STRINGENT CONTROL

Poverty Bay Herald, Volume LX, Issue 18253, 23 November 1933, Page 7

STRINGENT CONTROL

MONEY-LENDING BUSINESS PROTECTING BORROWERS MAXIMUM INTEREST RATE (Parliamentary Reporter.) WELLINGTON, this clay. Stringent control over money-lenders is proposed in the Money-Lenders’ Amendment Bill, which was introduced in the House last night. The -principal features of the measure are the institution of annual registration after a magisterial examination; the right of a borrower to ascertain the state of his account at am time; a limitation of interest to 48 per cent.; and the prohibition of contracts embodying compound interest. The new measure proposes that from April 1 next an annual license fee of £ls must bo paid for each registered address of a money-lender. E very application ior annual registration is to be considered by a stipendiary magistrate who shall refuse to grant registration, or renew it, it evidence is produced to show that a money-lender is not of good character, or has not complied with the regulations governing his business. No appeal is possible from a magistrate’s decision. Severe restrictions are proposed on money-lenders’ advertisements, the issue of circulars advertising the name, address, or telephone number of a moneyfender, or containing an invitation to borrow from a money-lender. To enter into a transaction involving the borrowing of money from a money-lender, or to apply with a view to obtaining information or advice as to the borrowing of any money from a money-lender is forbidden. Newspaper advertisements are to be limited to the address, telegraphic address, telephone number, and a statement that money is offered with or without security, particulars of the highest and lowest sums offered on loan, and a statement of the date when the business was first established. The employment of agents and canvassers is forbidden. The penalties under this section are a maximum of three months’ 1 imprisonment or a fine of £IOO, or both. Agreements made in defiance of this section are declared to be illegal. Where, after the bill is passed, it is found that the interest charged exceeds 48 per cent, per annum, the court shall, unless it is otherwise proved, assume that the interest charged is excessive, ■but power is still retained by the court to declare that interest at a less rate than 48 per cent, is excessive. Explaining the measure, the Hon. J. G. Cobbo said it was based on the Imperial Act of 1927. It provided that all money-lenders must be licensed by a magistrate, who would have to satisfy himself that the applicant was a reputable person. Mr. C. Carr (Lab., Timaru): And kind hearted.

The Minister said that it also provided that money-lenders would have to supply, a form stating the amount of loan, rate of interest and other particulars. A person borrowing money would be entitled on the, payment of a fee of a shilling to demand a statement of his account—how much had been paid and how much was owing.