asked the Minister for Finance if he is aware of the anxiety felt that the current policy of the banks and building societies in refusing credit for business interests and house purchase will result in widespread unemployment by autumn; and if he will take steps, if necessary in consultation with the banks, to ensure that there is no restriction of credit for these purposes.
Ceisteanna—Questions. Oral Answers. - Availability of Credit.
4.
I am not aware that the position is as suggested in the Deputy's question.
As pointed out in my Budget Statement on 11th May, the commercial banks cannot afford to expand credit this year as liberally as in recent years. It would not be in the public interest to press the banks to expand credit more rapidly than they consider prudent having regard to the growth of the resources at their disposal. They have been encouraged, however, to ensure to the utmost possible extent that there would be no restriction of credit for productive purposes.
Would the Minister say, in regard to building societies, does he intend to make funds available to them to enable them to continue making loans for the purpose of building houses?
I do not, at the moment. My colleague, the Minister for Local Government, was in consultation with them and I do not see that any action is necessary along the lines suggested by the Deputy, following on these consultations.
Is the Minister aware that at present a number of persons to whom the building societies have undertaken to provide loans have now been informed that loans will not be made available and the building societies have in certain cases told applicants not to be bothering them, that they cannot consider making any loans because they have not got the money wherewith to make them? Is there not a perfectly simple solution: to make it possible for them, to put them in funds to enable them, to make loans?
The position is not exactly as stated by the Deputy. The building societies, apparently from year to year, do delay at certain times of the year in advancing loans. I understand the position is at present that they are dealing with applications on hand and are not accepting new applications.
If that is so, why are the building societies refusing to listen to people whose loans were approved and for whom houses have been built and yet are not granting the money that was approved over a year ago? This is contrary to what we heard from the Minister in his statement following his discussion with the building societies. People have the houses built for them; the building societies are refusing to pay them, refusing to answer registered letters and refusing to consider any representations made to them.
There is a credit squeeze on.
I understand that loans already sanctioned are being attended to.
I have heard of cases where the loans had been sanctioned but the people have not got the money and consequently cannot get into their houses. An insurance company will not insure a house for more than 90 days if it is not occupied. People cannot get the loan on foot of which they entered into a contract to purchase and the building societies are telling them that they are not prepared to discuss the matter with them on the ground that they have not got the money. If that is true, would the Minister consider calling in the building societies and telling them he will make funds available to them by way of deposit which he can do without any cost to the Government——
I am informed that sanctioned loans are being attended to.
They are being attended to on a queue basis whereby you may have an application in now and get it accepted in three or four months' time. Surely the Minister will admit there is a credit squeeze on. Can the Minister do nothing about it? This is contrary to what the Minister is telling us.
I am only conveying what information I have as a result of these negotiations between the building societies and the Minister for Local Government. We have taken the initiative in the matter. If the situation deteriorates to any extent then we can see what action is necessary.
It can hardly deteriorate. The Minister surely should take action if it does not improve.