Stephen Donnelly (Wicklow, Independent) | Oireachtas source

This is a completely different issue which I alluded to when we were discussing previous amendments. Basically, I want to try to put a little responsibility back on the lenders to act in a responsible way. The Minister, his officials and several of us have gone to a great deal of effort to try to get some insolvency arrangements, a mortgage arrears resolution process, MARP, and a code of conduct in place with all types of statutory and voluntary guidelines and laws. However, the arrangements give vast scope to the lender. For example, a lender is allowed designate a borrower as non-co-operating for a variety of reasons. For example, if the borrower does not reply to a request from the lender within a given time that the bank deems reasonable, then the bank can deem the borrower to be non-co-operating and it can do so for a variety of other ridiculous reasons as well. If the borrower wants to appeal the decision of the bank, the only entity he can appeal to is the bank. There is no independent appeal or no serious oversight.

We have heard a great deal of talk about strategic defaulters and those who cannot pay versus those who will not pay as well as a complete misuse of the phrase "moral hazard", a term which many who use do not seem to understand, but remarkably little about the conduct of the banks. The banks can apply vetoes, designate people as non-co-operating and all sorts of other things. I am trying to do something simple with this amendment. I am trying to add some elements to the Bill which provide that when the judge is considering a possession order he can consider whether the bank has adhered to such things as the code of conduct.

As the Minister stated earlier, if a personal insolvency practitioner make the case that he and the client have put a proposal together and he believes it is a reasonable proposal and it is a standard proposal that is accepted by other banks, but the bank in question, for whatever reason, is unwilling to accept it, it is explicit in the legislation that the judge can take that into account. That is the thinking behind amendment No. 5.