Dáil Éireann debate -
Tuesday, 23 May 2000

Vol. 519 No. 5

Written Answers. - Banking Sector Regulation.

Jim O'Keeffe

Question:

42 Mr. J. O'Keeffe asked the Minister for Finance if he is yet in a position to give an outline of the extent of moneys in dormant accounts; and if he will take into account the position of building societies and life assurance companies. [14259/00]

Brendan Howlin

Question:

65 Mr. Howlin asked the Minister for Finance the organisations or interest groups with whom his Department has consulted on the proposed legislation to deal with dormant bank accounts; when he expects to bring proposals to Government; and if he will make a statement on the matter. [14267/00]

Ivor Callely

Question:

150 Mr. Callely asked the Minister for Finance the progress made on the proposal to transfer funds from dormant accounts held by financial institutions; if he will outline the complexities involved; the total monetary value involved in these accounts; and if he will make a statement on the matter. [14383/00]

Minister for Finance (Mr. McCreevy):

I propose to take Questions Nos. 42, 51, 65 and 150 together.

The Government, at its meeting on 11 April 2000, approved my proposals to engage in consultations with the financial services industry on the dormant accounts issue and, in this regard, the following bodies have been consulted: Irish Bankers' Federation, Irish Insurance Federation, Irish Mortgage and Savings Association, Irish Association of Investment Managers, Financial Services Industry Association, An Post, NTMA and the Central Bank.

In the light of these consultations, my officials, within the past few days, presented a report of their findings to me. A number of issues remain to be clarified and I envisage that some further consultations will take place shortly with a view to achieving broad agreement on a scheme. Incidentally, I commend the representatives of the financial services sector for the positive and constructive stance they have taken in these consultations.

This consultation process will be completed shortly and I then intend to circulate revised proposals to my Cabinet colleagues and the Attorney General for their final views, before submitting formal proposals, including heads of a Bill, to Government. I expect to be able to submit these formal proposals within a month or so. I would then expect to receive Government clearance to have the heads referred to the Parliamentary Draftsman's office for the formal drafting of the Bill.

With regard to the legal complexities associated with the initiative, these are issues which will have to be addressed at the drafting stage and I could not go into any detail at this stage. Clearly, the major issue to be addressed in this area would be the protection of property rights in the Constitution, the right to privacy of the individual and the duty of confidentiality of the bank to its customer, etc.

I hope to be in a position to publish the dormant accounts Bill later this year. As regards the extent of moneys in dormant accounts, this would depend on what dormancy period is decided upon and the scope of accounts and other financial products which are brought within the definition. During the consultation process with the financial services sector, some updating of the estimates of dormant funds were supplied. For illustrative purposes, I will outline the position in regard to funds dormant at the 20 year benchmark. They are as follows:

	£m
Banks	28
Building Societies	1 (unrevised figure)
POSB	4.1
Savings Certificates etc.	8.1
Life assurance policies	7.4
Total	48.6

I should, however, issue a caution regarding the above figures. It is reasonable to assume that as soon as the scheme is announced and-or the banks, etc., begin to notify customers that their accounts are being considered for possible dormancy status, the legitimate owners are then likely to reactivate the accounts. This, in fact, is a desirable outcome since the underlying aim of the initiative is, after all, to reunite dormant funds with their legitimate owners.