Building Societies Act, 1989

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 .