Oireachtas Joint and Select Committees

Wednesday, 3 December 2014

Joint Oireachtas Committee on Finance, Public Expenditure and Reform

Business of Joint Committee
General Scheme of Sale of Loan Books to Unregulated Third Parties Bill 2014: Discussion

4:20 pm

Photo of Sean BarrettSean Barrett (Independent) | Oireachtas source

The documents from the Department state the proposed legislation will achieve borrowers maintaining the same regulatory protections that they had prior to the sale of their loans. That is very strong language for public servants to use.
I believe we should enforce the contracts lock, stock and barrel, as Mr. Paul Joyce said. So what if a bank sold a tracker mortgage to, say, someone who bought a petrol station which was bypassed by a motorway. Caveat emptorshould apply to the purchasers of these loans. They should not be allowed entertain any hope that they can change the contracts. When we discussed this with the then Minister for Justice and Equality, Deputy Shatter, in the Seanad, he was keen those borrowers with such loans should be protected in these situations. Firms must exercise due diligence and have a better idea of risk than those who drew up the original agreements.

That is what they bought. The contract is the contract. The property rights of the other parties remain absolute. The property rights of the other parties remain absolute. The terms of the agreement stand. In the end, there is a change on the name of the cheque or the name of the direct debit. I do not want to form any relationship with whoever now runs the mortgage. I am fulfilling my part of the deal. It is about time some aspects of financial services in Ireland grew up and accepted that, rather than attempting to renegotiate deals with individuals after they have bought packages from one of the failed banks. I think that is what the Department is trying to do. I hope the negotiations in that regard go well.

I believe the property rights of people must be protected in the legislation. I refer not only to the people we are discussing, but also to others, including the tenants if a buy-to-let landlord is bankrupt. The former Minister, Deputy Shatter, was particularly interested in the protection of tenants in such circumstances. Similarly, if the bank has gone bankrupt - not the person who holds the mortgage - it should be made quite clear to the purchasers that this is what counts. Reference has been made to the institutions we own. I think that is irrelevant. If it were relevant, the Minister, Deputy Noonan, would come under all sorts of pressure because we own shares in banks. The public interest has been expressed. I remember the example was used of pressure being put on the post office to reduce interest rates on savings and thereby help the institutions we own. They have done all the damage. I do not think we have any further obligations after the €64 billion to do anything else for them. That should be made clear to anybody who wants to buy loan books from Irish banks.

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