This Bill, which is of no great importance, was decided upon some time ago but was only recently produced from the draftsman's office. The purpose of the Bill is to extend the borrowing powers of certain building societies and to put them in a position to avail of any guarantees which may be given under the Housing (Amendment) Act, 1941. That Act provided that banks could give financial accommodation to building societies in approved cases where the local authority was prepared to guarantee repayment. The main purpose of this Bill is to increase the borrowing powers of building societies. The Building Societies Act, 1894, provides that the total amount received on deposit or loan by the society must not at any time exceed two-thirds of the amount for the time being secured to the society by mortgages from its members. This Bill raises that ratio from two-thirds to three-fourths and, secondly, excludes from the operation of the limit so imposed any loans raised by the societies under guarantees provided for in the Housing (Amendment) Act, 1941. The aim in making these changes in the law relating to building societies was to facilitate them in their operations and enable them to play a greater part in the rehousing activities upon which the Government were engaged. As Senators are aware, other causes have operated to curtail these activities and, consequently, it will not be possible for building societies to take advantage of the provisions of this measure until the conclusion of the emergency.
The only other point with which the Bill deals is that of collateral security. In determining the amount of an advance which a society may make to a borrower, the society in some cases takes into account any satisfactory additional security, as well as the freehold or leasehold security offered. There can be no objection to that practice, but its legality is in some doubt and advantage is being taken of the introduction of this Bill to remove that doubt. I do not think that there can be any great controversy about the measure. The alterations in the law relating to building societies which it makes are, if anything, overdue. I think that they should have been made earlier. When normal conditions are restored, they will permit these building societies to play a larger part in housing activities than it has been possible for them to play heretofore.