Building Societies Act, 1989

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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.