Dáil Éireann Debate, Thursday - 8 March 2018
43. Deputy Robert Troy asked the Minister for Finance the steps he or the Oireachtas Committee on Finance, Public Expenditure and Reform, and Taoiseach have taken to confirm that family homes would not be included in the proposed mortgage portfolio sale by a bank (details supplied); if the committee has powers to request an explanation or confirmation from the bank regarding the matter; and if he will make a statement on the matter. [11115/18]
Amharc ar fhreagraThe Deputy will be aware that PTSB announced on 13th February that it was commencing the process for the sale of a portfolio of NPLs referred to as Project Glas. On the 20th February, the bank gave details of the portfolio of loans which is under consideration. The bank confirmed in these details that 18,000 properties are linked to loans which are within the scope of Project Glas, 14,000 of which are private dwelling homes (PDHs).
In relation to PDHs, the bank highlighted just under €2 billion is accounted for by loans which are typically owned by customers who have not engaged with the Bank, whose mortgages are unsustainable or who have been unable to meet the terms of various treatments put in place. Of this portion of Project Glas, some account holders have not engaged with the Bank for over 7 years and on average the loans are over 3.5 years in arrears. Many of these account holders have made no payments at all for years.
In addition, the bank confirmed that Project Glas also includes some loans which are currently subject to agreed forbearance measures, but which remain categorised as NPLs and this, therefore needs to be addressed.
For clarity, I should highlight for the deputy that I cannot stop loan sales by the banks, nor can I interfere with the composition of such sales. This applies even for the banks in which the State has a shareholding. These decisions are the responsibility of the Board and management of the banks which must be run on an independent and commercial basis. Their independence is also protected by Relationship Frameworks, which are legally binding documents that I cannot change unilaterally. These frameworks were insisted upon by the European Commission to protect competition in the Irish market. Loan sales do not require my consent, though the banks are required to formally consult with me if the disposals are of a sufficient scale. In the case of the PTSB loan sale, the bank has not yet consulted with me but will do so in due course.
It is worth noting that no loan has been sold yet and it won’t be known how many loans will be sold for a number of months, nor the composition of these loans. In addition, it is not known to whom the loans will be sold. However, I want and expect PTSB to be transparent with their customers when it comes to this sale process as it evolves.
It is important to highlight that there are no changes to the rights or obligations of a customer whose loan is sold by a bank. All terms and conditions attached to their mortgage contract remain in place. In addition, as credit servicing firms servicing loans on behalf of unregulated entities are required to comply with the Code of Conduct on Mortgage Arrears (CCMA), all protections under the CCMA are unchanged. The customer is in the exact same position as they were before their loan was sold. In relation specifically to restructured loans, including splits, any purchaser will be obliged to honour the terms of the restructure agreement, should such loans be included in the final sale.
Notwithstanding the protections currently in place, I have made it clear that I am prepared to engage with Deputies from other parties in an effort to see if we can strengthen and enhance the protections, in a sensible manner, that are already in place for mortgage holders.
In relation to its powers, the Committee on Finance, Public Expenditure and Reform, and Taoiseach is entitled to request an explanation or confirmation from any of the banks on any matter and I would expect such a request to be dealt with to the satisfaction of the Committee. The Deputy may be aware that the Committee invited PTSB to attend a meeting on 27th February to discuss Project Glas. In its response to the Committee, the bank highlighted that it was not appropriate for executives to attend a meeting on the date proposed, as the bank is currently in a closed period ahead of the publication of its annual results on 14th March. However, the bank did state it was agreeable to meeting with the Committee on an alternative date sometime after 14th March. I understand that PTSB is awaiting a response from the Committee with a proposed alternative date.
