Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Senator's argument is the one put forward by the Minister - and to which the Central Bank referred - that this provision could be a deterrent to new entrants to the market. In recent years, Pepper has started lending some mortgages in the market. I understand Frank mortgages has also applied for permission to lend, although I do not believe the application has been fully processed in the system. As I stated, some credit unions wish to lend in the mortgage market but are precluded from doing so by lending restrictions that apply over longer terms. I do not accept the premise that the option available to the Central Bank under section 5(d) would result in rates increasing. The Central Bank may never need to use these powers. It is my view that having these powers on the Statute Book would deter the type of practice that currently prevails in the market. That is the important point. The Central Bank is a policy taker, rather than policymaker. It should also be listened to and we will listen to it when it has an opportunity to appear before the committee. However, I do not accept the assertion that the option in section 5(d) would result in rates going up.