No recommendations have been tabled.
Finance Bill 2016 [Certified Money Bill]: Report and Final Stages
I thank the Members of the House for their constructive engagement on the Finance Bill. I also thank them for engaging with the officials. I hope the technical briefings were helpful for the discussion on some of the more complex areas of the Bill. The recommendations tabled on Committee Stage were helpful, as they provided an opportunity to debate the particular issues and the Government's views on them. We are finishing work on the Bill, on which we have had constructive engagement in the House. I look forward to continuing this type of engagement on issues relevant to the Department of Finance in the new year.
I thank the Minister of State for coming to the House. We had lengthy debates on Second and Committee Stages and many issues have been ironed out. The general thrust of the legislation is to look at making work pay, which is about reducing USC. The Bill includes a range of other measures. The Minister of State has given a commitment that he will review various aspects of the Bill over time. An issue that has been raised is concerns regulation where vulture funds purchase home loans and small business loans. This issue may be outside the scope of the Finance Bill, but it is relevant.
Last week representatives of the Central Bank appeared before the finance committee and it has concerns about this area. Where a home loan or a small business loan is purchased by a vulture fund which does not operate in Ireland, regulation is under the auspices of an intermediary appointed by the vulture fund. There is concern that policy and interest rates are dictated by the vulture funds. Will the Minister of State examine how this operates in practice? The voluntary code was to apply to the funds. Will the Central Bank have sufficient teeth under the regulations to ensure homeowners will remain in the same position as they would have been if the loan had been held by the original Irish-based institution? We need to keep a very close eye on how this operates in practice. We cannot have a situation where homeowners whose loans are sold to vulture funds are put under enormous pressure. When the Central Bank steps in to regulate the intermediary administering the loan, it finds it does not have sufficient teeth to deal with it. People are being dealt with in different ways, depending on whether they are with the original bank or the vulture fund.
Small business loans may also be sold to vulture funds by banks operating in Ireland. These small businesses suddenly find that they are put to the pin of their collar. When the Central Bank steps in, it finds it does not have sufficient teeth to deal with the issue. I ask that a review be carried out under the legislation introduced recently to govern how loans sold to vulture funds are regulated. If there is a need to do so, the Government should step in in order that the Central Bank has sufficient powers to ensure anyone whose loan is sold to a vulture fund by one of the principal banks will not be put in a worse position.
That is a general observation on the regulation of foreign institutions, colloquially known as vulture funds, buying loans from Irish institutions.
I said all I wanted to say about the Bill in the previous debates. It is short-sighted. It is very obvious thousands of homeowners are in the situation outlined by Senator Kieran O'Donnell with vulture funds. The Central Bank has done absolutely nothing about the packages of non-performing loans being sold off to vulture funds which are completely unregulated and can charge whatever interest they want. There is no urgency about fixing this problem. That is why legislation needs to be introduced immediately. The Central Bank needs to play a much more robust role within its consumer protection remit. The Minister should be doing everything he can to facilitate it in doing so.
This year we have brought about a reformed budget and finance scrutiny process which has been very beneficial. Further work must be done in the sphere, but this gives us an opportunity to review, debate and plan how we protect people's taxes and invest their money in public goods in advance of making decisions. In the course of the debate on the Finance Bill we speak about very technical issues, but, ultimately, we are trying to protect the tax base and revenue streams in order that we can invest them in schools, hospitals, playgrounds and everything else that is so important to the fabric of citizens' lives.
On the point raised by Senator Kieran O'Donnell on loans purchased from the original institution which offered the loan by foreign institutional investors, as he is aware, legislation was introduced to give the same protections to and provide for regulatory scrutiny for borrowers, regardless of who held their loans. It is on a voluntary basis. If the finance committee would like to discuss this issue further, in the context of what may happen next year, the Minister would be willing to do so.
I also know that the Minister progressed further measures this year to protect people, be they in mortgage or business debt, who found themselves in the very difficult position of having the burden of a distressed debt. It is very distressing. More work can always be done and we will continue to look at what we are doing to make sure that we are helping people as best we can. If the Senators wish to discuss the matter further in the finance committee next year, I am sure the Minister will make himself available at the earliest opportunity.
The legislation that was introduced is very welcome, but we must ensure the structure now in place for loans sold on to foreign entities, colloquially known as vulture funds, works. We must ensure the mechanism works. I hope it will, but if it does not work, we must review it to see whether we can make further changes to it to ensure it will work.
As a principle, all legislation should be reviewed at the appropriate time to make sure it is having the intended consequences when it was drafted and brought into force. I do not think there would be a problem in that regard.
I express my support for what the previous two speakers said about mortgages. We, in Fianna Fáil, were slightly disappointed, in particular those of us who come from a Border area, with the provisions to deal with Brexit. I felt more could have been done in that regard, specifically for businesses along the Border. Something must be done to cushion them from the future effects of Brexit on their businesses.
A huge amount of work has been put into dealing with Brexit. It started before people in the United Kingdom took the decision on Brexit in terms of contingency planning, but a number of measures were also introduced in the budget which were debated in the Seanad and the Dáil to protect people and Irish companies who might have exposure as a result of what Brexit might mean when it came about. The Taoiseach has set up a Cabinet sub-committee, of which the Minister for Finance and I are members, as is the Minister for Jobs, Enterprise and Innovation. We are very aware of some of the pressures businesses are facing as a result of the uncertainty Brexit has caused in the immediate term and what may happen following the type of Brexit we will see in the future. It is something at which the Government is constantly looking. Brexit is not something to which one just allocates one day or one person, all members of the Government are constantly assessing what may happen in the context of Brexit, what it might mean and, as a result, what we may need to do as a Government and in the Houses to protect Irish interests.