Mr. Hawkinsasked the Chancellor of the Exchequer if he will make a further statement about the proposal that building societies should belong to an ombudsman scheme.
§ Mr. Ian StewartIn accordance with undertakings I gave during Committee stage of the Building Societies Bill, the Government propose to introduce amendments to the Bill requiring societies to belong to an ombudsman488W scheme. Such a scheme will need approval by the Building Societies Commission, and will have to be administered by a body independent of the member societies.
Building societies will be obliged to belong to a scheme in respect of the opening, operation and termination of share, deposit and class 1 or 2 loan accounts. The scheme need not cover the decision to grant or refuse a class 1 or 2 loan to new borrowers. In the case of other decisions turning on the creditworthiness of a member or depositor the ombudsman need not be empowered to over-ride the commercial judgment of the society, but may require it to reconsider its decision. Societies may, if they wish, belong to schemes covering other aspects of their operations.
I referred to this matter in a speech about the building society legislation delivered to the annual general meeting of the Metropolitan Association of Building Societies today. Copies have been placed in the Library.