At a meeting held on 21 November, the Government approved my proposals for draft legislation on dormant accounts and it will now be finalised by the parliamentary counsel. Officials will also consult with the credit union movement in relation to arrangements that could apply to dormant accounts in credit unions on an agreed basis. I expect that legislation, which will apply to all financial institutions, will be published early in 2001.
The legislation will define "dormant accounts" as being any account with no customer initiated transactions in the previous 15 years. The underlying objective of the proposals is to ensure that the funds in these accounts are returned to their rightful owners. Credit institutions and insurance companies will be required to take all reasonable steps to identify the beneficial owners of such funds with a view to repayment. It is only where the owners cannot be traced that the funds will be taken into the care of the State with a right being guaranteed to the beneficial owners or their successors of those funds to seek a refund at any point in the future.
The legislation will not affect the right to privacy which currently exists between a financial institution and its customers. This will be fully protected under the proposals as no information regarding the original ownership of dormant accounts will be made publicly available or passed on to the State.
A board of trustees, nominated by the Minister for Social, Community and Family Affairs in consultation with the Minister for Finance, will be set up with a remit to disburse any surplus funds which will be those over and above what will be required to meet possible refunds to owners for charitable purposes, or purposes of societal and community benefit. It is proposed that an independent chairperson will be appointed, along with representatives of community and other groups as well as a senior official from the Department of Social, Community and Family Affairs. The funds will be managed by the National Treasury Management Agency on behalf of the trustees.