Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Second Stage debate in the Dáil was very useful and the inputs were coming form Deputies who were very well informed about the personal problems individual mortgage holders had and the general issue. The Deputy is right that there was a desire not to have a Government defeat so early in the life of the Government. There was also an agreement on the principle of the Bill. Everybody thought certain lenders were applying mortgage interest rates that were too high and there was a common purpose in seeing if we could get the rates reduced. That was the purpose of the Bill, and on Second Stage one is voting on the principle, not on the detail. The principle was close enough, as described by Deputy Michael McGrath, to the Government's view.

I would have thought the application of competition would have achieved the same end without legislation. To a large extent, in terms of new mortgages, it has, particularly in AIB where the State is a 99% shareholder. The AIB rate is quite good. The Deputy is right that the outlier is Bank of Ireland, especially regarding mortgages that are already written and the differential between the treatment of new mortgage applicants and historic mortgages. There is a gap there.

I have no advice that the Bill is unconstitutional. The test is whether the response in the Bill is proportionate to the public interest advantage that is gained by enacting it. This is the criteria on which a senior counsel would examine it and it is in this space that one would get legal advice. All I am saying is that there is an issue and that legal advice is needed. We will work our way through it and see if we can come up with a solution. I do not disagree with the analysis. Some lenders are charging too much. There are other issues. We do not want to distort the market. If our legislation results in a reduction in the profitability of mortgage books, we would like to avoid a situation in which a bank would move to recover profits elsewhere in the market by charging more for SME lending where we need economic activity to create jobs.

There are a number of issues. The Deputy has done the House service, especially under the new rules. We will work our way through it, not with the intention of obstructing the Deputy in any way but of assisting in the discussion.