MORTGAGE ADJUSTMENTS

Taranaki Central Press, Volume IV, Issue 393, 27 March 1937, Page 6

MORTGAGE ADJUSTMENTS

STOPPING ACCOUNTS Banks Concerned Over Effects of a Section. Press Association —Copyright. Wellington, March 26. "It is the desire of the Government that customers of banks should not be embarrassed by the stoppage of thenaccounts merely because they have made application for the adjustment of their liabilities under the Mortgagors and Lessees Rehabilitation Act of last year,” said the Attorney-Gen-eral, Hon. H. G. R. Mason, in a statement to-day. The Minister explained that concern had been expressed in 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. "It any legislation is necessary to protect banking institutions from loss through the operation of Section 58 of the Act, if merely in good faith and having no reasonable grounds for supposing that there is a. contravention of the section they carry on their customers in the 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 ordinary 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 iii contravention of the section, the Government does not expect banks to make inquiry as to the purpose for which the cheques are drawn. "It is understood." continued Mr. Mason, “that this statement, is not to be construed in any way as a promise of indemnity or a guarantee by the Government to banks and that the Government undertakes no financial responsibility in the matter.”