§ Mr. Austin Mitchellasked the Secretary of State for Trade and Industry when he intends to exempt loans of less than £15,000 for housing purposes from building societies from the restrictions of the Consumer Credit Act.
§ Mr. HowardAll building society loans secured on first mortgage for house purchase, repair and improvement are already exempt from the requirements of the Consumer Credit Act. Other secured loans by building societies and other lenders will come within the scope of the Act. I consider it right in principle that the protection of the Act should be available to consumers who pledge their home as security in credit agreements.
I am aware of the view of some building societies that the need to comply with the Consumer Credit Act, to which other commercial lenders have been subject since May 1985, in respect of repair loans to owner-occupiers will make it difficult for them to participate in certain local schemes for property renovation. I am considering whether any further limited exemption from the requirements of the Act may be appropriate, but I would not be prepared to make any changes that would significantly weaken the protection available to borrowers or distort competition between the main commercial lenders.