Building Societies Act 1986 (Amendment) Bill: HL Bill 63 of 2023–24

The Building Societies Act 1986 (Amendment) Bill is a private member’s ballot bill which was introduced on 6 December 2023 by Julie Elliott (Labour MP for Sunderland Central). It is being sponsored in the House of Lords by Lord Kennedy of Southwark (opposition chief whip). The bill largely mirrors proposals set out in a government consultation launched in December 2021.

People who have mortgages or savings accounts with building societies are ‘members’. Members mutually own the building society. Building societies must get at least 50% of their funding from member deposits, ensuring members remain the primary owners. This is known as the funding limit calculation.

The bill would insert new provisions into the Building Societies Act 1986 that would ultimately enable building societies to exclude certain funds from their funding limit calculation. This is to create a more “level playing field”, according to the explanatory notes, for building societies and banks in terms of raising funds.

The bill would also allow for annual general meetings to take place with virtual participation and voting. In addition, it would modernise certain other corporate processes to align with the requirements for other companies, including banks, in the Companies Act 2006.

The government supports the bill, with the Treasury providing explanatory notes and an impact assessment. Some of the changes would need to be enacted by secondary legislation following the bill coming into law. The government has said that it is committed to doing so “as soon as possible”.

The bill has cross-party and industry support. The bill completed its House of Commons stages on 19 April 2024, receiving one amendment during report stage which was agreed without division. It is due to receive second reading in the House of Lords on 10 May 2024.