This is what might be described as a Committee Stage Bill. Senators generally will agree with me that the basic objectives of the measure is to modernise and improve the law relating to building societies. I am happy to say that the Bill has been welcomed generally by the Irish Building Societies' Association. Also I feel that investors with the societies and borrowers from them will appreciate that we aim to safeguard their legitimate interests. I accept that in a major measure like this, updating legislation enacted a century ago, there must be scope for improving the text as originally drafted.
It would have been quite easy for me to continue to examine proposals put before me as to how the legislation should be drafted. I could spend the next 12 months or two years drafting legislation and then bring in what I might consider to be a perfect specimen before the House, and find that everybody would be prepared to drill holes in it. Rather than do that, having got what I consider to be in a relatively short time, the best possible draft, I opened by saying that if the House considered that amendments should be made I would consider them and if at all possible, if I thought they would improve the legislation, I would be only too anxious to accept them.
It is on that basis that the Bill has been put before the House this evening. Discussion has been prompted even since the Bill was drafted, because it is amazing how people who do not consider it necessary to make any suggestion when there is no activity will suddenly find they have a lot of wonderful ideas as soon as they see something written down. As soon as the Bill was printed and became available to the general public a lot of people came forward with suggestions and so did the Building Societies' Association, and indeed the borrowers, who are a very important section in this, and we tend to forget their interests in it. As a result I have approximately 50 amendments. Following this evening I would not be surprised if we will have as many more from Members of the House. Possibly mine will dovetail with theirs and if so we will all be very happy. I will be prepared on Committee Stage to consider very carefully any suggestions they wish to put forward with the aim of improving the Bill.
Senator Lenihan criticised the undue degree of control envisaged under sections 37, 38, 76 and 77, and especially the powers to be given to the Minister for Finance. The Senator provided part of the justification for these controls when he mentioned that assets of the societies exceeded £300 million and they are growing rapidly, because as secondary banking institutions the societies must be subject to controls similar to but not as rigid or continuing as commercial banks. But in fact the societies themselves already accept the disciplines of the necessity for preserving responsible liquidity rates and reserves so that we have got from them, having had quite a lot of discussion with them, agreement that control is needed in their interests as well as in ours and in the interest of the people who lend money.
Following the representations from the Irish Building Societies' Association I will be proposing official amendments to sections 37, 38, 76 and 77 which will modify the nature and level of what Senator Lenihan called bureaucratic controls over the society. Perhaps it is not the best thing to have a Minister looking over the shoulders of what any society or organisation is doing, but in view of the experience over the last few years I think it is necessary because as somebody said— I am not quite sure who—what we are aiming to do is to bring the standard of the worst of the societies up to that of the best and try to have it fairly uniform. I have no hesitation in saying here, as I said outside that we did have rogue societies, we had societies who had no right to be building societies. It is our object to prevent people from setting up building societies and attempting to carry on a building society with no respect for anything except their own interests and the interest of the people who are lending money and the people who were borrowing money were not being taken into consideration at all.
Senator Lenihan strongly criticised the controls envisaged by sections 76 and 77 and particularly the powers to be vested in the Minister for Finance. This is an area in which I am prepared to recommend some modification of the controls proposed in the Bill as introduced. In section 76 I am considering a proposal to give the initiative in relation to management controls to the registrar rather than to the Minister for either Local Government or Finance and I have in mind also a fairly substantial relaxation of the controls proposed in the first draft of section 77.
Senator Lenihan suggested that the oversight of building societies might be given to the Central Bank. I suggest that before pressing this point on Committee Stage he might test the support which his proposal would get from the societies. I think that they would not be too happy about that. Somebody else—I think Senator Alexis FitzGerald—referred to the fact that there was no ministerial control over the Central Bank. That is something I regret from time to time, but the law is that there is no ministerial control over the Central Bank and that is something which perhaps in the years to come somebody coming after me might decide to do something about.
I agree with Senator Russell that controls over the societies should be kept to the minimum compatible with their position as one of the principal custodians of public savings, and particularly of small savings. It is extraordinary the number of small savers who have transferred their savings to the building societies from other investments, and indeed from in the country districts what was described for many years as under the bed— because that is where an awful lot of people kept their money, in a mattress or in a box under the bed or something like that. They just did not bother putting it anywhere.