I move: "That the Bill be now read a Second Time."
There are four trustee savings banks operating in the State—in Dublin, Cork, Waterford and Limerick. A fifth bank—the Monaghan Savings Bank—operated until 1976 when it amalgamated with Dublin. All the banks were founded between 1816 and 1820 and although they are private bodies the Trustee Savings Banks Acts provide for their supervision by the State and set out how they should conduct their business.
The Trustee Savings Banks Act, 1863, which was a consolidating Act, is with certain amending Acts the governing statute. Amending Acts passed in 1958 and 1965 brought the legislation up to date in such respects as then seemed necessary. The question of consolidating the legislation is being examined.
Section 3 of the Trustee Savings Banks Act, 1965 provides that:
The trustees of a trustee savings bank may, with the consent of the Minister for Finance, undertake any business which is, in the opinion of that Minister calculated to encourage thrift and within the financial capacity of the bank.
Under this section the trustee savings banks were authorised to grant short-term personal loans—for periods up to five years—and bridging loans to depositors.
In connection with a proposal to extend the personal loans service to include long-term housing loans the law officers advised that there was no objection in law to the use of section 3 of the Trustee Savings Banks Act, 1965 for that purpose. As announced in this year's budget the trustee savings banks have been authorised to grant house mortgage loans.
One of the savings banks was advised by counsel that in his view the 1965 Act did not empower the Minister for Finance to sanction loan schemes and that new legislation was required. The matter was referred to the Attorney General who now advises amending legislation.
The Bill amends section 3 of the 1965 Act by providing that any business sanctioned by the Minister for Finance under that section may include the making of loans, including house mortgage loans, and the using of depositors' funds for that purpose. For the protection of the savings banks it is necessary that the amendment should have retrospective effect to cover loan schemes sanctioned to date.
I commend the Bill to the House.