Wednesday, 7 May 2014
Friendly Societies and Industrial and Provident Societies (Miscellaneous Provisions) Bill 2013: Committee Stage
I will continue on the same theme, if I may. This concerns cessation of formation of new separate loan funds, and after the coming into operation of this Bill, one may not form a separate loan fund. If a party has one already, it will be permitted to keep that in existence. This means we do not want existing societies to develop into more lending, although we may need that in future. The Minister for Finance is considering what kind of financial influence Ireland will have but as we want to cease having new societies, the existing societies will not be allowed to form new separate loan funds. That may be an important function which could be badly needed in the Irish economy in the years ahead, particularly if we end up with two pillar banks and no building societies, along with the other difficulties we have mentioned.
Why would one stop new funds being set up when the activity of running such funds now is perfectly lawful? I have not heard any evidence that there is any misappropriation of those funds. What problems are we addressing in the section? It seems that an existing friendly society - there are 48 detailed in the annual report but only 47 remain - want to set up loan funds while satisfying the needs of members, with a better track record than most financial services in the country, why would one seek to shut off the possibility? This is to repeat the arguments made in opposition to section 5.