Billy Timmins (Wicklow, Fine Gael)
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Question 103: To ask the Minister for Finance the stage at which his plans to bring forward legislation to incorporate uncashed bank drafts into the dormant accounts fund are at; and if he will make a statement on the matter. [7992/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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My Department is continuing to liaise with the Financial Regulator and the banking industry to determine the merits or otherwise of the proposed incorporation of uncashed bank drafts into the dormant accounts scheme.

The approach currently under consideration relates to the funds held by the banks against presentation of the drafts to avoid any change in the rules or conditions relating to the instruments themselves. However, a number of important legal and technical issues have arisen and are being examined.

First, funds representing uncashed bank drafts are held in an account in the name of the bank where it was issued and not an account in the name of the person beneficially entitled to the draft. Such accounts are inherently different to those specified under the dormant accounts legislation.

Second, bank drafts are payable on demand to the payee but the bank has no knowledge of the current holder of the bank draft and records do not always include the address of either the original purchaser or payee. This presents obvious difficulties in meeting the notification requirements which are a key feature underpinning the current dormant scheme.

Third, while bank drafts are payable on presentation, reclaims from the dormant accounts fund allow for a delay of up to 56 days. As banks will have to pay out almost immediately on drafts, it may not be feasible to oblige them to fund the payment for such a period. The assessment of these issues is continuing.

Consideration is required of whether the prospective yield from bringing uncashed bank drafts within the scope of the dormant accounts legislation as would outweigh the costs associated, in relation to regulation and compliance, as well as inconvenience to holders of these drafts.