Michael Creed (Cork North West, Fine Gael) | Oireachtas source

I thank Mr. Duffy and his team from AIB. My mood has swung wildly while I have been sitting here. On the one hand, I was very impressed by the presentation, but then, on the other, I keep going back to my constituency experience, with which the presentation jars significantly. There are two main issues, the first of which is the bank's definition of affordability. I appreciate it has taken on board the insolvency guidelines in that regard, but in my mind's eye I can picture individuals I know in my constituency whose cases jar with the bank's presentation. I would like to focus on the issue of affordability and flesh it out further. The second issue concerns the financial solutions group within the bank. I believe it operates on a regional basis and that various teams have been set up. Through the experience of constituents, I am familiar with the teams in Cork and Tralee.

It seems that the process is like a game of poker. The debtor rarely knows what it will take to achieve a solution and keeps having his or her proposals thrown back at him or her. There seems to be no real engagement. I could cite chapter and verse, but for reasons of confidentiality I will not do so, where it seems no real effort is made to come up with a workable solution. Solutions must work for both sides - the bank and the debtor. I am aware of cases in which there are write-downs on the table, but at the same time horrendous levels of debt are being imposed on people with modest incomes who have families to rear and whose reasonable living expenses can only be expected to rise because of the ages of those involved. They will be in hock for the rest of their lives, way beyond retirement age in the context of the proposals on the table. In general, they are middle aged and have significant debts.

I acknowledge the efforts being made and the progress made. However, behind all of the statistics are individuals and families. The presentation made was slick and impressive, but it jars with the real life experiences I come across in my constituency office, the experiences of people who desperately want to move on and deal in an honourable way with their problems. They need the banks to engage and write down some of their debt. I acknowledge that there is a write-down on the table in one case of which I am aware, but people are still being left with a horrendous level of debt. It comes back to affordability. The proposals on the table are, in one case I know of, a consequence of the extended family dipping their hands into their pockets to try to bail out a family member in difficulty.

Will the delegates flesh out the process and the issue of affordability a little more? I thank them for their impressive presentation, but this is a nasty business. This is a legacy issue with which the banks must deal and there is no point in pointing fingers or apportioning blame. Everybody shares a little of the culpability in this matter, borrowers and lenders alike, and we must find workable solutions that will let people get on with their lives. Those with honourable intentions cannot be saddled with unworkable solutions, but the impression I am getting is that they are. Regrettably, I have engaged with a lot of people on this issue. Some of them have come out the other side; some are stuck in the process, while others are afraid to go into it. These are probably the ones to whom the banks are sending legal letters.

This is, as I said, a nasty business, but the proposed solutions are not working for everybody. A greater effort is needed, as well as greater openness, to engage with people, particularly in cases like the one I mentioned in which the extended family is ready to pony up money to try to help. They could easily walk away. The nuclear option in one case of which I am aware is to take the insolvency or bankruptcy route, but because of the consequences for the family involved, this is not something they want to do. They want to try to deal with the issue.

However, it is an option that is coming closer to their horizon because of what they believe is the bank's intransigence and unwillingness to state they are nearly there and another €50,000 might solve the problem. They just do not know what it will take to solve it. There is a little mystique to this like in a poker game, but the debtor holds few of the aces. The bank needs to engage more. Without going into individual cases, will Mr. O'Connor outline how the process operates in the financial solutions group at a regional level and refer to the issue of affordability?