years and claimed an account, the legislation will provide that that person must get his or her money.
