Vol. 228 No. 7
asked the Minister for Industry and Commerce if the attention of his Department has been directed to the declared intention of certain building societies to impose an increase in the interest rate on money already loaned to house purchasers; and if he will seek immediate power from Dáil Éireann to prevent such an unfair imposition.
73.
asked the Minister for Industry and Commerce if his attention has been directed to the reported intention of certain building societies to increase the interest rate on money loaned to house purchasers; and if, having regard to the serious and unfair burden which such an imposition would be on householders who are struggling to buy their homes, he will make immediate arrangements for a public inquiry into this very serious and undesirable development.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 72 and 73 together.
I have no power under the Building Societies Acts to regulate the rates of interest charged by building societies. I am, however, aware that interest rates generally have been declining in recent months, and I am having inquiries made into the recently reported increase in loan charges of building societies. Until these inquiries have been completed, I shall not be in a position to decide whether any action on my part is called for. I understand that some societies do not propose to apply the increase to existing mortgages.
If the Minister has not got the power, having regard to what has happened, surely that is an indication that he should seek power in relation to this matter?
As I pointed out, until these inquiries have been completed, I shall not be in a position to decide whether any action on my part is called for. That should make it clear to the Deputy that if any action is necessary, it will be taken.
Is the Minister aware that there is widespread and grave disquiet about this announcement in connection with the proposed increase in interest rates? Can he say how soon he anticipates he will have the results of the inquiries before him? Does the Minister appreciate that expedition is called for in this matter and that it represents a grave injustice to many thousands of people trying to avail of these loans?
I am aware of widespread disquiet and of the necessity for expedition in dealing with the matter. The Deputy can rest assured that it will be dealt with without any undue delay.
Having regard to this disquiet which the Minister agrees is in existence, would he not ask the building societies concerned to desist from imposing these increases, pending the outcome of the inquiry?
I have no power to do that. I want to make it clear that I do not want to be taken as prejudging this matter, because the inquiries are proceeding. While I have said that I am aware of widespread disquiet, I am not to be taken as saying that the building societies are in the wrong. There is a prima facie case but that is not to be taken as final until we know the reasons for the steps that have been taken.
This is becoming a debate.
Surely it is obvious——
Question No. 74.
——that if the building societies are paying 4½ per cent to investors and charging eight per cent to borrowers something is wrong.
There is a prima facie case.
Question No. 74.
