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Tuesday, 8 March 1966

Mr McMahon - On 2nd December 1965, the honorable member for Bennelong (Sir John Cramer) asked in a question without notice whether terminating and permanent building societies would be liable to the recently announced charge to be made by banks on unused overdraft limits. In his answer my predecessor said it was his understanding that terminating building societies would be exempt but that he would check and let the honorable member know whether permanent building societies were similarly exempt.

I have made inquiries and confirm that terminating building societies are specifically exempted by the trading banks from the charge. Permanent building societies, however, are not specifically exempted.

As my predecessor indicated in the House, the categories of borrowers to be exempted from the charge were decided by the banks themselves. I assume that they see good reason to distinguish between terminating and permanent building societies. Perhaps I should add that the banks regard the arrangements they have announced as not being inflexible, and it will be open to them to exempt particular customers from the charge should they consider such action to be warranted.

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