I move that the Bill be now read a Second Time. This Bill was prepared in happier circumstances and to meet the situation existing in other times; but as it was ready for circulation and as I did not think it would take much time, I thought it desirable to bring it before the House. Some time ago, in order to consider the means by which building societies could be helped to make a bigger contribution towards the financing of house purchase, the Department of Local Government held discussions with the representatives of the banks and of the building societies, and as a result of those discussions provision was made in the Housing Act of 1941 to enable the banks to give financial accommodation to the building societies in approved cases, where the local authority is prepared to guarantee repayment. One of the purposes of the present Bill is to put those societies in a position to avail, as far as possible, of the guarantee facilities open to them under Section 3 of the Housing Act of 1941.
The Bill also widens the limits within which societies may borrow money. It is provided in the existing law that the total amount received on deposit or loan by a society and not repaid may not at any time exceed two-thirds of the amount for the time being secured to the society by mortgages from its members. It is proposed in this Bill to raise the ratio from two-thirds to three-fourths and to exclude from the operation of the limits so imposed any loans that may be received by the societies under guarantees provided for in the Housing Act of 1941.
The only other point with which the Bill deals is that of collateral security. In determining the amount of any advance which a society might make to a borrower, the society in some cases takes into account any satisfactory additional security as well as freehold or leasehold security offered. There can be no objection to this practice, and to remove any doubt which may exist as to its legality it is desirable to put it into legislative form, and it is proposed to do this in Section 3 of this Bill.
