asked the Minister for Local Government if he is aware that building societies are advancing money to persons who have outstanding loans from Dublin Corporation and Dublin County Council under the SDA Acts to enable them to repay the capital sum outstanding under the Acts and to have anything from £1,000 to £2,000 on hands for non-housing purposes; and if he will take steps if necessary by the introduction of legislation to prevent the diversion of such funds from the provision of housing for those who need it.
Ceisteanna—Questions. Oral Answers. - Building Societies Housing Advances.
15.
While I am aware that special pre-payments to Dublin Corporation and County Council of house-purchase loans have averaged about £400,000 a year in recent years, I have no information as to the extent to which borrowers financed these pre-payments from building societies, other agencies or their own savings.
In any event, since the pre-payments are used by the housing authorities concerned, with my consent, to finance further house-purchase loans and grants, or for some other housing capital purpose, it is only the excess of any advance by a society over the amount of a pre-payment which could, as the Deputy indicates, represent a net loss of finance for housing—assuming that this excess is not, in fact, used by the borrower to improve or reconstruct his house.
In view of these considerations, and especially since the total pre-payments to the authorities mentioned, represent less than six per cent of the total advances made by building societies in recent years, I am not satisfied that legislation on the lines mentioned by the Deputy would be justified.
I may add that building societies generally are aware of my desire that their operations should as far as possible be directed towards helping persons in need of housing to acquire it, rather than towards helping persons already adequately housed, or towards any other purpose.
Will the Minister agree that the purpose of a building society is to provide money to buy houses, and that a person obviously cannot buy a house from himself? If that money is advanced, he should consider it a diversion of funds from the purpose for which they were intended. Are building societies not placed in a special position under the Building Societies Acts because their function is to provide money for people to buy houses?
The building societies are aware of my desire that their operations should be directed towards helping people who are not adequately housed to provide houses for themselves, and as I have already pointed out, even if all this money is paid to the corporation or the county council by way of pre-payments came from the building societies, it would still represent less than six per cent of the total advances made. In fact, this money that is received by the local authorities is used for housing purposes.
Is it not a fact that the building societies are put in a special position under the Building Societies Acts in consideration of the fact that they lend money to persons to buy houses? Can the Minister pretend to approve a procedure whereunder the building societies, having received the benefit of the Building Societies Acts, in fact constitute themselves as money lenders?
I do not pretend to approve of it, and I do not know that it is taking place.
It is taking place.
If it is, is it breaking the law? That is what would arise.
It should be stopped.