Dáil Éireann Debate, Tuesday - 21 September 2021
1. Deputy Pearse Doherty asked the Minister for Finance the correspondence or contact he has had with retail banks and the Central Bank regarding the use of allowances under the mortgage lending rules for mortgage applicants who are required a minimum deposit of 20% but have properties affected by mica and pyrite. [44865/21]
View answerIn June, thousands of homeowners and families affected by the mica and pyrite scandal travelled to Government Buildings in order to send a clear message, which was that they would not be forgotten. While I will ask the Minister about his involvement and responsibility in ensuring these families get 100% redress, I want to focus on families looking to move house because their houses are crumbling before them. However, since they already own a house that is mica-affected, they are required to have the 20% deposit. There is no equity in their houses. Has the Minister engaged with financial institutions, some of which he is a major shareholder in, to deal with this issue and ensure that they use the scope they have to make sure mica-affected families are properly addressed?
The Deputy already knows what the macroprudential rules are and how they are operated so I will directly answer the question he has put to me. With regard to my engagement with the Central Bank, the operation of the macroprudential rules is an independent function of the Central Bank and it is not appropriate for me to contact it on how it operates that policy. It is set and implemented by the Central Bank, through our banks. With regard to our retail banks, I want to underscore that this is a commercial decision made by those banks. They decide to whom and how they lend and what the terms of that loan are. I cannot influence or enforce what that will be; it is a matter for them to make.
That being said, I am aware of the huge importance of this issue in the many communities that have been affected by mica and I will, across the period in which the work of Government is being finalised on this, raise the issue with the banks.
I would appreciate it if the Minister would do so. While we do not expect the Minister for Finance, even where he is the majority shareholder in a bank, to tell it how to lend its money. I am sure there has been communication between the Department, if not the Minister, and some of these financial institutions on the motion passed by the House which called for 100% redress and that financial institutions would play their part in that. Will the Minister elaborate on whether that wider issue of a contribution from the banking sector, which will see its assets restored? If you have a €200,000 mortgage on a house in Malin Head, which is full of pyrite, it is not worth €200,000; it is not worth anything. Under the redress scheme, I hope, with 100%, it will go back to the original value. We have engaged with banks in the past about people buying remediated houses that were done under the mica scheme, but this is a separate issue in terms of making sure the leeway is used, especially for mica-affected families.
It is a separate issue and I am aware of its huge importance and the chronic stress and anxiety it has caused. While the Deputy recognised that I cannot influence a lending decision made by our banks, I will raise this issue in the coming weeks, in the context of the Government response to mica that will be put forward.
I appreciate the Minister will raise that specific issue which has affected many families who want to buy a second property. I have asked the Minister about the wider issue and given voice to the motion he supported in the House which called for 100% redress and that the financial institutions would play their part. Can he outline to the Dáil whether he or his Department have had contact with any of the banks with regard to their contributing to a scheme that will be announced later on this year?
To date, I have not had engagement with the banks on a contribution they may, or may not, make to a scheme such as this in the future. Obviously, there is an intensely important need that we have to strive to better meet on behalf of the communities for whom the Deputy is raising this issue and the families who do not have a home. The issue we will need to consider is how this will be paid. This is a matter the Government will have to consider because this is as big and difficult as the mica and pyrite issues. Other homeowners are concerned about issues with their properties. The issue of how this will be paid for is a matter on which I will engage in the coming weeks, with the Minister for Public Expenditure and Reform, Deputy McGrath, and the Minister for Housing, Local Government and Heritage, Deputy O'Brien. To answer the Deputy's direct question, to date, I have not had a discussion with the banking sector on that. I look forward to working with my colleagues in government to finalise a plan on this.
