Tuesday, 5 May 1942
Dáil Éireann Debate
(5) Every deposit book or acknowledgment or security of any kind given for a deposit or loan by a society shall have printed or written therein or thereon, the whole of the following sections, that is to say: Section 14 of the Building Societies Act, 1874, Section 15 of that Act as amended by the Building Societies Act, 1942, and Section 14 of the Building Societies Act, 1894.
This amendment meets a point contemplated by Deputy Costello in an amendment that he has put down to Section 4. It relates to the printing upon every legal acknowledgment or security of any kind given on a deposit or loan of certain particulars of the state of the law. It is not quite clear that the amendment is necessary, but it is no harm to have the position clarified to meet Deputy Costello's point.
General MacEoin: The Minister should take note of a few things to which I wish to direct his attention before the Bill passes. All over the country, mushroom building societies have been established and it has been brought to my notice within the past two or three months that, in cases where houses have been built and the Local Government Department has made the appropriate grant, months and months elapse before the member of the society gets credit for the grant. I know two cases in which the money was issued by the Local Government Department as far back as last October and in which it has not yet been brought to the credit of the members in question. The building society in the country is of mushroom growth. It does not build the house at all. A person becomes a member of the society and then proceeds to build a house. The building society makes the application for the grant, but the house is built by the member of the society himself. The society gets a grant of £80 and the member is entitled to from £72 to £75 of that sum. To my own knowledge, some of these societies received the grant last October and have not yet given the member the  benefit of it. I think that the Minister should cause stricter supervision to be exercised over the activity of these societies, both rural and urban, but particularly rural. They were organised when Fianna Fáil was in the heyday of its youth and a number of people were anxious to help the Government in their housing plan. At the same time, they were anxious to get an honest penny in an easy way.
Mr. Lemass: This Bill relates only to permanent building societies, of which there are only a few in the country. The matter to which the Deputy refers is one, I think, for the Department of Local Government and Public Health. The societies affected by this Bill make advances to members on the security of house property. As I understand, if a grant is provided by the Local Government Department, it is paid to the member and not to the society. The type of organisation with which this Bill deals is different from that which the Deputy has in mind. There is only a limited number of these societies in existence. They are really banking organisations which take money as an investment from members and lend it to other members on the security of house property.
General MacEoin: Theoretically, they are all supposed to do that. They have all to make returns to the Minister's Department. The societies to which I refer are limited liability companies and are covered by this Bill. They must hold a statutory meeting, present a balance sheet and make a return to the Minister's Department. They are, however, so loosely worked that it is months after a grant is made when it is credited to the member. I do not say that they do not build at all but the amount of building they do is very light. The member of the society does the building but the society gets the money—not the individual. The application is made by the building society and the pay order is issued to it. Then, by agreement, the building society is supposed to pay over to the rural applicant the amount he has received, less a deduction for their costs. Before the Bill passes, I should like the Minister to give an  undertaking that there will be stricter supervision of these societies.
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