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Dáil Éireann debate -
Thursday, 18 May 1967

Vol. 228 No. 10

Ceisteanna—Questions. Oral Answers. - Building Society Loan Charges.

22.

asked the Minister for Industry and Commerce if he has yet come to any decision in the matter of the intended loan increases by certain building societies; and if the Government are about to act in the matter as recently reported.

23.

asked the Minister for Industry and Commerce if he is now in a position to state the result of his inquiries into the recently reported increase in loan charges of building societies; and, if so, whether he proposes to take any action in the matter.

With your permission, a Cheann Comhairle, I propose to take Questions Nos. 22 and 23 together.

Inquiries in the matter of increases in rates charged to borrowers by building societies are under way in my Department. As I indicated in reply to questions on this matter on 11th May, 1967, I shall not be in a position to decide whether any action on my part is called for until these inquiries have been completed.

In view of the great urgency and the very wide public dissatisfaction which these proposals to increase interest rates have occasioned, would the Minister not consider that it should be possible to obtain the necessary information in a very short time so that he would be in a position to make a swift decision in the matter? Does he not agree that this is the kind of matter on which a rapid decision is not alone urgently desirable but manifestly required?

The Deputy is aware that it would be very easy to make a decision in this matter but that to make a correct decision requires proper investigation of the facts. The investigation is proceeding and will be completed as soon as possible. The Deputy will also be aware that where increases in rates have been notified, they are not due to come into operation for a few months yet.

Can the Minister say how is it possible to justify increases, in view of the fact that at present interest rates are falling, and these increases are proposed at a time when interest rates are declining?

The Deputy will recall that in reply to a question on this matter last week, I referred to the fact that interest rates are declining at the moment and that there is, therefore, a prima facie case to justify the allegation that the building societies should not have increased their rates, but it is only a prima facie case until the matter has been investigated thoroughly.

Has the Minister power to act in the event of the increase not being justified?

Probably not at the moment, but I think I have made it clear to the House that if action is called for and if I have not got the power to act, I shall seek that power.

Can the Minister say when he will be in a position to announce the result of his inquiry?

I am not in a position to say that yet, but it will be as soon as possible.

Did the Minister not say last week that he had the power?

I did say I had no power to control rates or charges. The matter is slightly complicated. It may be that in a certain limited class of cases I may have some power, but certainly over the whole range, there is no such statutory power. It might also be the case that such power will not be necessary. If it were to be the outcome of the inquiry that their increased rates were considered unjustified an indication to that effect to the building societies might be sufficient to get them to toe the line.

Does the Minister think that even after this departmental investigation he will have to send the matter to the Prices Commission?

Why should I?

Would it not be obvious that if the increases were not considered justified, the Prices Commission could take action? The Minister said he would have no power to take action.

Again this applies to a certain limited class of cases under the Prices Control Act, but in fact it would not be necessary to send it to the inquiry for action to take place. It is clear that the price control procedure applies to some of these cases but does not apply to all of them.

The result of the departmental examination will be that if he thinks the increases are not justified, he can do nothing, but if he sends the matter to the Prices Commission, he can.

That is not so.

If they have the power to do something, I have the power to do something.

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