26 January 1994 2005 OFFICIAL RECORD of PROCEEDINGS
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HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 2005 OFFICIAL RECORD OF PROCEEDINGS Wednesday, 26 January 1994 The Council met at half-past Two o'clock PRESENT THE PRESIDENT THE HONOURABLE JOHN JOSEPH SWAINE, C.B.E., LL.D., Q.C., J.P. THE CHIEF SECRETARY THE HONOURABLE MRS ANSON CHAN, C.B.E., J.P. THE FINANCIAL SECRETARY THE HONOURABLE SIR NATHANIEL WILLIAM HAMISH MACLEOD, K.B.E., J.P. THE ATTORNEY GENERAL THE HONOURABLE JEREMY FELL MATHEWS, C.M.G., J.P. THE HONOURABLE ALLEN LEE PENG-FEI, C.B.E., J.P. THE HONOURABLE MRS SELINA CHOW LIANG SHUK-YEE, O.B.E., J.P. THE HONOURABLE HUI YIN-FAT, O.B.E., J.P. THE HONOURABLE MARTIN LEE CHU-MING, Q.C., J.P. DR THE HONOURABLE DAVID LI KWOK-PO, O.B.E., LL.D., J.P. THE HONOURABLE NGAI SHIU-KIT, O.B.E., J.P. THE HONOURABLE PANG CHUN-HOI, M.B.E. THE HONOURABLE SZETO WAH THE HONOURABLE TAM YIU-CHUNG THE HONOURABLE ANDREW WONG WANG-FAT, O.B.E., J.P. THE HONOURABLE LAU WONG-FAT, O.B.E., J.P. THE HONOURABLE EDWARD HO SING-TIN, O.B.E., J.P. THE HONOURABLE RONALD JOSEPH ARCULLI, O.B.E., J.P. 2006 HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 THE HONOURABLE MARTIN GILBERT BARROW, O.B.E., J.P. THE HONOURABLE MRS PEGGY LAM, O.B.E., J.P. THE HONOURABLE MRS MIRIAM LAU KIN-YEE, O.B.E., J.P. THE HONOURABLE LAU WAH-SUM, O.B.E., J.P. DR THE HONOURABLE LEONG CHE-HUNG, O.B.E., J.P. THE HONOURABLE JAMES DAVID McGREGOR, O.B.E., I.S.O., J.P. THE HONOURABLE MRS ELSIE TU, C.B.E. THE HONOURABLE PETER WONG HONG-YUEN, O.B.E., J.P. THE HONOURABLE ALBERT CHAN WAI-YIP THE HONOURABLE VINCENT CHENG HOI-CHUEN, O.B.E., J.P. THE HONOURABLE MOSES CHENG MO-CHI THE HONOURABLE MARVIN CHEUNG KIN-TUNG, O.B.E., J.P. THE HONOURABLE CHEUNG MAN-KWONG THE HONOURABLE CHIM PUI-CHUNG REV THE HONOURABLE FUNG CHI-WOOD THE HONOURABLE FREDERICK FUNG KIN-KEE THE HONOURABLE TIMOTHY HA WING-HO, M.B.E., J.P. THE HONOURABLE MICHAEL HO MUN-KA DR THE HONOURABLE HUANG CHEN-YA THE HONOURABLE SIMON IP SIK-ON, O.B.E., J.P. DR THE HONOURABLE LAM KUI-CHUN DR THE HONOURABLE CONRAD LAM KUI-SHING, J.P. THE HONOURABLE LAU CHIN-SHEK THE HONOURABLE EMILY LAU WAI-HING THE HONOURABLE LEE WING-TAT HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 2007 THE HONOURABLE ERIC LI KA-CHEUNG, J.P. THE HONOURABLE FRED LI WAH-MING THE HONOURABLE MAN SAI-CHEONG THE HONOURABLE STEVEN POON KWOK-LIM THE HONOURABLE HENRY TANG YING-YEN, J.P. THE HONOURABLE TIK CHI-YUEN THE HONOURABLE JAMES TO KUN-SUN DR THE HONOURABLE SAMUEL WONG PING-WAI, M.B.E., J.P. DR THE HONOURABLE PHILIP WONG YU-HONG DR THE HONOURABLE YEUNG SUM THE HONOURABLE HOWARD YOUNG, J.P. THE HONOURABLE ZACHARY WONG WAI-YIN DR THE HONOURABLE TANG SIU-TONG, J.P. THE HONOURABLE CHRISTINE LOH KUNG-WAI THE HONOURABLE ROGER LUK KOON-HOO THE HONOURABLE ANNA WU HUNG-YUK THE HONOURABLE JAMES TIEN PEI-CHUN, O.B.E., J.P. THE HONOURABLE ALFRED TSO SHIU-WAI IN ATTENDANCE MR ALISTAIR PETER ASPREY, C.B.E., A.E., J.P. SECRETARY FOR SECURITY MR ANTHONY GORDON EASON, J.P. SECRETARY FOR PLANNING, ENVIRONMENT AND LANDS MR HAIDER HATIM TYEBJEE BARMA, I.S.O., J.P. SECRETARY FOR TRANSPORT MR GORDON SIU KWING-CHUE, J.P. SECRETARY FOR ECONOMIC SERVICES 2008 HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 MR DONALD TSANG YAM-KUEN, O.B.E., J.P. SECRETARY FOR THE TREASURY MR MICHAEL DAVID CARTLAND, J.P. SECRETARY FOR FINANCIAL SERVICES MR LAM WOON-KWONG, J.P. SECRETARY FOR EDUCATION AND MANPOWER THE CLERK TO THE LEGISLATIVE COUNCIL MR CLETUS LAU KWOK-HONG THE DEPUTY CLERK TO THE LEGISLATIVE COUNCIL MR PATRICK CHAN NIM-TAK HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 2009 Papers The following papers were laid on the table pursuant to Standing Order 14(2): Subject Subsidiary Legislation L.N. No. Companies (Forms) (Amendment) Regulation 1994 .............................. 59/94 Fixed Penalty (Criminal Proceedings) (Amendment) Regulation 1994 .............................................................................. 60/94 Road Traffic (Parking) (Amendment) Regulation 1994.......................... 61/94 Road Traffic (Public Service Vehicles) (Amendment) (No. 2) Regulation 1994 .............................................................................. 62/94 Road Traffic (Traffic Control) (Amendment) Regulation 1994 .............. 63/94 Business Registration (Amendment) Regulation 1994 ........................... 64/94 Dangerous Goods (General) (Amendment) Regulation 1994 ................. 65/94 Dangerous Goods (Government Explosives Depots) (Amendment) Regulation 1994 ....................................................... 66/94 Mines (Safety) (Amendment) Regulation 1994 ...................................... 67/94 Mining (General) (Amendment) Regulation 1994.................................. 68/94 Designation of Libraries (Urban Council Area) Order 1994................... 69/94 Hong Kong Academy of Medicine (Addition of Schedule) Order 1994 ...................................................................................... 70/94 Public Health and Municipal Services (Public Pleasure Grounds) (Amendment of Fourth Schedule) Order 1994 ................................ 71/94 Public Health and Municipal Services (Stadia) (Amendment of Twelfth Schedule) Order 1994 .............................. 72/94 2010 HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 Public Order Curfew (Variation) Order 1994.......................................... 73/94 Adoption (Amendment) Rules 1994 ....................................................... 74/94 Hawker (Urban Council) (Amendment) Bylaw 1994 ............................. 75/94 Pleasure Grounds (Urban Council) (Amendment) Bylaw 1994.............. 76/94 Travel Industry Compensation Fund (Amount of Ex Gratia Payments and Financial Penalty) Rules (L.N. 471 of 1993) (Commencement) Notice 1994......................... 77/94 Travel Industry Compensation Fund (Procedure for Ex Gratia Payments) Rules (L.N. 472 of 1993) (Commencement) Notice 1994........................................................ 78/94 Sessional Paper 1993-94 No. 51 — Report of changes to the approved Estimates of Expenditure approved during the second quarter of 1993-94 Public Finance Ordinance : Section 8 Miscellaneous Technical Memorandum for Issuing Air Pollution Abatement Notices to Control Air Pollution from Stationary Polluting Processes Oral answers to questions Mortgage administrative fees 1. MR PANG CHUN-HOI asked (in Cantonese): Will the Government inform this Council: (a) whether the Government will adopt measures to regulate the practice of some banks to charge mortgage applicants administrative fees which are non- refundable under any circumstances for the sake of suppressing property speculation; if not, what the reasons are; and (b) how the Government monitors banks in regard to the charging of various administrative fees, and whether guidelines and criteria will be issued? HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 2011 SECRETARY FOR FINANCIAL SERVICES: Mr President, (a) The Hong Kong Monetary Authority has conducted a survey which covers most of the main players in the mortgage market and this shows that application fees for mortgage loans typically vary between $1,000 and $2,500 for each application from individuals. Such fees are non-refundable and are mainly intended to cover the banks' handling charges. We do not think however that such charges would by themselves have a significant effect in discouraging property speculation. The Government believes that the levy of such charges is a commercial matter for the banks and does not consider there to be a problem that merits intervention. It should be noted that not all banks charge application fees. Mortgage applicants therefore do have a choice in the matter. (b) As regards part (b) of the question, it is not the Government's practice to monitor banks with regard to the charging of administrative fees. This is, as I have mentioned before, normally regarded as a commercial decision by individual banks. There is, therefore, no plan to issue any guidelines in this respect. MR PANG CHUN-HOI (in Cantonese): Mr President, in the past, banks usually charged only $1,000 to $1,500 for handling each mortgage application and this was charged only after the application had been approved. But now application fees, some as high as $2,500, are charged and they are non-refundable under whatever circumstances. The Government believes that the levy of such charges is a commercial matter for the banks and does not consider it a problem that merits intervention. If in future the banks consider that they have to further increase application fees and the increase is to such an extent that the consumers can hardly afford or that they are unjustifiably high, will the Government not take any action in such circumstances? SECRETARY FOR FINANCIAL SERVICES: Mr President, that does seem to be a somewhat hypothetical question but, as I have indicated, the matter of charging administrative fees does seem to us to be a commercial matter for banks. There is a cost to the bank in processing an application. That cost would have to be absorbed one way or another. The banks could either absorb it into their general costs and pass it on to the generality of their customers, or they could pass it back, as most of them do at present, to the individual customer who commissioned the service, or they could combine it with another charge, such as the interest for the actual loan, so that it would be subsumed in that way. But whatever the situation, there is a cost to the banks and it does seem to be a matter of commercial judgment as to how they reflect this and how they recover it. 2012 HONG KONG LEGISLATIVE COUNCIL — 26 January 1994 DR DAVID LI: Mr President, has the Administration undertaken any comparative study of the administrative fees charged by banks for processing mortgage applications in Hong Kong to protect banks from substantial losses due to the practice of shopping around for a mortgage, and those charged by other countries in the region, where, I understand, the administrative costs to a mortgage applicant are generally higher than that in Hong Kong? SECRETARY FOR FINANCIAL SERVICES: Yes, Mr President, as I mentioned in my main answer, the Monetary Authority has looked at the situation in Hong Kong and two points emerged.