CASH ISA jargon

May · 10 May 2005 at 2:48PM

CASH ISA jargon I am looking to open a mini cash ISA and I am confused as to what the following statement that I must agree to, actually means.

The Society wishes to avoid disruption to its business caused by speculators and to allow customers access to its competitive savings accounts and mortgages. Therefore all new customers opening a savings account or applying for a mortgage, which confers membership of the Society, are required to agree to assign any windfall conversion benefits to which they might become entitled to the Yorkshire Building Society Charitable Foundation. In certain circumstances the Society may not apply this requirement, for example on the death of a saver (who was not subject to the charitable assignment) where the money is transferred into a new customer account opened by the beneficiary.

Can anyone explain this in friendly terms?

grumbler · 10 May 2005 at 3:57PM

Building societies do not have shareholders - only members that have financial products with them. If BS floats on the stock market members are eligible for windfall benefits resulting from selling shares. As a result a lot of professional ‘carpetbaggers’ campaign for demutualisation of building societies in order to get windfall money.
By asking you to sign such a document BS tries to protect its mutual status - you have no interest to campaign for demutalisation in future.

simonleblank · 10 May 2005 at 4:02PM

I thought this had died? Any chance of windfalls with any BS? - Reason I ask is I still have a few accounts open with small balances.

May · 10 May 2005 at 4:13PM

Thanks for the info.

Paul_Varjak · 10 May 2005 at 4:24PM

The Yorkshire Building Society (like all building societies) is owned by its members (people who open accounts with them) rather than shareholders - as is the case for banks.

Some Building Societies converted to banks a few years ago and the 'members' (account holders) were paid money on that conversion (my mum did quite well with a few of them).

So, in order to stop people opening accounts (with just a few pounds in them) in the hope that it will convert to a bank, most (probably all) Building Societies have such a clause.

muddyfox470 · 10 May 2005 at 4:52PM

Paul Varjak is indeed correct.

This was mentions and covered in this saturdays, Jobs and Money section in the guardian.

It was put in place to stop loads of unscrupulous savers joining, in the hope to gain massive windfalls if they were taken over!

But only some BS will allow you to become a member after 3/5 years service. However for mortgages this is different, you automatically become a member, supposedly!

Ian

carnet · 10 May 2005 at 5:36PM

In the case of a BS, whose Rules require a certain % of its membership to approve a DM before it can go ahead, there is a very good chance that any "sign-away" will be "cancelled".

Look what has recently happened with the Standard Life signaway. They need 75% of the voting members to approve their DM, so have quickly "dropped" their infamous 3 year signaway, thus overnight giving windfall rights to circa 400K voting members who were previously "signed-away".

And how are most, if not all, of these members going to vote, I wonder

.

Milarky · 12 May 2005 at 8:42AM

In certain circumstances the Society may not apply this requirement, for example on the death of a saver (who was not subject to the charitable assignment) where the money is transferred into a new customer account opened by the beneficiary

This part could be about spouse's rights where they become joint account holders with an existing member - who then dies suddenly. The existing member's rights transfer immediately to both accountholders [I think!]

CASH ISA jargon

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