NI Presbyterian mutual society, Short of funds for withdrawal?
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Hi friends, Sunday Sequence did a good piece on the PMS at the start of the programme this morning.0
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Any chance of giving us the gist of the Sunday Sequence programme - unfortunately my speakers dont work.0
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At the start John McFall is talking to Alistair Darling about the serious hardship the savers are facing. Mr McFall accepts that regulation is a devolved issue and asks the Chancellor if there will be any compension for the savers who are losing out through no fault of their own. Chancellor replies he is very aware of our plight and has sympathy for those with money in what is or what was thought to be an Industrial & Provident Society.
He is aware the FSA are carrying out an investigation to see if PMS became a bank ie. making lending and taking deposits. If it was an Ind. & Prov. Soc. it should be regulated by DETI in NI. If it was a bank it should be regulated by FSA. He said the facts needed to be found out and the problem dealt with quickly.
Interviewer: Last week the Newsletter reported there may be a loophole affecting many Ind. & Prov. Socities in NI.
Prof. Sally Wheeler - Company law expert - Queens
She said there was a legal maze concerning Prov. societies. The investigation carried out by FSA will establish exactly the business of PMS.
Definition of a bank: A legal entity that carries on investment for profit.
If PMS were banking they should have been regulated by FSA.
Arthur boyd is taking into consideration matters that have been raised in his investigation. He is examining the regulatory framework before PMS went into administration. He continues to discuss with Govt. re a solution and will keep savers up to date.Had PMS been regulated by FSA they would have had access to the compension scheme. They were not regulated by FSA therefore had no access to compensation scheme. This is the issue for savers.
Prof. Sally wheeler said she was not sure if there was a loophole - there is confusion between registration and regulation.
PMS was correctly registered - however regulation is an issue - to be regulated by FSA they would have to be operating under one of the following:-
they would have to be operating -in terms of commercial lending
-arranging investments
- operating as a bank
- providing home finance
- or arranging home finance
They would not be considered as a bank if they were lending personal loans to individuals. Lending personal loans to individuals does not make you a bank.
Arthur Boyd is looking to see if the Directors crossed the line:-
He will examine - who they made loans to
- that they knew what the money was used for
- who deposits were taken from
Failure to apply for authorisation can lead to criminal sanctions - up to 2 years in prison. This will not bring the investors their money back but it might make them feel better. (Sally Wheeler's words - not mine!):D
Sally Wheeler also said - The fall out - it is possible that tighter regulation is required - better regulation for Ind. & Prov. Socs. Maybe all should be regulated by FSA and should pay the levy.
It is easy when the economy is booming to cross the line and operate as a bank. The financial regulation need to be clear as to who regulates who.0 -
''Sunday Sequence - the important bits!''
What a brilliant report....thank you so much for taking the time to type this up and post it on here :T0 -
Thanks sickasaparrot
I think it still falls into a serious loophole - in DETI - regulation vs registration.
PMS took our savings - and gave us shares and loan certificates - this was the way it was done because it was an Ind and Prov Society. Still banking in theory but practice looks different!!
I'm also sure if they lent out money - to all and sundry - property developers, homes etc - this was again banking - to earn income (remember churches got a better rate than others) - but again was it done in the form of a LOAN to keep within their rules?
I'm wondering did the PMS stay within their remit as an Ind and Provident Society - however stepped outside because of the enormity and risk - but didn't actually didn't use the word MORTAGES - BUT INSTEAD USED THE WORD LOANS/
In other words - played the banking game within the Ind and Provident Rules!
They might have kept in the clear with the houses etc but surely lending to Property Devolopers etc is commercial lending!!0 -
Thanks sickasaparrot
I'm wondering did the PMS stay within their remit as an Ind and Provident Society - however stepped outside because of the enormity and risk - but didn't actually didn't use the word MORTAGES - BUT INSTEAD USED THE WORD LOANS/
The word mortgage is used in the 2007 accounts, in fact there is a whole section on them on page 6.
The word mortgage is used on the 2002 website
Was buying the commercial property "arranging investments"?
It was described as "investment property""Our Society is one of the great successes of our Church"
Rev. Sidlow McFarland - Chairman's Report - PMS Annual Report and Accounts 20070 -
Thank you to Paul Lewis Radio (4 Money Box programme) and again to the Newsletter to day for highlighting this serious problem which seems to have been going on for such a long time and causing such distress to many people. ( The Newsletter has been wonderful )
I am sorry I can't give you a link0 -
BelfastGran wrote: »Thank you to Paul Lewis Radio (4 Money Box programme) and again to the Newsletter to day for highlighting this serious problem which seems to have been going on for such a long time and causing such distress to many people. ( The Newsletter has been wonderful )
I am sorry I can't give you a link
linky
http://www.newsletter.co.uk/news/39Ulsterbased39-PMS-losing-out.5143658.jp0 -
The FSA were called in quite early - approximately four and half months ago - does it really take this long to report their findings? Surely the FSA, Arthur Boyd and Arlene Foster all know the position now.
We should be asking her to what is going on?0
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