Controls on interest rates supported

Press, 21 April 1984, Page 12

Controls on interest rates supported

PA Dunedin The Otago provincial executive of Federated Fanners supports moves by the Prime Minister, Sir Robert Muldoon, to impose further controls on interest rates because some local farmers are being charged too much interest. Some Otago fanners are still being charged between 16 per cent and 18 per cent on first mortgages in spite of instructions by Sir Robert to cut them to 11 per cent, says the president of the Otago executive, Mr J. M. Rose. “There is a deep concern

among members that some mortgage rates are not coming down to the stipulated rates as fast as they ought to,” Mr Rose said. Sir Robert has asked that first mortgage rates be limited to 11 per cent, while second mortgages go no higher than 14 per cent. He has warned that more controls are pending because some groups, particularly finance houses and merchant banks, “are trying to keep up more than their share of Business” with interest rates remaining above regulation provisions. Mr Rose said that while

the Rural Bank and trading banks had “taken the lead" by keeping rates down for farmers, insurance companies and the legal profession were not doing so. “It does seem that money which would otherwise be available for mortgage lending is going into the commercial market,” he said. “If the Minister of Finance (Sir Robert) is to take firmer action to bring interest rates down to the stipulated levels, we feel it is a worth-while move,” Mr Rose said. “We would give him our support.”