Dáil Éireann Debate, Tuesday - 27 March 2018
61. Deputy Paul Murphy asked the Minister for Finance the detail of his contacts with senior management of a bank (details supplied) in relation to the proposed sale of part of its loan book to vulture funds; his views on legislation to allow the Government block the sale of this loan book; and if he will make a statement on the matter. [14114/18]
Amharc ar fhreagraPermanent TSB came before the finance committee last week. The 75% State-owned bank indicated it intends to proceed with so-called Project Glas, which would have the consequence of about 18,000 families, including homeowners and renters, being thrown to the vultures whose only concern is short-term profit. Will the Minister use the formal consultation process to make it clear that the Government and Dáil are absolutely opposed to any sale to vulture funds?
As part of their regular engagement with the banks in which the State has a shareholding, officials in my Department discuss a wide range of topics, including loan sales. I am answering the question the Deputy put to me in written format. What he has just said orally is different. For example, in the case of Project Glas, the project recently announced by Permanent TSB to sell a portfolio of non-performing loans, officials were first briefed by the bank on the timing of the sale and potential composition of the portfolio in the week commencing 15 January. Officials, in turn, briefed me on the matter on 19 January as I have previously indicated.
As this information was commercially sensitive and as I am obliged to comply with Stock Exchange disclosure and market abuse rules, I was not in a position to discuss it publicly at the time. In addition to the regular engagement Department officials have with the banks, I recently met senior officials of the majority of our Irish retail domestic banks and intend to do so again, as well as holding similar meetings with the other banks. At these meetings, loan sales were discussed, where relevant. The Deputy will be aware in this regard that it is not appropriate for me to put any more facts into the public domain over and above what the banks themselves have disclosed as I must respect the Stock Exchange disclosure rules.
It is worth noting that in the case of Permanent TSB, no loan has been sold yet and it will not be known how many loans will be sold nor the composition of these loans for a number of months. In addition, it is not known at this stage to whom they will be sold. For clarity, I want to highlight to the Deputy that I cannot stop these sales, even by the banks in which the State has a shareholding.
They are the responsibility of the boards and management of the banks, which must be run on an independent and commercial basis. The banks' independence is protected by relationship frameworks, which are legally-binding documents that I cannot change unilaterally.
Project Glas is a green light to destroy the lives of homeowners whose loans are included in this particular loan book sale. At a meeting of the Joint Committee on Finance, Public Expenditure and Reform, and the Taoiseach, last week, I and other Deputies asked representatives of Permanent TSB what would be their response if, in the process of formal consultation, the Government was to make clear its opposition to the sale of these loans to vulture funds. Their response was that they would consider every option. The use of the formal consultation process is, I believe, inadequate. I think we should be making greater use of the State's shareholding in the banks. I am seeking a commitment from the Minister that he will not treat these homeowners in the same manner as they are being treated by Permanent TSB and that he will use the formal consultation process to express the strong opposition of the Government and the Dáil to any sale to vulture funds.
As I have already indicated, I am not in a position to use the requirement for the banks to consult with me in order to block a sale of this type. As I have already stressed, I am aware of the concerns of mortgage holders in respect of these potential sales and I have committed to a number of actions. I have committed to working with Deputy Michael McGrath on his Bill to regulate funds and expand the regulatory reach and I have used the powers open to me to ask the Central Bank to conduct a review of the code of conduct on mortgage arrears. It is important that the Irish banking system gets to a place where its level of non-performing loans is reduced. This must be done, however, in a way that takes account of the difficulties that mortgage holders can face as that happens, as was the case in the past. We have seen a significant reduction in the level of mortgage arrears and the number of non-performing loans while, simultaneously, we have avoided the worst forecasts expressed at various points in the past. I am committed to trying to maintain this framework into the future.
These mortgage holders have been subjected to a campaign to demean them as people who are not worthy of having mortgages or owning homes. A key part of this campaign was the Permanent TSB statement that some people have not engaged for more than seven years. When I asked the bank's representatives at the joint committee's meeting last week to indicate how many people have not engaged for over seven years, they were unable to provide that information.
I ask the Minister not to answer a question that I have not asked. Although I do believe the Minister should have legislative power to block this sale or use the State's ownership of the banks to block it, that is not the question. The memorandum of understanding between the State and the bank includes a requirement for a process of formal consultation. I am asking the Minister if he will use that process to state his and the Government's strong opposition to this sale proceeding.
I find it ironic that the Deputy is asking me to not answer questions that he has not put to me given the question he put to me is different from the one he shared with me in written format and which I answered. I have already indicated that I am not in a position to direct the bank not to go ahead with loan book sales.
That is not what I asked.
I want to put it on the record that I am not party to and do not support any attempts to demean people who have been making efforts to pay their mortgages. It is difficult and stressful for anybody, regardless of his or her circumstances, who experiences problems in the context of his or her mortgage. It is in response to this that we put in place Abhaile, the code of conduct on mortgage arrears and the personal insolvency legislation.
I ask the Minister to respond to my question, which I have already asked three times.
The Minister, without interruption.
I have asked the Minister three times if he will use the formal consultation process to block this sale.
We are moving to the next question.
The Minister is supposed to answer questions.
I am working to the rules.
The Minister is not working to the rules.
The time allocation for each question is six and a half minutes. If some members continue to eat into the time, other members' will miss out.
I did not eat into anybody's time.
