House of Commons Amendments

House of Commons

Session 2007 - 08
Internet Publications
Other Bills before Parliament

Public Bill Committee: 18th November 2008
180

Banking Bill, continued

Bridge bank: reverse share transfer

Ian Pearson

nc11

To move the following Clause:—

‘(1)
This section applies where the Bank of England has made a bridge bank share

transfer instrument in accordance with section 28(2) (“the original instrument”)

providing for the transfer of securities to—

(a)
a company wholly owned by the Bank of England,

(b)
a company wholly owned by the Treasury, or

(c)
a nominee of the Treasury.

(2)
The Bank of England may make one or more bridge bank reverse share transfer

instruments in respect of securities issued by the bridge bank and held by a person

within subsection (1)(a) to (c).

(3)
A bridge bank reverse share transfer instrument is a share transfer instrument

which—

(a)
provides for transfer to the transferor under the original instrument;

(b)
makes other provision for the purposes of, or in connection with, the

transfer of securities which are, could be or could have been transferred

under paragraph (a).

(4)
Sections 7, 8 and 47 do not apply to a bridge bank reverse share transfer

instrument (but it is to be treated in the same way as any other share transfer

instrument for all other purposes including for the purposes of the application of

a power under this Part).

(5)
Before making a bridge bank reverse share transfer instrument the Bank of

England must consult—

(a)
the FSA, and

(b)
the Treasury.

(6)
Section 25 applies where the Bank of England has made a bridge bank reverse

share transfer instrument.’.

Reverse property transfer

Ian Pearson

nc12

To move the following Clause:—

‘(1)
This section applies where the Bank of England has made a property transfer

instrument in accordance with section 11(2) (“the original instrument”) providing

for the transfer of property, rights or liabilities to a bridge bank.

(2)
The Bank of England may make one or more reverse property transfer

instruments in respect of property, rights or liabilities of the bridge bank.

(3)
If the Bank of England makes an onward property transfer instrument under

section 40 the Bank may make one or more reverse property transfer instruments

in respect of property, rights or liabilities of a transferee of any of the following

kinds under the onward property transfer instrument——

(a)
a company wholly owned by the Bank of England,

(b)
a company wholly owned by the Treasury, or

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Banking Bill, continued

(c)
a company wholly owned by a nominee of the Treasury.

(4)
A reverse property transfer instrument is a property transfer instrument which—

(a)
provides for transfer to the transferor under the original instrument

(where subsection (2) applies);

(b)
provides for transfer to the bridge bank (where subsection (3) applies);

(c)
makes other provision for the purposes of, or in connection with, the

transfer of property, rights or liabilities that are, could be or could have

been transferred under paragraph (a) or (b) (whether the transfer has been

or is to be effected by that instrument or otherwise).

(5)
Sections 7, 8 and 46 do not apply to a reverse property transfer instrument (but it

is to be treated in the same way as any other property transfer instrument for all

other purposes including for the purposes of the application of a power under this

Part).

(6)
Before making a reverse property transfer instrument the Bank of England must

consult—

(a)
the FSA, and

(b)
the Treasury.

(7)
Section 39 applies where the Bank of England has made a reverse property

transfer instrument.’.

Temporary public ownership: reverse property transfer

Ian Pearson

nc13

To move the following Clause:—

‘(1)
This section applies where the Treasury have made a property transfer order in

accordance with section 41(2) (“the original order”) providing for the transfer of

property, rights or liabilities to a company wholly owned by—

(a)
the Bank of England,

(b)
the Treasury, or

(c)
a nominee of the Treasury.

(2)
The Treasury may make one or more reverse property transfer orders in respect

of property, rights or liabilities of the transferee under the original order.

(3)
A reverse property transfer order is a property transfer order which—

(a)
provides for transfer to the transferor under the original order;

(b)
makes other provision for the purposes of, or in connection with, the

transfer of property, rights or liabilities which are, could be or could have

been transferred.

(4)
Sections 7, 8 and 9 do not apply to a reverse property transfer order.

(5)
A reverse property transfer order is to be treated—

(a)
in the same way as a share transfer order for the procedural purposes of

section 24, but

(b)
as a property transfer instrument for all other purposes (including for the

purposes of the application of a power under this Part).

(6)
In the application of section 36 by virtue of subsection (5)(b) above, the power to

give directions under section 36(7) vests in the Treasury (instead of the Bank of

England).

Public Bill Committee: 18th November 2008
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Banking Bill, continued

(7)
Before making a reverse property transfer order the Treasury must consult—

(a)
the FSA, and

(b)
the Bank of England.

(8)
Section 39 applies where the Treasury have made a reverse property transfer

order.’.

Continuity obligations: consideration and terms

Ian Pearson

NC17

To move the following Clause:—

‘(1)
The Treasury may by order specify matters which are to be or not to be considered

in determining—

(a)
what amounts to reasonable consideration for the purpose of sections 57

to 60;

(b)
what provisions to include in accordance with section 58(3)(b) or

60(3)(b).

(2)
An order—

(a)
shall be made by statutory instrument, and

(b)
shall be subject to annulment in pursuance of a resolution of either House

of Parliament.

(3)
A continuity authority may give guarantees or indemnities in respect of

consideration for services or facilities provided or to be provided in pursuance of

a continuity obligation.

(4)
In this section “continuity authority”—

(a)
in relation to sections 57 and 58, means the Bank of England, and

(b)
in relation to sections 59 and 60, has the same meaning as in those

sections.’.

Continuity obligations: termination

Ian Pearson

NC18

To move the following Clause:—

‘(1)
The continuity authority may by notice terminate an obligation arising under

section 57 or 59.

(2)
The power under subsection (1) is exerciseable by giving a notice to each

person—

(a)
on whom the obligation is imposed, or

(b)
who has benefited or might have expected to benefit from the obligation.

(3)
In this section “continuity authority”—

(a)
in relation to section 57, means the Bank of England, and

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Banking Bill, continued

(b)
in relation to section 59, has the same meaning as in that section.’.

Evidence

Ian Pearson

NC19

To move the following Clause:—

‘In section 433(1) of the Insolvency Act 1986 (admissibility of statements of

affairs) after paragraph (aa) (inserted by section 115 above) insert (before the

“and”)—

“(ab)
a statement made in pursuance of a requirement imposed by or

under Part 3 of that Act (bank administration),”.’.

Objectives of the compensation scheme for depositors

Mr Mark Hoban

Mr David Gauke

NC1

To move the following Clause:—

‘(1)
This section sets out the objectives for the compensation scheme for depositors.

(2)
Objective 1 is to maintain customers’ confidence in the UK banking system

regardless of whether the bank is incorporated in the UK or another EEA country.

(3)
Objective 2 is to be able to make payments to depositors within seven days and

to have eligibility criteria, qualification processes and information requirements

which facilitate that.

(4)
Objective 3 is to ensure that there are compensation arrangements for each bank

brand.

(5)
Objective 4 is to require that the scheme pays customers their gross balance and

that any amounts due from customers are collected in the usual way.’.

Compensation payable to depositors

Mr Mark Hoban

Mr David Gauke

NC2

To move the following Clause:—

‘(1)
Each depositor will be entitled to receive from the manager of the scheme referred

to in section [Objectives of the compensation scheme for depositors] a sum which

is the lower of—

Public Bill Committee: 18th November 2008
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Banking Bill, continued

(a)
the deposit protection amount; and

(b)
the gross balance held by the person.

(2)
The “deposit protection amount” is £50,000.

(3)
The Treasury may by order amend the figure in subsection (2).

(4)
An order under this section may not be made unless a draft statutory instrument

containing such an order has been laid before, and approved by a resolution of,

each House of Parliament.’.

Court’s discretion in mortgage possession proceedings

Ms Sally Keeble

Mr Mark Todd

NC7

To move the following Clause:—

‘In the Housing Act 1980 (c.51), after section 89 insert—

“89A
Court’s discretion in mortgage possession proceedings

(1)
This section applies where, in possession proceedings brought by a

mortgagee under a mortgage agreement (whether or not regulated by any

enactment), it appears to the court that the property is occupied by a

person or persons whose occupation derives from an interest or licence

created by the mortgagor under that agreement (whether or not such

interest or licence was created in breach of the terms of that agreement).

(2)
Where subsection (1) applies, the court may postpone the date of

possession, or stay or suspend execution of the order, for such period or

periods as the court thinks just, not exceeding three months in total.

(3)
On any such postponement, stay or suspension as is referred to in

subsection (1), the court may, unless it considers that to do so would

cause hardship to the occupier or would otherwise be unreasonable,

impose such conditions as it thinks fit with regard to the payment by the

occupier of sums for the use and occupation of the premises (not

exceeding the amount of the rent or other contractual payment which the

occupier was liable to pay under his agreement with the mortgagor).

(4)
Rules of court shall provide for appropriate notices to be served on the

residential occupier of any premises prior to the commencement and in

the course of possession proceedings brought by a mortgagee of those

premises; and shall provide for the occupier to be heard by the court,

whether by being joined as a party to the proceedings or otherwise.

(5)
In fixing the period of any such postponement, stay or suspension as is

referred to in subsection (2) and in deciding whether to impose conditions

under subsection (3), the court shall have regard to all the circumstances,

including—

(a)
the terms, and in particular the duration, of the agreement

between the occupier and the mortgagor;

(b)
the interests of any children or other vulnerable members of the

occupiers household;

Public Bill Committee: 18th November 2008
185

Banking Bill, continued

(c)
the fact (if applicable) that the occupier’s agreement with the

mortgagor has been terminated prematurely;

(d)
the availability of suitable alternative accommodation;

(e)
whether the tenancy or licence between the mortgagor and the

occupier was created in breach of the terms of the mortgage

agreement, and whether the occupier was aware that his

occupation constituted such a breach;

(f)
whether the mortgagee knew, or ought to have known, that the

premises were to be let or licensed by the mortgagor, in the

course of business or otherwise;

(g)
any prejudice which would be caused to the mortgagee by the

deferment of possession or execution; and

(h)
any hardship which would be caused to the occupier by a

decision not to defer possession or execution.

(6)
For the avoidance of doubt, nothing in this section affects the right of a

person whose interest in the property pre-dates, or otherwise ranks in

preference to, the interests of the mortgagee.’”.

Reform of the law of mortgages

Dr John Pugh

Mr Colin Breed

NC14

To move the following Clause:—

‘For section 36 of the Administration of Justice Act 1970 substitute—

“36
Actions by mortgagees for possession

(1)
All mortgages securing a loan of money or other form of credit on

residential premises shall be enforceable only upon the mortgagee

obtaining an order of the court.

(2)
A power of sale which becomes exercisable by a mortgagee of residential

premises, whether under the mortgage agreement or by virtue of sections

101 to 103 of the Law of Property Act 1925, shall be exercised only

following an order for possession granted by the court.

(3)
Where a mortgagee under a mortgage of residential premises brings an

action in which he claims possession, the court may exercise any of the

powers in subsection (4) if it appears to the court that it is reasonable in

all the circumstances to do so.

(4)
In a possession claim of the kind specified in subsection (3) the court

may, if it considers it just to do so—

(a)
adjourn the proceedings;

(b)
make the operation of any term of the order conditional on the

doing of specified acts by any party to the proceedings;

(c)
suspend the operation of any term of the order; or

(d)
at any time before execution of a judgment or order, postpone the

date of possession, or stay or suspend execution of the judgment

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Banking Bill, continued

or order, for such period or periods as the court thinks reasonable

or until such time as the court subsequently directs.

(5)
For the avoidance of doubt, the court’s powers under subsection (4) exist

in relation to any mortgage or charge under which a loan of any kind is

secured upon residential property, irrespective of the purpose for which

the loan was taken out or of the relative priority of the loan or of

regulation by any other enactment.

(6)
On making an order under subsection (4), the court shall impose such

conditions with regard to payment by the mortgagor of any sum secured

by the mortgage or the remedying of any default as the court thinks fit.

(7)
Notwithstanding the terms of any agreement, a mortgagee of residential

premises shall be entitled to charge to the mortgagor the costs of and

ancillary to proceedings for possession or for recovery of any sums due

under the mortgage only if, and to the extent that, the court makes an

order for costs in his favour.

(8)
The remedy of foreclosure shall no longer apply to mortgages of

residential premises.

(9)
In this section “residential premises” mean any premises comprising or

containing a dwelling.

(10)
Nothing in this section affects the power of the court to make a time order

or other orders under sections 129 to 140B of the Consumer Credit Act

1974 in relation to agreements regulated by that Act.”’.

Court’s discretion in mortgage possession proceedings brought by a bank

Ms Sally Keeble

Mr Mark Todd

NC15

To move the following Clause:—

‘In the Housing Act 1980 (c. 51), after section 89 insert—

“89A
Court’s discretion in mortgage possession proceedings brought by a

bank

(1)
This section applies where, in possession proceedings brought by a

mortgagee under a mortgage agreement (whether or not regulated by any

enactment)—

(a)
it appears to the court that the property is occupied by a person

or persons whose occupation derives from an interest or licence

created by the mortgagor under that agreement (whether or not

such interest or licence was created in breach of the terms of that

agreement), and

(b)
the mortgagee is a bank within the meaning of section 2 of the

Banking Act 2008.