A Bill to allow for the demutualisation and sale of the Irish Nationwide Building Society, and a windfall to members, has been rushed through the Dáil in a late-night, two-hour debate and passed by 100 votes to 34.
Fine Gael supported the Bill along with the Government parties but Labour, the Green Party, Sinn Féin and a number of independents opposed it and expressed major concern about the way the Building Societies (Amendment) Bill was being handled and the implications for members of both the Irish Nationwide and the EBS, which can take on more banking activities such as current accounts.
Minister of State Noel Ahern rejected criticisms that "nothing could now stop the directors of the Irish Nationwide Building Society making a killing and they could take 15 per cent. Somebody can stop them. The members of the building society can stop them. By passing the Bill we are not sanctioning any activity. We are giving options."
Labour spokesman Eamon Gilmore had questioned why the Minister appeared "unconcerned that the management of a building society, which until recently used practices described by an ombudsman's ruling as being invalid and unlawful, may substantially be rewarded as a result of the demutualisation process".
Mr Ahern said of the long-awaited legislation that, while the proposal for demutualisation of Irish Nationwide had come from the directors, "some motions that reached the floor of a society's agm have been blocked. I have tried to loosen the provisions somewhat to allow it to be discussed". He was making the change "to give it flexibility".
Fine Gael's environment spokesman Fergus O'Dowd supported the principle of the Bill but was concerned about the speed with which the legislation was being pushed through the Oireachtas.
He said that "proper legislation depends on proper scrutiny. Any error made at this stage will continue into the future".
Mr O'Dowd said the Bill would not vindicate the rights of borrowers who had endured "trauma, penal interest rates and having been forced to fight their case in court". He proposed an amendment in line with UK practice, which was rejected, that "a court procedure must be used before a company can be demutualised" and that before the court could make any order it "must be satisfied that all the assets and liabilities are in order". Mr Ahern said, however, that that was done by the financial regulator.
The Bill was also passed by the Seanad yesterday evening and now goes to the President for signing.
