asked the Minister for Local Government if he will examine sympathetically the plight of house purchasers whose SDA loans had been approved in 1975, who were notified of the fact their loan cheques were available for collection and who now, through circumstances beyond their control, are being charged the 1976 interest rate of 12½ per cent; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - House Purchase Loans.
11.
Under the Housing Authorities (Loans for Acquisition or Construction of Houses) Regulations, 1972, the determination of the rate of interest to be charged on a house purchase loan is a matter for the housing authority concerned and is not one in which I can intervene. The housing authority must, however, have regard to the interest rate which they must pay in respect of money raised to finance their loans schemes and, since 1st January, 1976, this rate has been 12½ per cent.
Would the Minister accept that where the local authority advised the applicant that payment should now be made, in those circumstances there would be an obligation on the local authority to make money available at the rate prevailing at the time of the notice?
I do not know the circumstances to which Deputy Tunney is referring. If a local authority decided that somebody was entitled to a loan and if that person drew some of the loan—any portion of it —as Deputy Tunney knows, the prevailing rate is the rate at which they borrow it. If, in fact, they cleared it but did not start building or did not apply for an instalment of the loan maybe for months, maybe for a couple of years, as has happened, does Deputy Tunney suggest that the person should continue to get the loan at the rate mentioned in the first place?
The Minister is now talking about a hypothetical case. I am talking about a practical one.
I have not heard it.
I will give it. In the case of an application the applicant was notified last October that the cheque was ready for collection. He was also told to advise a solicitor accordingly. The applicant did this. Because of a backlog in the local authority or because of circumstances where they were not able to administer this as quickly as possible, the appointment for collecting the cheque was not made until the 3rd January, 1976. Does the Minister think it is fair to charge that applicant the new rate of interest?
No, I do not. If Deputy Tunney will give me particulars of that case I will be glad to take them up with the local authority concerned. This is the sort of thing I feel very strongly about, particularly in relation to some of the larger local authorities: that people are promised cheques and are not paid that money for a very long time. I wish more people would complain about this and we would not have the situation we have now.
Question No. 12.
Is it not a fact that this exorbitant interest rate of 12½ per cent on SDA loans is putting those loans outside the scope of the worker for whom they were intended in the first place?
A total of £48 million has been applied for, although there is only £42 million to meet it. Deputy Faulkner is not quite sure of his facts.
I want to call some of what I believe is the Minister's bluff in relation to this question. Is it not true that, once a Minister for Finance announces an increase in interest rates from a specific date, the money from the Local Loans Fund to the housing authority, by a motion passed at its meeting, approves the payment of the new interest rate and that no further moneys that have not been paid out are available to that housing authority until that motion is carried by the local authority?
Deputy Fitzgerald has not got his facts correct, although I think he was a member of a local authority for some time. He does not seem to understand how local authorities work. A lot of money could be in the possession of the local authority and it is only to money which has not been issued from the Local Loans Funds that this would apply. Deputy Tunney said that the cheque was ready to be paid out. In that case the money must have been available at local level to meet that cheque. In that case there is no question whatever of what Deputy Fitzgerald is talking about affecting this matter.
I want to ask a brief question on the point raised by the Minister.
Next question. Will Deputies please allow Question Time to continue?
I will be very brief.
No. Next question.
(Interruptions.)