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Dáil Éireann debate -
Wednesday, 2 Oct 2013

Vol. 815 No. 2

Mortgage Restructuring Arrangement Bill 2013: Second Stage (Resumed) [Private Members]

Question again proposed: "That the Bill be now read a Second Time."

Ar dtús báire, cuirim fáilte roimh an mBille cuimsitheach atá curtha i láthair an Tí seo ag an Teachta Collins. Níl dabht ar bith gur de bharr chuid mhór oibre é seo agus gur cuireadh cuid mhór taighde isteach leis an mBille seo a chur chun tosaigh. Cuirim fáilte mhór freisin go bhfuil díospóireacht arís againn ar cheist na morgáistí agus na riaráistí atá sa Stát inniu agus ar na fadhbanna agus an cruachás atá ag go leor teaghlaigh ag an phointe seo mar gheall nach bhfuil an Rialtas ag teacht chun tosaigh le polasaithe cuimsitheacha a rachfaidh i ngleic leis an fhadhb seo. Feiceann muid sna figiúirí arís agus arís eile go bhfuil iad sin atá i gcruachás ó thaobh a gcuid morgáistí a íoc ag méadú ó gack aon cheathrú nuair atá na figiúirí ag teacht as Banc Ceannais na hÉireann. Feiceann muid fosta inniu gur chuir an banc sin figiúirí agus staitisticí eile i láthair a léirigh go cuimsitheach dúinn uilig an fhadhb atá ann le riaráistí agus go bhfuil siad sin atá i riaráistí morgáiste le 90 lá agus níos mó ag dul i méid. Ní hamháin gur dhúbail siad, ach gur dhúbail siad arís ó 2009 go dtí an lá againn inniu.

It is appropriate that we are having this debate about the Bill published by Deputy Joan Collins on a day the Central Bank released further statistics showing the extent of the crisis. The crisis has got out of control. There have been efforts by the Government to get it under control but the efforts have been deficient and those deficiencies have been pointed out from day one by this party. I discussed this in the Chamber last week.

Since 2009, the number of people in mortgage distress has quadrupled. It doubled over the first two years of the crisis under the Fianna Fáil-led Government and doubled again under this Government. The value of arrears now stands at €19 billion and new details show that long-term arrears are continuing to grow, while new cases of arrears, much like the economy, are stagnant or decreasing slightly. That is encouraging, and the Government has put a lot of faith in the fact that early arrears are being dealt with, but it is important to dig deeper into the statistics. The Minister of State is familiar with people who have not gone into the 90-day arrears bracket and are not included in the number of those in mortgage distress. People may be offered interest-only options. I met a person recently who is very close to pension age. She has a debt to the bank of €180,000 and, after the minimum expenditure guidelines, has a disposable income of €400. For three years the bank put her on interest-only payments. That person is unable to pay the mortgage and will never be in a position to pay the mortgage because of her age profile. However, she does not fall into the category of those in mortgage distress because of the short-term solutions being used by banks to keep people out of that accounting category. We must be careful when we look at figures and breakdowns to get to the real statistics and the real stories behind those.

The information on new restructuring arrangements for quarter two of this year shows that the banks are still relying on short-term fixes. It is becoming obvious that when pushed to offer permanent solutions, they have turned straight to repossession or voluntary surrender. It is clear they are not co-operating by offering realistic sustainable solutions to families. That became clear when the banks came before the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. The information we extracted from them was that they relied on 16,000 legal repossession or eviction letters to meet the targets set by the Government and the Central Bank.

In response to a parliamentary question last week, the Minister for Finance stated "Letters threatening repossession or legal action could not in my opinion be considered as a sustainable solution under the mortgage arrears targets, and should only ever be considered after every possible avenue for solution has been exhausted." I asked the Governor of the Central Bank if he agreed with this statement, and in his glib way he turned around and said that he always agrees with the Minister for Finance. In the document released in early March, the Governor and the Government allowed for repossessions to be used as a tool to meet targets.

We need to get to the crux of this matter. Tens of thousands of families are in financial distress and other distress in respect of mental health, relationships within families, relationships with children and relationships with spouses. These relationships are under serious pressure as a result of the spiralling debt weighing down on them. They need and want solutions to be offered by the banks. The Minister needs to lift the telephone to the Governor and say that it is not acceptable for the banks to rely on repossession letters to meet the targets. That is not the spirit in which the targets were set. The need for the targets arose because of the pressure put on the Government by us and others in society to tell the banks that they needed to do more. It was never intended that the way in which they would do more was by issuing letters of eviction, repossession or voluntary surrender. It is clear the banks are running rings around the Government. The Government is impotent and will not stand up to the banks. It has continually defended the interests of the banks over those of people in mortgage distress.

It has not done so.

Deputy Buttimer may have his chance to speak.

We have seen the code of conduct for mortgage arrears, which the Government supported, being changed. That allows for the banks to continue to telephone people in mortgage distress without restriction, and also call to their homes. We have seen the Dunne judgment, which despite its flaws was the only protection that stopped banks from moving in and repossessing family homes and evicting families onto the streets, undone by the Government. The targets we talked about were allowed to be corrupted, abused and bypassed. The banks were allowed to tick boxes by issuing letters of repossession.

For clarification, they are not included in the figures.

The Minister of State will have a chance to speak later. The targets set clearly allow for repossessions to take place. When the targets were set, I said that I hoped they would fulfil the Government's intention. However, I was sceptical because it is clear that the banks have behaved in an uncooperative fashion for the past five years.

What is being delivered in Deputy Joan Collins's Bill is positive in respect of protecting the family home. However, I have concerns about how it relies on the framework of the Personal Insolvency Act. The Act is only newborn and it has been a difficult birth. It is still in a fragile state and we know that questions have been asked about it in the Grant Thornton report and because of the lack of personal insolvency practitioners. In County Donegal there is only one personal insolvency practitioner. There is a real need for public personal insolvency practitioners so that no one is denied the service. The veto for the banks is also an issue and that is why we have argued for an independent body to enforce realistic solutions and sustainable restructuring above the heads of the banks so that we can get to the endgame in this process. That is the key. The banks' veto must be challenged and removed as a path to real and sustainable agreement for those with mortgage debt they cannot repay.

The figure of 110% of current market value, referred to in the Bill, is inappropriate in legislation. We need to deal with this on a case-by-case basis and we need to include write-downs of debt on a case-by-case basis. The spirit of the Bill is correct but we would like to tease out some technical elements further. It is important that we allow the proposal from Deputy Joan Collins to move to Committee Stage. It is a constructive proposal and we should tease it out.

It is clear that, from day one, the Minister and the Government have protected the vested interests of the banks. I talked about the code of conduct on mortgage arrears, the reliance on repossession letters and the removal of the Dunne judgment. The Minister also protected senior bankers. In the case of the Anglo Irish Bank tapes, the two people involved were protected in senior positions by this Government.

Not one of the thousands of staff earning above €100,000 in any of the banks took as much as a penny reduction in their basic pay as a result of Mercer. What we need is energy, facts and delivery, and that is not forthcoming.

Debate adjourned.
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