Building Societies Act 1986

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Building Societies Act 1986

Legislation in the United Kingdom that expanded the services building societies are allowed to offer. Under the Act, building societies became able to conduct banking services other than receiving deposits and making loans. The Act resulted in a process by which most building societies demutualized and became regular banks.

Building Societies Act 1986

a UK Act which consolidated earlier legislation in respect of the legal framework governing the activities of BUILDING SOCIETIES and, importantly, extended their powers to provide a range of financial services beyond that of providing principally MORTGAGE loans. In effect, the Act has opened the door to societies to engage in the provision of an extensive package of financial services for their clients in competition with the COMMERCIAL BANKS and other financial institutions, including money transmission facilities (via cheque books and cheque cards), foreign exchange (via travellers cheques and foreign currencies), and buying and selling of shares and other securities, the management of UNIT TRUST schemes for pensions and PERSONAL EQUITY PLANS, arranging all kinds of INSURANCE, and the provision of estate agency facilities, surveying and valuation services.

The Act established an authority, the Building Societies Commission, to regulate the sector, replacing the Registrar of Friendly Societies in this capacity In the past the larger building societies have expanded their mortgage business by merger with, and takeover of, other building societies while retaining their ‘friendly society’ status (i.e. being owned by their subscribing members). In addition to widening the scope of their business, the 1986 Act also permitted building societies to increase their capital resources and growth potential by incorporating themselves as JOINT-STOCK COMPANIES, (as have the Abbey National and the Halifax) issuing shares to the investing public and securing a listing on the stock exchange.

Building Societies Act 1986

a UK Act that gave BUILDING SOCIETIES new powers to augment their traditional business MORTGAGES by providing a range of other financial services for their customers. These include money transmission facilities (via cheque books), arranging insurance cover, obtaining traveller's cheques and foreign currencies, managing unit trust pension schemes, buying and selling stocks and shares, and the provision of estate agency facilities. The Act has thus served to increase competition in the provision of financial services as between building societies, the COMMERCIAL BANKS and other financial institutions.

The Act also permits building societies to increase their capital resources and growth potential by incorporating themselves as JOINT-STOCK COMPANIES (as have the Abbey National and the Halifax), issuing shares and securing a stock exchange listing.

References in periodicals archive ?
The Banking Services Act amended and consolidated the existing Banking Act, Financial Institutions Act and sections of the Building Societies Act, into one governing Act.
The Government has said it will ensure ring-fencing changes apply to societies by amending the Building Societies Act to avoid confusing mutuals with two separate pieces of legislation.
Michael Stephenson, general secretary of the Co-operative Party, said: "The disappearance of the once iconic C&G name from the high street and the loss of jobs is a sad reflection on what has happened to our building societies since the last Conservative government encouraged them to demutualise through the 1986 Building Societies Act.
Organisations such as the Tipton & Coseley and the Dudley Building Societies act as a magnet for local savings while lending on sound financial principles to customers whom they know.
Nationwide said in a statement: "Directors will not receive more than their statutory entitlement and under the Building Societies Act.
In terms of growth the Newcastle Building Society have been limited because they are regulated by the Building Societies Act and therefore have to have certain levels of customer accounts before they can expand the mortgage part of their business.
Through the 1986 Building Societies Act, they facilitated the massive waves of demutualisation that plundered generations of assets from mutual societies.
The Jamaican Parliament's 2004 amendments to the Bank of Jamaica Act, the Banking Act, the Financial Institutions Act, and the Building Societies Act improved the governance, examination and supervision of commercial banks and other financial institutions by the Bank of Jamaica.
Banks and building societies act this way for profit.
Each of the society's three retiring directors were re-elected with overwhelming majorities of more than 84 per cent to comply with new provisions in the Building Societies Act which came into force his year.
This is because the 1997 Building Societies Act says all individual investors must have savings accounts and all corporate bodies deposit accounts.
AN injustice in the Building Societies Act means second and subsequent named account holders in a joint account lose out when building societies merge or issue shares.

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