First Previous (PART II Formation and Authorisation of Building Societies) Next (PART IV Control and Supervision of Building Societies by Central Bank)

17 1989

BUILDING SOCIETIES ACT, 1989

PART III

Powers of a Building Society

Power to raise funds and borrow money.

18. —(1) Subject to section 17 , a building society may raise funds including, with the approval of the Central Bank, funds in a currency other than the currency of the State, to be used for the objects of the society—

(a) by the issue of shares of one or more than one denomination, either with or without accumulating interest, and may repay such funds, and

(b) by borrowing money and accordingly receiving deposits from any person.

(2) A repayment of funds under subsection (1) (a) may not be made to a shareholder (other than at his request) between the date on which he has indicated his intention to propose a resolution or a special resolution or to support a nomination at a meeting of the society and the date of the meeting.

(3) (a) Subject to paragraph (b), a society's aggregate liabilities under subsection (1) (b) shall not at any time exceed its aggregate liabilities under subsection (1) (a).

(b) Where, in the circumstances of a society, the Central Bank considers it expedient to do so, it may grant to the society a dispensation from paragraph (a), to such extent and on such terms as it thinks proper.

(4) A society shall not issue shares under subsection (1) (a) to which voting rights do not attach.

(5) A society may give security for money borrowed, including (subject to any regulations under subsection (6), the approval of the Central Bank and the terms of the mortgage) the security of mortgages held by the society.

(6) The Minister may, with the consent of the Minister for Finance and after consultation with the Central Bank, make regulations in relation to the transfer, sale or assignment of mortgages held by a society.

(7) If a society contravenes subsection (3) the powers conferred on the Central Bank by section 40 shall become exercisable in relation to the society but exceeding the limit shall not affect the validity of transactions effected in excess of it.

(8) A society shall notify the Central Bank of all loans received by it from other societies in such a manner as may be specified by the Bank.

Death of shareholder or depositor.

19. —(1) Where a shareholder in or a depositor with a building society dies and has in the funds of the society a sum of money, the sum or part of it, not exceeding such amount as may from time to time be fixed by the Central Bank after consultation with the Minister for Finance for the purposes of this section, may be paid by the society, without representation within the meaning of the Succession Act, 1965 , having been granted in respect of the estate of the deceased person, to the person who appears to the society to be entitled to receive it, whether as personal representative of the deceased person or otherwise, upon the society's being satisfied by evidence contained in a statutory declaration of the occurrence of the death and of the entitlement of the person, by or on whose behalf the sum is claimed, to the receipt thereof.

(2) Where a payment is made under this section by a society to a person who is not the executor of the deceased person concerned, the society shall, as soon as may be, give to the President of the High Court particulars in writing of the payment.

(3) Where a society duly makes a payment under this section, the payment shall be valid and effectual with respect to any demand against the funds of the society from any person making a claim as regards the estate of the deceased person concerned but the person claiming shall have his remedy for the amount of the payment against the person to whom the payment was made.

Premises.

20. —(1) A building society may acquire or provide itself with premises for the purpose of—

(a) conducting its business, or

(b) enabling a subsidiary or other associated body of the society to conduct the business of the society or of that body from the premises.

(2) If the premises are acquired or provided for the purpose of the business of a society, a subsidiary or other associated body, the society may acquire or otherwise provide itself with and hold the premises notwithstanding that part only of the premises is or will be required for that purpose.

(3) A society—

(a) may dispose of the whole or part of any premises held under this section, and

(b) if no part of the premises comes to be or, as the case may be, is any longer occupied for the business of the society, a subsidiary or other associated body, shall, subject to subsection (4), sell its estate or interest in the premises as soon as it is practicable to do so without undue loss.

(4) Subsection (3) (b) does not require a society to sell any premises if the society may hold it under section 21 and elects to do so by a resolution of the board of directors.

Holding and developing land.

21. —(1) Subject to section 36 , a building society may acquire, hold, dispose of, and develop or participate in developing land where the land is to be used—

(a) for residential purposes and purposes ancillary or incidental thereto, or

(b) for other commercial purposes.

(2) A society which is not for the time being entitled to exercise the powers referred to in this section may acquire, hold and dispose of land which is, or is to be, used for residential purposes if the purpose of the acquisition and holding of the land is to enable the society to make loans on the security of equitable interests in the land in circumstances authorised by the Central Bank.

(3) A society shall dispose of land held under this section if the Central Bank so directs.

(4) The powers referred to in paragraphs (a) and (b) of subsection (1) are separate powers, each of which, if available to a society, must, in order to be exercisable, be adopted by the society in accordance with section 36 .

(5) Premises held under section 20 may, either on application by a society or at the discretion of the Central Bank, be treated in their entirety and regardless of their use as land held under this section for the purposes of the exercise of the Bank's functions under section 39 .

Housing loans.

22. —(1) A building society may make to members loans (referred to in this Act as “housing loans”) including, with the approval of the Central Bank, loans in a currency other than the currency of the State, on the security of a mortgage of a freehold or leasehold estate or interest in a house for the purpose of enabling the member to provide or improve the house or to purchase the said estate or interest.

(2) The power to make housing loans includes power to make them on such terms as may be approved by the Central Bank even if the amount due to the society may exceed the value of the security at any time after the loan has been made and, where the amount due to the society in respect of capital exceeds the amount of the loan, any reference in this Act to the repayment of the loan includes reference to payment of the excess.

(3) Subject to subsection (2), a loan made to a member under this section shall be made on terms such that the capital element of the mortgage debt shall not exceed the value of the security.

(4) A society shall not make a loan under this section on the security of any freehold or leasehold estate or interest which is subject to a prior mortgage unless the prior mortgage is in favour of the society.

(5) (a) The Central Bank may, by regulations, specify charges or descriptions of charges which in its opinion would not materially affect the security and “prior mortgage” in subsection (4) shall not include any charge so specified.

(b) Pending the making of regulations by the Central Bank under paragraph (a)prior mortgage” shall not include any of the charges specified in the Building Societies (Amendment) Act, 1983 , or in section 4 (2) of the Land Act, 1984 , notwithstanding the repeal of both by this Act.

(6) Nothing in this section shall be construed as precluding a society from accepting additional security for further securing a housing loan as the society may determine.

Other loans.

23. —(1) Subject to this section, a building society may make loans, including, with the approval of the Central Bank, loans in a currency other than the currency of the State, other than housing loans, of the following categories—

(a) loans fully secured by the mortgage of freehold or leasehold estate or interest;

(b) loans to members, before the mortgage has been created, not exceeding the amount which the society has agreed to lend by way of a housing loan;

(c) loans fully secured by one or more securities or guarantees of such description as are from time to time specified by the Central Bank;

(d) loans to be applied in or towards payment of the deposit for the purchase of freehold or leasehold estate or interest that will secure a loan by way of mortgage but such a loan may not exceed 15 per cent., or such other percentage as may be prescribed by the Central Bank, of the amount to be paid for the purchase of the estate or interest;

(e) loans, whether unsecured or secured to any extent, to an individual for the provision or improvement of accommodation for himself or his family; and

(f) loans, including loans on overdraft or other facility accounts, whether unsecured or secured to any extent, to any person.

(2) The power to make loans under subsection (1) is subject to—

(a) section 36 in the case of loans under paragraphs (e) and (f) of that subsection, and

(b) any limit which may be specified by the Central Bank in relation to—

(i) the amount of a loan under any of the categories referred to in subsection (1),

(ii) the amount outstanding at any time, to a person or persons acting in concert, on a loan or loans of a particular category or combination of categories,

by reference to such matters as the Bank considers appropriate.

(3) A society shall take all reasonable steps to ensure that the mortgage referred to in paragraph (b) of subsection (1) is created as soon as may be after the making of a loan under the said paragraph.

Tiered interest rates.

24. —(1) A building society shall not charge a tiered interest rate—

(a) on a loan made under the repealed enactments, unless a tiered interest rate was lawfully charged on the date of the repeal; or

(b) on a housing loan made under this Act, unless a tiered rate is charged from the day on which the mortgage securing the loan is created, the charging of a tiered rate is specifically mentioned in the mortgage and is acknowledged in writing by the member in a form to be specified by the Central Bank.

(2) In this section—

(a) “tiered interest rate” means the rate of interest on a loan where the rate—

(i) is determined by reference to the amount of the loan made or to the amount outstanding at any time on foot of the loan, or to the income of the member to whom the loan is made, as the case may be, and

(ii) is greater than the lowest rate of interest applicable at the time to loans of the same type made by the society to members generally, and

(b) “a loan made under the repealed enactments” means a loan made by the society to a member on the security of a mortgage of a freehold or leasehold estate or interest in a house.

Assessment of security for loans.

25. —(1) A building society shall make such arrangements for assessing the adequacy of the security for loans to be secured by the mortgage of freehold or leasehold estate or interest (referred to in this section as “security”) as may be reasonably expected to ensure that—

(a) an assessment will be made on the occasion of each loan whether or not any previous assessment was made with a view to further loans,

(b) each assessment will be made by a person holding office in or employed by the society who is competent to make the assessment and is not disqualified under this section from making it,

(c) each person making the assessment will have furnished to him a written report on the value of the security and any factors likely to affect its value made by a person who is competent to value, and is not disqualified under this section from making a report on, the security in question,

but the arrangements need not require each report to be made with a view to a particular assessment so long as it is adequate for the purpose of making the assessment.

(2) The following persons are disqualified from making a report on the value of a security under this section, that is to say—

(a) an officer or employee of the society who makes assessments of the adequacy of securities for loans or authorises the making of loans;

(b) where the society has made, or undertaken to make, to any person a payment for introducing to it an applicant for the loan, that person;

(c) where the loan is to be made following a disposition of the security, any person having a financial interest in the disposition and any director, other officer or employee of his or of an associated employer; and

(d) where the loan is to be made following a disposition of the security, any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.

(3) In relation to any security which is to secure a loan following its disposition, the following persons are disqualified from making an assessment of the security or authorising the making of the loan, that is to say—

(a) any person, other than the society making the loan, having a financial interest in the disposition and any director, other officer or employee of his or of an associated employer; and

(b) any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.

(4) An officer, solicitor, surveyor or valuer of a society or other person engaged by a society in making reports on the value of securities or in connection with the assessment of the adequacy of securities or the authorisation of the making of loans shall not accept any commission for or in connection with any loan made or proposed to be made by the society.

(5) Any person who, being disqualified from doing so—

(a) makes a report on a security for a loan,

(b) makes an assessment of the adequacy of a security for a loan, or

(c) authorises the making of a loan,

and, in the case of a person making a report, does so knowing or having reason to believe that the report will be used or is likely to be used for the purposes of a loan, shall be guilty of an offence.

(6) For the purpose of this section any 2 employers are associated if one is a body corporate of which the other (directly or indirectly) has control or if both are bodies corporate of which a third person directly or indirectly has control; and the expression “associated employer” shall be construed accordingly.

(7) In this section a person shall be taken to have a financial interest in the disposition of any security if, but only if, he would, on a disposition of that security, be entitled (whether directly or indirectly, and whether in possession or not) to the whole or part of the proceeds of the disposition.

Sale or retention of mortgaged property.

26. —(1) Where any estate or interest in land mortgaged to a building society is sold by the society in exercise of a power of sale, the society shall ensure as far as is reasonably practicable that the property is sold at the best price reasonably obtainable.

(2) Where a society decides to retain any estate or interest in land mortgaged to the society in exercise of a power under the mortgage, the value of the property shall be determined by an independent and competent person appointed by the society and agreed to by the mortgagor and any other mortgagee and the value so determined shall be treated as if it were money received by a mortgagee arising from a sale.

(3) Where the society is unable to obtain the agreement of the mortgagor or other mortgagee to the appointment of a person under subsection (2), the society may apply to a court of competent jurisdiction to appoint an independent and competent person to determine the value of the property and the costs incurred in such application shall be defrayed equally by the applicant and the persons who do not agree to the person proposed for appointment by the society under subsection (2).

(4) To the extent that any agreement relieves (or may have the effect of relieving) a society or any person from the obligation imposed by subsection (1) or (2) the agreement shall be void.

(5) Where property to which this section relates is sold or its value determined in accordance with subsection (2), the society shall send a notice by registered post to the mortgagor and any other mortgagee at his last known address within 21 days after the completion of the sale or the date on which the report on the value of the property is received by the society, as the case may be, containing particulars of the sale or the value of the property, as the case may be.

(6) Nothing in this section shall affect the operation of any rule of law relating to the duty of a mortgagee to account to a mortgagor.

(7) In this section, “mortgagor” means a person to whom a loan is made by a society, and includes the successor in title of that person.

Discharge of mortgage.

27. —(1) Where, in relation to unregistered land within the meaning of the Registration of Title Act, 1964 , all moneys secured by a mortgage have been fully paid or discharged a building society may endorse on, or annex to, such mortgage either a reconveyance of the mortgaged property to the owner of the equity of redemption (or to such persons and to such uses as such owner may direct) or a receipt under the seal of the society.

(2) Where, in relation to registered land within the meaning of the Registration of Title Act, 1964 , all moneys secured by a mortgage have been fully paid or discharged, a society may issue to the registered owner of the land a receipt under the seal of the society which shall, for the purposes of section 65 of that Act, be sufficient proof of the satisfaction of the mortgage.

(3) A receipt under this section shall operate to vacate the mortgage and shall, without any reconveyance or re-surrender, vest the estate or interest in the property comprised in the mortgage in the person for the time being entitled to the equity of redemption.

(4) Where a mortgage has been registered in the Registry of Deeds established by the Registration of Deeds Act, 1707, the Registrar under that Act shall, on production of a receipt under subsection (1), make an entry opposite the entry of the mortgage to the effect that the mortgage is satisfied and shall grant a certificate (either on the mortgage or separately) to the like effect.

(5) A certificate under subsection (4) shall be received in evidence in all courts and proceedings without any further proof, and an entry under that subsection shall have the effect of clearing the register or record of the relevant mortgage.

(6) The power conferred on the Minister for Justice by section 35 of the Registry of Deeds (Ireland) Act, 1832 (as adapted by the Registry of Deeds (Ireland) Act, 1832 (Adaptation) Order, 1956 (S.I. 281 of 1956)) to fix fees shall include power to fix fees to be paid for making the entry and granting the certificate under subsection (4), and any moneys received under this subsection shall be paid into the Exchequer.

Investment in and support of bodies corporate, etc.

28. —(1) Subject to section 36 , a building society may—

(a) invest in bodies corporate, that is to say, acquire and hold shares or corresponding membership rights in bodies corporate, or form or take part in forming bodies corporate; and

(b) support bodies corporate or approved housing bodies, that is to say, provide bodies corporate in which it invests or approved housing bodies with any of the following services—

(i) loans with or without security and whether or not at interest,

(ii) grants of money,

(iii) guarantees of the discharge of their liabilities, and

(iv) the use of services or property, whether or not for payment.

(2) (a) Subject to paragraph (b) a society shall not, under this section, invest in a body corporate whose objects enable it to—

(i) carry on activities which are outside the powers of the society, or

(ii) invest in other bodies corporate,

but this shall not prevent a society from investing in and supporting a body for a period of 3 months, pending the alteration of the objects of that body.

(b) Where the Central Bank considers it expedient to do so, it may on application by a society grant a dispensation from paragraph (a) to such extent and on such terms and conditions as it considers appropriate.

(3) The Central Bank may specify a percentage of the share capital or corresponding membership rights of a body corporate which a society must hold as a minimum in order to exercise the power available under this section.

(4) Where a body corporate in which a society invests or proposes to invest is, at the time of any such investment or proposed investment or at any time thereafter, engaged in the business of accepting deposits or other repayable funds, the Central Bank may specify such limits or restrictions on the business of the body corporate as it considers appropriate in the interests of the orderly and proper regulation of building societies.

(5) In this section—

approved housing body” means a body approved of by the Minister for the purposes of section 5 of the Housing Act, 1988 , or a society registered under the Industrial and Provident Societies Acts, 1893 to 1978, or under the Friendly Societies Acts, 1896 to 1977, or a voluntary group provided, in the case of any such society or group, that the support is given for the purpose of providing housing;

corresponding membership rights”, in relation to a body corporate, means such rights (other than rights arising from the holding of shares) as are attributable to membership of the body;

property” includes rights of any description.

Financial services.

29. —(1) Subject to section 36 and to subsections (3) and (4) of this section, a building society may provide, as principal or as agent, financial services.

(2) In this section “financial services” means any of the following activities—

(a) arranging the provision of credit, including the joining of credit card companies,

(b) the giving of guarantees and indemnities,

(c) the sale and purchase of financial obligations, debts and securities,

(d) investment services,

(e) the discounting of credit instruments,

(f) the acceptance of deposits of money for current accounts, the collection of cheques and the payment of cheques drawn on the society,

(g) insurance,

(h) the maintenance of a company's register of members,

(i) the provision of advice relating to taxation and financial planning,

(j) financing hire-purchase,

(k) leasing,

(l) money transmission,

(m) trusteeship,

(n) executorship,

(o) foreign exchange,

(p) the operation of a credit transfer system,

(q) the issue of drafts, travellers cheques and letters of credit,

or other activities of a similar nature (including advisory services) that appear to the Central Bank to be financial services but does not include the making of loans.

(3) Subject to section 30 , a society shall not carry on insurance business otherwise than by a subsidiary or other associated body of the society.

(4) The undertaking by a society or the subsidiary or other associated body of a society of any activity pursuant to the provisions of this section and section 36 shall be subject to the provisions of any other enactment.

(5) Section 26 of the Central Bank Act, 1971 (which relates to the collection of cheques and other instruments), is amended—

(a) by the insertion of the words “or a building society authorised under the Building Societies Act, 1989” after “1965” in both subsections (2) and (3) of that section,

(b) by the insertion in subsection (6) of that section of the following additional paragraph—

“(f) any document issued by a person who maintains an account with a building society, authorised under the Building Societies Act, 1989, which is intended to enable a person to obtain payment from the building society of the sum mentioned in the document.”.

(6) Section 30 of the Succession Act, 1965 (which relates to the power to grant representation to a trust corporation), is amended by the insertion in subsection (4) (b) of that section of the following additional subparagraph—

“(v) a building society authorised under the Building Societies Act, 1989; or”.

Bonds and sureties.

30. —(1) A building society undertaking an activity pursuant to section 29 shall not be regarded as having contravened any provision of the Insurance Acts by reason only of the fact that it gives, enters into or accepts a bond or a contract of suretyship or guarantee to which this section applies.

(2) This section applies to any bond or any contract of suretyship or guarantee which is given, or is entered into, as surety or guarantor by a society in the course of its business or which is in the course of his banking business given or entered into, as surety or guarantor, by a person resident outside the State to satisfy, and only for the purposes of, a requirement which is both—

(a) a requirement of a society, and

(b) made solely for the purpose of securing financial facilities to be made available by that society.

(3) For the purposes of this section—

banking business” has the same meaning as in the Act of 1971,

the Insurance Acts” means the Insurance Acts, 1909 to 1989, and regulations relating to insurance business made under the European Communities Act, 1972 .

Conveyancing services.

31. —(1) Notwithstanding anything to the contrary in the Solicitors Act, 1954 (“the Act of 1954”) the Minister for Justice, after consultation with the Minister and the Central Bank, may make regulations authorising building societies to provide conveyancing services.

(2) Conveyancing services may be provided by a society in accordance with the provisions of regulations made under this section and in compliance with the requirements of this section and section 36 .

(3) Except in a conveyance by way of mortgage, a society shall not provide conveyancing services to both the disponer and the disponee in the one conveyance.

(4) Regulations under this section may include provisions for—

(a) the protection of persons for whom conveyancing services are provided by societies from conflicts of interests that might otherwise arise in connection with the provision of the services;

(b) securing that adequate compensation is available to such persons in respect of negligence, fraud or other dishonesty on the part of officers or employees of societies in connection with the provision of the services;

(c) the extent to which and the manner in which such services would require the involvement of persons qualified to practise as solicitors within the meaning of the Act of 1954, and the qualifications and experience of personnel generally engaged in the provision of the services;

(d) the class or classes of persons to whom the services may be provided;

(e) the restriction of the power to provide the services to property of a prescribed description;

(f) the restriction of the power to provide the services to societies of a prescribed class or classes;

(g) maximum rates or scales of fees, costs or expenses which may be charged by societies for the provision of the services.

(5) Any communication made to or by a society in the course of its acting as such for a client in conjunction with providing conveyancing services for him shall in any legal proceedings be privileged from disclosure in like manner as if the society had at all material times been acting as the client's solicitor.

(6) A society providing conveyancing services shall not in relation to the provision of such services be an unqualified person within the meaning of the Act of 1954.

(7) Section 58 of the Act of 1954 (restriction on persons drawing certain documents, etc., when not qualified to act as a solicitor) shall not apply to—

(a) a society, or

(b) any officer or employee of a society by reason of any act done by him in the course of his office or employment on behalf of the society,

where the society is providing conveyancing services in accordance with this section.

(8) Section 59 of the Act of 1954 (prohibition on solicitor acting as agent for an unqualified person) shall not apply to any solicitor by reason of any act done by him as an officer or employee of a building society where that society is providing conveyancing services in accordance with this section.

(9) Any reference in any enactment to a solicitor shall, insofar as it relates to conveyancing services under this section, be construed as including a reference to a society.

(10) Where a society provides conveyancing services, it shall include in any document or advertisement issued to the public, which contains a reference to the provision of the services, a statement of the charges or the basis for the charges in respect of the services and a client shall be entitled to ask for and to be furnished with an itemised statement of that society's charges in respect of a conveyance undertaken by the society on his behalf.

(11) Any information which comes into the possession of an officer or employee of a society by virtue of his involvement in the provision of conveyancing services by the society shall not be used by him or by the society or any subsidiary or any other associated body of the society to promote the business of the society or the subsidiary or other associated body.

(12) (a) A society providing conveyancing services shall maintain separate accounting records and prepare accounts in respect of each year showing—

(i) the costs to the society of providing the services, and

(ii) the income accruing to the society from the charges made for the services,

and shall so provide and charge for the services that the income from the provision of the services is not less than sufficient to meet all costs properly attributable to the provision of the services taking one year with another.

(b) A statement attesting the correctness of the accounts prepared in accordance with paragraph (a) and confirming that such accounts have not been distorted as a result of any arrangement which would affect the apportionment of costs and income associated with the provision of the services and that such apportionments as have been made have been properly made shall be signed by the chief executive and 2 directors and attached to the annual accounts.

(13) References in this section to “conveyancing services” are references to the preparation of transfers, conveyances, contracts, leases or other assurances in connection with the disposition or acquisition of estates or interests in land.

Auctioneering services and other services relating to land.

32. —(1) Subject to section 36 , a building society may provide—

(a) an auctioneering service in accordance with the Auctioneers and House Agents Act, 1947 (“the Act of 1947”);

(b) other services relating to land.

(2) (a) The Revenue Commissioners shall grant to a society which applies in accordance with this section a licence to carry on the business of an auctioneer in accordance with the Act of 1947.

(b) An application by a society under paragraph (a) for an auctioneer's licence shall be accompanied by—

(i) a copy of the approval granted by the Central Bank under section 36 to the exercise by the society of the power referred to in subsection (1) (a),

(ii) a certificate of the Accountant of the Courts of Justice, granted not more than 28 days before the date of the application, that the society maintains in the High Court a deposit as required by the Act of 1947 and, where the deposit is a guarantee bond, that it covers the whole of the period for which the licence is to be granted, and

(iii) the excise duty payable on an auctioneer's licence.

(c) An application by a society for a renewal of an auctioneer's licence shall be accompanied by an accountant's certificate in accordance with section 12 of the Act of 1947 (as inserted by section 12 of the Auctioneers and House Agents Act, 1967 ) in addition to the certificate and excise duty required by paragraph (b).

(d) Section 8 (2) of the Act of 1947 shall not apply to an application under this subsection.

(3) (a) Regulations may be made—

(i) by the Minister for Justice, after consultation with the Minister and the Central Bank, in respect of the provision by societies or their subsidiaries of auctioneering services, and

(ii) by the Minister, after consultation with the Central Bank, in respect of the provision by societies or their subsidiaries of other services relating to land.

(b) Without prejudice to the generality of paragraph (a), regulations under this subsection may include provisions for—

(i) the protection of persons for whom the services are provided by societies from conflicts of interest that might otherwise arise in connection with the provision of the services;

(ii) securing that adequate compensation is available to such persons in respect of negligence, fraud or other dishonesty on the part of officers or employees of societies in connection with the provision of the services;

(iii) the extent to which and the manner in which the services would require the involvement of persons with relevant qualifications and experience;

(iv) the class or classes of persons to whom the services may be provided;

(v) the restriction of the power to provide the services to societies of a prescribed class or classes; or

(vi) amending, restricting or extending the definition of services that may be provided under this section.

(4) No employee of a society, a subsidiary or other associated body of which provides services under this section, shall act as agent for the subsidiary or body.

(5) (a) A society or a subsidiary of a society providing auctioneering services or other services in relation to land shall maintain separate accounting records and prepare accounts in respect of each year showing—

(i) the costs of providing each service, and

(ii) the income accruing from the charges made for the services,

and shall so provide and charge for each service that the income from the provision of the service is not less than sufficient to meet all costs properly attributable to the provision of the service taking one year with another.

(b) A statement attesting the correctness of the accounts prepared in accordance with paragraph (a) and confirming that such accounts have not been distorted as a result of any arrangement which would affect the apportionment of costs and income associated with the provision of each service and that such apportionments as have been made have been properly made shall be signed by the chief executive and 2 directors and attached to the annual accounts.

(6) In this section—

(a) “auctioneering service” means any business to which the Act of 1947 relates, including the business of a house agent within the meaning of that Act;

(b) “services relating to land” means any service relating to the acquisition, disposition, management or development of land (including valuation, surveying, the collection of rent and the removal and storage of moveable property) or other services of a similar nature (including advisory services) that appear to the Central Bank to be services relating to such matters.

Power to operate outside the State.

33. —(1) Subject to section 36 , a building society may exercise its powers under this Act outside the State.

(2) In the exercise of any of its functions under this Act the Central Bank shall not be required to treat assets or liabilities of societies held outside the State as if they were held in the State.

Power to hedge.

34. —(1) A building society may, subject to subsection (2), effect contracts for the purpose of reducing the risk of loss arising from changes in interest rates, currency exchange rates or other factors of a similar nature affecting its business.

(2) The Central Bank may specify requirements as to the type or types of contract that may be effected under subsection (1) and the terms on and conditions under which such contracts may be effected, and a contract may only be effected under this section if it complies with such a specification or is otherwise approved by the Bank.

Prohibition on linking services.

35. —(1) A building society shall not make or offer to make a housing loan to any person subject to a condition that any services to which section 29 , 31 or 32 applies, and which that person may require, whether or not in connection with the loan, shall be provided by or through the society or a subsidiary or other associated body of the society.

(2) Where, in connection with a housing loan by a society, several services are made available by the society or by the society and one or more of its subsidiaries or by one or more of its subsidiaries, the society shall not, and shall secure that each of its subsidiaries does not, make the services available on terms other than terms which distinguish the consideration payable for each service so made available; nor shall any of its subsidiaries make the services available on terms other than terms which make that distinction.

Exercise of powers.

36. —(1) This section applies to the exercise by a building society or a subsidiary or other associated body of a power under any of the following sections—

(a) section 21 (holding and developing land);

(b) section 23 (1) (e) and (f) (unsecured loans or loans secured to any extent);

(c) section 28 (investment in and support of bodies corporate etc.);

(d) section 29 (financial services);

(e) section 31 (conveyancing services);

(f) section 32 (auctioneering services and services relating to land); and

(g) section 33 (power to operate abroad).

(2) Each power to which this section relates must, in order to be exercisable, be adopted by the society by special resolution and recorded in its memorandum.

(3) Notice of a special resolution under subsection (2) shall contain or be accompanied by a statement giving—

(a) a description of the activity in relation to which the power is to be exercised,

(b) the reasons for the adoption of each power, and

(c) details of such other matters as the Central Bank may require.

(4) Having adopted a power a society shall not, subject to subsection (5), exercise that power except with the approval of the Central Bank and in accordance with the terms and conditions of such approval.

(5) The Central Bank may specify, in relation to any power, circumstances in and conditions under which a power may be exercised by a society without a specific approval under subsection (4).

(6) Before a special resolution for the adoption of a power is proposed the society may consult with the Central Bank and the Bank may give a preliminary view (without prejudice to any decision under subsection (10)) as to whether and to what extent the exercise of the power would be approved by it.

(7) The Central Bank may specify such requirements as it considers necessary for societies exercising any power to which this section applies and it may specify different requirements as respects different powers.

(8) The powers in respect of which requirements are specified under subsection (7) shall not or, as the case may be, shall cease to be available to a society that does not satisfy the requirements but the cessation of compliance with such requirements by a society does not of itself impose an obligation to dispose of any property or right acquired in the exercise of the power.

(9) An application for approval under subsection (4)

(a) shall be made in such manner as the Central Bank may specify either generally or in any particular case; and

(b) shall be accompanied by such information as the Central Bank may require, either generally or in any particular case.

(10) (a) Having considered an application made in accordance with subsection (9) the Central Bank may, as it thinks proper—

(i) grant approval,

(ii) refuse to grant approval, or

(iii) grant approval subject to whatever conditions, restrictions or exclusions it considers appropriate.

(b) The Central Bank shall, within 6 months of the date of receipt of the application or of the date of the receipt of such additional information as it may require, notify the society making the application of its decision.

(11) Without prejudice to the generality of subsection (10) (a) (iii), the conditions imposed by the Central Bank may, in particular, include provisions as to—

(a) the class or classes of persons for whom a service may be provided;

(b) whether the activity may be undertaken by the society itself or by a subsidiary or other associated body;

(c) the amount of funds that may be applied by the society or its subsidiary or other associated body to the activity;

(d) whether the society may act as principal or agent in undertaking the activity;

(e) the period during which the activity may be undertaken;

(f) limits on any guarantees, bonds, contracts of suretyship or indemnities given or entered into by the society;

(g) whether and to what extent the approval of the Bank is to be obtained in respect of particular proposals, investments or undertakings;

(h) conditions which must be fulfilled as regards any subsidiary or other associated body of a society undertaking the activity;

(i) the qualifications required to be held by employees of the society or its subsidiary or other associated body undertaking the activity;

(j) the avoidance of conflicts of interest;

(k) charges to be made in relation to the provision of any service;

(l) the maintenance by the society of separate accounting records and the preparation of accounts in respect of the service being provided.

(12) As respects the exercise of powers outside the State, the conditions imposed by the Central Bank, in addition to any imposed under subsection (11), may, in particular, and without prejudice to the generality of subsection (10) (a) (iii), include provisions as to—

(a) the countries in which the power may be exercised,

(b) the forms of security which in any particular country correspond in the opinion of the Bank to the kinds of security referred to in sections 22 and 23 ,

(c) the application of any provision of this Act affecting loans to loans made outside the State with such modifications as appear to the Bank to be appropriate,

(d) requirements relating to currencies.

(13) The Central Bank shall not grant approval to an application unless it is satisfied that the relevant power has been adopted by the society in accordance with this Act.

(14) The Central Bank may at any time withdraw an approval it has granted under this section, impose conditions on an approval or revoke, vary or add to any conditions imposed but any such action by the Bank shall not require the disposal of any property or right already acquired.

(15) The Central Bank may commission an independent assessment of the capacity of a society to exercise a power for which it has sought approval and the society shall, if so directed by the Bank, defray the cost of such assessment.

(16) Where this Act, or the Central Bank in the exercise of its functions under this Act, requires that a power to provide a service may be exercised only through a subsidiary or other associated body the power to undertake that activity is to be treated as a power of the society for the purpose of section 28 .