Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

Last night Ulster Bank confirmed that it would close 40 more branches and lay off additional staff. In that bank alone we are looking at the loss of employment of between 1,400 and 1,800 jobs, which is a staggering blow to those employees and their families. In a presentation to investors, the chief risk officer went further and said that the bank is anxious to break even by 2014 and to make a profit again in three years’ time. In that context, he very worryingly said that the bank would target distressed mortgage holders in arrears. In an extraordinary statement he said that it was his view that up to 35% of those in arrears were strategic and that the bank was going after them. He blamed the Dunne judgment in the context of the Land and Conveyancing Law Reform Act.

It is interesting that the Government’s response to the mindset and mood revealed in the presentation to investors yesterday was essentially to capitulate to the bank’s agenda. It is clear that the banks are targeting those in arrears and the Government has facilitated it, first, by simply changing the legislation, bringing it through this House, to make it easier for banks to repossess family homes and, second, by unravelling the existing protections and code of conduct that existed for mortgage holders and those in arrears. The new code of conduct represents a significant rebalancing of powers towards the lender as against the borrower. What we saw yesterday was a revealing insight into the thinking within the bank boardrooms and the bank management across the board. It is their belief that it is legitimate to use legal action to go after people in arrears on the basis that they are all strategic defaulters anyway. It seems to me that what we are witnessing, which explains why the Government has created a situation that coincides with the agenda of the banks, is a dilution of protections that existed for people in mortgage arrears and a change in legislation without any conditionality to protect those in arrears.

Does the Minister share the view of Ulster Bank that up to 35% of mortgage defaulters are strategic? Is that the Government’s view as well? Given the mindset, as revealed by the bank, will the Government reconsider intervening on behalf of those in arrears and put in place independent oversight to arbitrate between the banks and those in arrears to ensure that those in mortgage arrears in this country get a fair hearing and genuinely sustainable resolutions to the predicament in which they find themselves?

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