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Dáil Éireann debate -
Tuesday, 29 Oct 1968

Vol. 236 No. 9

Ceisteanna—Questions. Oral Answers. - Building Societies Loans.

42.

asked the Minister for Industry and Commerce if building societies are permitted to advance loans for purposes other than for private house building.

The Building Societies Acts do not prohibit building societies from making loans for purposes other than the purchase of private houses. An examination of the statutory annual returns of the principal building societies for 1967, however, indicates that the amount advanced for purposes other than for private houses was less than eight per cent of the total.

If I understood the Minister correctly he said that no permission is given for the advancement of loans for the purpose of building private houses?

What I said was that the Building Societies Acts do not prohibit building societies from making loans for purposes other than purchase of private houses.

Did the Minister say that it comprises eight per cent of their business?

I said that an examination of the statutory annual returns of the principal building societies for 1967 indicates that the amount advanced for purposes other than private houses was less than eight per cent of the total. I would point out to the Deputy that the returns distinguished between the building of private houses and other purposes. "Other purposes" may include reconstruction of houses or other items to do with——

Office buildings would be included?

They could be.

They are. I suggest that they are.

Yes, as I have told the Deputy——

That is against the principle for which building societies were established.

If I were——

That was stated by the Minister for Local Government not so long ago.

If I were satisfied that there was any significant development in this regard I would be prepared to take action. While it may be within the letter of the Building Societies Acts I do not think it would be within the spirit of the Acts.

The Minister spoke of the review of resources of the principal societies revealing that the amount advanced for building other than private houses being something less than eight per cent of the total. Would he ask his Department to carry out a survey of each building society with a view to determining whether some societies do not come within that category which he has mentioned and devote up to 50 per cent of their loan resources to purposes other than housebuilding?

I cannot refute the suggestion made by the Deputy, although it would surprise me if it was true. Certainly, the building societies to which I have referred here are the really significant——

The larger ones.

——ones. I should say, perhaps, that in the survey that has been made regard has been had to the activities of individual societies and it would appear that one of the building societies is going beyond the average. Inquiries are being made as to the causes of this. I have pointed out that the heading "other purposes" can include things which have to do with matters relating to house building.

If the Minister finds that an individual society which does not belong to the category of the average large responsible society, has been using money substantially for purposes other than houses I take it that——

I would be prepared to take action.

I hope the Minister will make the inquiries.

I will.

43.

asked the Minister for Industry and Commerce if representations have been made by him to building societies to have the mortgage rates reduced in view of the recent reduction in the bank loans rate.

The possibility of a reduction in mortgage interest rates has been under discussion with the building societies and further meetings are proposed for this purpose. It will be necessary to wait, however, to see how the recent reduction in the bank deposit rate will affect the flow of funds to the societies.

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