andMr. Haughey asked the Minister for Finance if he will act immediately in the best interests of the principles of home ownership to prevent the acquisition of the Irish Civil Service Building Society by a commercial bank.
Private Notice Questions. - Acquisition of Building Society.
The possible acquisition of a controlling interest in the Irish Civil Service Building Society by a bank or other organisation is still being considered by the Government.
The Deputies may be assured that, in whatever action the Government may decide to take, the interests of the individual house purchasers and of the housing programme generally will be a primary concern.
The building societies legislation specifically provides for the control of building societies to be in the hands of all their members. The Civil Service Building Society has some exceptional provisions which would enable a take-over bid by the acquisition of investment shares, as distinct from the total shareholding. Does the Minister not agree that it would be inconsistent with the whole spirit and purpose of the building societies legislation to allow an intervention outside the building societies?
Because of its peculiar structure the building society in question is one for which take-over bids can be made and one such bid is apparently in the process of preparation. The Government are considering the matter and whatever the result of these discussions — there is not just one going on — our concern would be to protect the interests of those who have obtained mortgages from the society and the housing programme generally. Those would be our primary concerns in judging the most appropriate action.
I am pleased to note the statement of the Minister's concern. Would the Minister acknowledge that the building societies legislation is specifically drawn up to ensure the protection of that interest? Without any criticism of the banks, obviously they operate in the interests of shareholders and their profits as distinct from the depositors in building societies. Will the Minister take all this into account in order to protect vital interests and ensure that this distortion does not occur because of the exceptional provisions made in the 1976 legislation? Will he recommend if necessary that an amendment to the 1976 Act be introduced to seal off this loophole which clearly was not intended when the legislation was introduced?
Of course I am aware that the 1976 Act, which did a number of things including codifying previous Acts, is intended to bring about a situation in which the activities of building societies can be regulated in order to conform to certain objectives and criteria which are generally accepted as being in the interests of those who want to buy their own homes and those who choose to put their savings on deposit in building societies. My concern would be to ensure the protection of those interests in the Irish Civil Service Building Society, whatever the outcome of the present discussions. More than one option is being examined. The 1976 Act was framed in a particular way and an exception was made for this society because of its peculiar structure.
Is the Minister aware that there always has been among the commercial banks a certain hostility to the favourable conditions which are afforded to building societies in the interests of house purchasers? Will he keep in mind the fact that this attempted take-over by a commercial bank of a building society would have repercussions in that area, and that it is suspected among building societies that this is a move to undermine the special position of building societies from, as it were, the inside? Secondly, could he indicate whether this attempted take-over would be subject to the mergers and monopolies legislation?
In reply to the first part of the Deputy's question, as the Deputy well knows there is a degree of jealousy among different kinds of financial institutions if only for the reason that the far away hills always seem to be green. I know of no financial institution which does not feel that some other kind of financial institution has a benefit or an advantage which it would like to have. I take the basic point being made by the Deputy that there is this feeling among some of the institutions that others have advantages they would like to have and have not got on the basis of their statutes. That and the possible repercussions which the Deputy has referred to are matters which are very much to the forefront of the Government's mind in considering this. On the second part of the Deputy's question, the Mergers and Monopolies Act applies in this case and any bid made for the society would have to be dealt with in accordance with the terms of that Act.
A final supplementary.
Is the Minister aware that there is widespread antipathy to this move among the general public and particularly those sections of the general public who are interested in buying their own houses? Would he not acknowledge that, whatever motive the commercial bank in question have, it is certainly not to advocate the best interests and the welfare of house purchasers? In view of that, would he not be prepared to give the House an assurance that the Government will ensure that this undesirable take-over does not take place?
I do not think it is my place to ascribe or impute motives either to those who want to follow a particular procedure or to those who object to that procedure. I said and I repeat that the feelings the Deputy mentioned are well known to the Government and are obviously factors which will be taken very carefully into account in deciding on this issue. There are other factors, as I said, which have to be taken into consideration. We have not yet arrived at a conclusion on this matter, and I can only repeat that our primary concern is the protection and upholding of the interests of house purchasers and the interests of the housing programme generally.
I am now calling on Deputy David Andrews who sought and obtained permission to put a Private Notice Question to the Minister for Fisheries and Forestry.
I am grateful to you for allowing me to put this question which I believe makes the Dáil relevant as will become more obvious when I put my question to the Minister.