Mr. S. James A. Hillasked the Secretary of State for Trade and Industry if he will list his powers over the interest charges and procreation fees now being demanded by moneylenders and mortgage service companies.
§ Sir G. HoweI have no control over the charges and fees of licensed moneylenders, but the courts have power to reopen any of their agreements when they consider the terms to be harsh and unconscionable. I have power to exempt companies from the provisions of the Moneylenders Acts, under Section 6(e) 395W of the Moneylenders Act 1900, and I also have power under Section 123 of the Companies Act 1967 to certify that a person can properly be treated for the purposes of the Moneylenders Acts as bona fide carrying on the business of banking and therefore exempt from the provisions of those Acts.
Mr. S. James A. Hillasked the Secretary of State for Trade and Industry what is his policy towards the use of his powers in relation to the charges by way of interest rates and procreation fees now being charged in obtaining first and second mortgages from moneylenders and mortgage service companies.
§ Sir G. HoweThe companies which hold exemptions under Section 6(e) of the Moneylenders Act 1900 are not permitted to charge more than 12½ per cent. per annum on their loans. Holders of certificates under Section 123 of the Companies Act 1967 are not specifically restricted as to the rate of interest which they may charge for loans, but harsh treatment of borrowers is one of the 396W matters which may be relevant to the question of whether a person can properly be treated as carrying on the business of banking for the purposes of the Moneylenders Act and therefore be entitled to continue to have the benefit of such certification.