HC Deb 23 July 1985 vol 83 cc493-4W
Mr. Shersby

asked the Chancellor of the Exchequer (1) what representations he has received in connection with the publication of the Green Paper "Building Societies: A New Framework", concerning the practice whereby certain building societies intervene when applications are made by their members to borrow funds from another source secured by a second charge by refusing to give consent to the registration of the charge and offer to tend money themselves for purposes unconnected with house purchase or home improvement; and if he will make it his policy to ensure that his proposed new legislation will include a code of practice to ensure fair competition for the provision of financial services;

(2) if, in considering the response he has received concerning the Green Paper, "Building Societies: A New Framework", he will make it his policy to ensure that his proposed new legislation will prohibit building societies and local authorities from operating a blanket refusal policy which prevents the registration of a second charge where a member wishes to secure a loan from another lender; and if he will ensure that competition for the provision of financial services is fair to all sectors of the financial market.

Mr. Ian Stewart

I have received a number of representations concerning the practice by some building societies of restricting entry by borrowers into a second mortgage. I am advised, however, that it is the exception rather than the rule for a borrower to require the society's consent to a second mortgage, and even more unusual for consent to be refused. There have been no recent complaints to either the Office of Fair Trading or the Building Societies Association about prohibitions on second charges, and in the light of this I have no plans for adding to the present system of controls on societies or local authorities.