Dormant Bank and Building Society Accounts Act 2008
Dormant Bank and Building Society Accounts Act 2008
2008 Chapter 31
An Act to make provision for, and in connection with, using money from dormant bank and building society accounts for social or environmental purposes.
[26th November 2008]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Part 1
Transfer of balances in dormant accounts
The general scheme
1 Transfer of balances to reclaim fund
(1) This section applies where—
(a) a bank or building society transfers to an authorised reclaim fund the balance of a dormant account that a person ("the customer") holds with it, and
(b) the reclaim fund consents to the transfer.
(2) After the transfer—
(a) the customer no longer has any right against the bank or building society to payment of the balance, but
(b) the customer has against the reclaim fund whatever right to payment of the balance the customer would have against the bank or building society if the transfer had not happened.
(3) The reference in subsection (1) to an account that a person holds is to be read as including an account held by a deceased individual immediately before his or her death.
In such a case, a reference in subsection (2) to the customer is to be read as a reference to the person to whom the right to payment of the balance has passed.
Alternative scheme for smaller institutions
2 Transfer of balances to charities, with proportion to reclaim fund
(1) This section applies where—
(a) a smaller bank or building society transfers to an authorised reclaim fund an agreed proportion of the balance of a dormant account that a person ("the customer") holds with it,
(b) the bank or building society transfers the remainder of that balance to one or more charities,
(c) the charity, or each of the charities, either—
(i) is a charity that the bank or building society considers to have a special connection with it, or
(ii) undertakes to apply the money in question for the benefit of members of communities that are local to the branches of the bank or building society,
(d) the reclaim fund consents to the transfer to it, and
(e) the charity, or each of the charities, consents to the transfer to it.
(2) After the transfers—
(a) the customer no longer has any right against the bank or building society to payment of the balance, but
(b) the customer has against the reclaim fund whatever right to payment of the balance the customer would have against the bank or building society if the transfers had not happened.
(3) The reference in subsection (1) to an account that a person holds is to be read as including an account held by a deceased individual immediately before his or her death.
In such a case, a reference in subsection (2) to the customer is to be read as a reference to the person to whom the right to payment of the balance has passed.
(4) In subsection (1) "agreed proportion" means a proportion agreed between the bank or building society and the reclaim fund.
In agreeing that proportion, the reclaim fund must take account of the need for the fund to have access at any given time to enough money to enable it to meet whatever repayment claims it is prudent to anticipate.
(5) For the purposes of this section—
(a) "repayment claim" means a claim made by virtue of subsection (2)(b);
(b) a "smaller" bank or building society is one that meets the assets-limit condition (see section 3);
(c) a charity has a "special connection" with a bank if (and only if) the purpose, or any of the main purposes, of the charity is to benefit members of communities that are local to the branches of the bank;
(d) a charity has a "special connection" with a building society if (and only if) the purpose, or any of the main purposes, of the charity—
(i) is to benefit members of communities that are local to the branches of the building society, or
(ii) is especially consonant with any particular purposes that the building society has.
(6) The reference in subsection (5)(d)(ii) to particular purposes does not include the purpose mentioned in section 5(1)(a) of the Building Societies Act 1986 (c. 53)
(making loans that are secured on residential property and substantially funded by members).
3 The assets-limit condition
(1) A bank or building society meets the assets-limit condition if the aggregate of the amounts shown in its balance sheet as assets on the last day of the latest financial year for which it has prepared accounts is less than £7,000 million.
(2) In relation to a bank or building society that was a member of a group on the day referred to in subsection (1), that subsection has effect as if the aggregate of the amounts shown in its balance sheet as assets on that day also included the aggregate of the amounts shown in each group member's balance sheet as assets—
(a) on that day, or
(b) (in the case of a group member whose financial year did not end on that day) on the last day of its latest financial year to end before that day.
(3) Where a balance sheet for a particular day shows amounts in a currency other than sterling, for the purposes of this section the amounts are to be converted into sterling at the London closing exchange rate for that currency and that day.
(4) The Treasury may by order amend the figure in subsection (1).
(5) An order under this section is subject to annulment in pursuance of a resolution of either House of Parliament.
Shareholding members of building societies
4 Effect of balance transfer on membership rights
(1) This section applies where a person ("the member") holds a share in a building society represented by an account with the society, and either—
(a) a transfer is made to a reclaim fund with the result that section 1 applies in relation to the account, or
(b) transfers are made to a reclaim fund and one or more charities with the result that section 2 applies in relation to the account.
(2) After the transfer or transfers the member is to be treated as having whatever share in the building society the member would have if the transfer or transfers had not happened (and accordingly as having whatever rights, including distribution rights, a holder of that share would have as such).
(3) In subsection (2) "distribution rights" means rights to any distribution arising as mentioned in section 96 (amalgamation or transfer of engagements) or 100 (transfer of business) of the Building Societies Act 1986.
(4) Subsection (2) ceases to apply where the balance of the account is paid out following a claim made by virtue of section 1(2)(b) or 2(2)(b).
(5) But where the balance of the account is paid out following such a claim and, as soon as reasonably practical, the money is—
(a) paid back into the account, or
(b) paid into another share account with the building society in the member's name,
subsection (2) continues to apply until the account is credited with the money.
(6) Where, after the transfer or transfers referred to in subsection (1), the building society is succeeded by another building society as a result of an amalgamation or transfer of engagements, a reference in subsection (2) or (5) to the building society is to be read, in relation to any time after the amalgamation or transfer of engagements, as a reference to the successor building society (or to the successor building society of the successor, in relation to any time after a subsequent amalgamation or transfer; and so on).
Reclaim funds
5 Functions etc of a reclaim fund
(1) A "reclaim fund" is a company the objects of which are restricted by its articles of association to the following—
(a) the meeting of repayment claims;
(b) the management of dormant account funds in such a way as to enable the company to meet whatever repayment claims it is prudent to anticipate;
(c) the transfer of money to the body or bodies for the time being specified in section 16(1), subject to the need for the company—
(i) to have access at any given time to enough money to meet whatever repayment claims it is prudent to anticipate,
(ii) to comply with any requirement with regard to its financial resources that is imposed on it by or under any enactment, and
(iii) to defray its expenses;
(d) objects that are incidental or conducive to, or otherwise connected with, any of the above (including in particular the prudent investment of dormant account funds).
(2) Schedule 1 makes further provision about provision that must be made in the articles of association of a reclaim fund.
(3) An alteration by a reclaim fund of its articles of association is ineffective if it would result in—
(a) the company ceasing to have objects restricted to those mentioned in subsection (1);
(b) the company's articles of association not containing any provision that they are required to make under Schedule 1.
(4) The Treasury may give a direction to a reclaim fund requiring it—
(a) to give effect to any specified object that it has, or
(b) to comply with any specified obligation or prohibition imposed on it by a provision that its articles of association are required to make under Schedule 1.
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