ADJUSTMENT OF MORTGAGES

Dominion, Volume 30, Issue 154, 27 March 1937, Page 10

ADJUSTMENT OF MORTGAGES

Banks Concerned Over Effects of a Section STOPPING ACCOUNTS Government Suggests Normal Business “Il i> the desire uf rhe Government that customers of banks should not lie embarrassed by the stoppage of their accounts merely because they have made an application for the .adjustment of their liabilities under the Mortgagors and Lessees Rehabilitation Act of last year.” said the Attorney-General, Hon. 11. G. R. Mason, in a statement. The Minister explained that concern had been expressed by banking institutions as to the effect of Section 58 of that Act.

“The Government desires banking institutions to carry on such customers’ accounts in respect of transactions in the ordinary course of business as if no application had been filed. ’ continued the .Minister. “If any legislation is necessary to protect banking institutions from loss through the operations of Section 58 of the Act, if merely iu good faith and having no reasonable grounds for supposing I here is a contravention of the section they carry on their customers in tlm usual way. then the Government will introduce the necessary legislation.

“It would, however, be wise for banks to notify overdrawn customers who have made application under the Act that they must not draw cheques except for reasonable living expenses and ondinary business purposes and to take all reasonable steps to see that, such advice is not ignored, but in the absence of reasonable grounds for supposing that a cheque is to be used in contravention of the section the Government. does not expect the banks to make inquiry as to the purpose for which cheques are drawn.

"It is understood that this statement is not to be construed in any way as a promise of indemnity or guarantee by the Government to the banks, and that the Government undertakes no financial responsibility in the'matter,” concluded Mr. Mason.