Mr. David Hall:

I thank the Leas-Chathaoirleach and committee members for the invitation to address the committee on the topic of non-bank lenders and vulture funds. I am delighted to be here with Mr. Kissane and Mr. Burgess, both of whom continue to advocate excellently for consumers.

This is a topic close to my heart for all the wrong reasons. The IMHO has assisted approximately 20,000 borrowers in arrears, with a total debt of approximately €4.5 billion, in the past eight years. Many of us here today warned about the predatory nature of non-bank lenders and the behaviour of vulture funds. Some people seemed deluded that they were like charitable organisations. Indeed, some of the vulture funds set up a charity, but for different purposes. Some commentators and politicians were briefed by the Department of Finance and the Central Bank that vultures were good for the economy, were nice people and would look after consumers. We were told that consumer protections would follow the customer when a loan was sold to a vulture. We now know that is not true.

The Central Bank has a key role in protecting consumers but it has failed miserably. Yes, good work was done on the tracker scandal but, despite thousands of families having been affected, money taken and homes lost, no one was charged or lost their job, while many people lost their homes and experienced a negative impact on their lives. The Central Bank is horrifically conflicted in protecting banks and vultures while supposedly protecting customers. Financial customers transact billions of euro and have borrowed billions of euro but their regulatory saviour also regulates the lenders from whom the customers have borrowed. Why in God’s name would anything change? Irish financial mortgage customers have fewer rights and representation than badgers and many other animals do.

Many mortgage customers are now mortgage prisoners. Their mortgages having been sold involuntarily to vulture funds, they are now unable to get a fair mortgage or interest rates and have no control, option to move or option of a fixed-rate mortgage. Financial customers should be a powerful lobby. Their protection should not depend on a handful of advocates such as Mr. Burgess, Mr. Kissane and me, along with some politicians and journalists who try to hold banks and other financial institutions and vulture funds to account.

Vultures have continued to torture those in mortgage arrears, many of whom have been trying to engage. I say trying to engage with vultures because one experiences great difficulty trying to deal with vultures when people are in mortgage arrears. Vultures and non-bank lenders are despicable and disorganised and blame the Central Bank for bureaucracy. We were lied to when we were told that consumer protection would follow through from the mainstream banks when they sold mortgages to vulture funds. That is not the case. A massive disservice has been done to many people and a false narrative has developed. The truth can now be seen. A vulture is a different animal in many ways. I am sure every member of the committee, and every other Oireachtas Member, has tried to engage with vultures and non-bank lenders of behalf of constituents. My IMHO colleagues and I do so daily. We can only hope to get a reply, let alone a coherent process and deal on behalf of customers. Many deals have been done but there is a massive void in the competency of engaging with advocates, representatives, financial advisers and politicians. What hope does the consumer in arrears have when trying to deal with such organisations?

There are just over 21,000 customers in long-term mortgage arrears whose mortgages are now owned by vultures. The banks and vulture funds have told their regulator, the Central Bank, that up to 16,000 homes will be repossessed by voluntary surrender, silent repossession or court order repossessions. Unless these customers are going to be given a free house, there will be great difficulty ahead.

Vultures use a commercial third-party company approved by the Department of Housing, Local Government and Heritage to maximise return in circumstances where people are in mortgage arrears, eligible for the mortgage-to-rent programme and eligible for social housing. There are now 490 households in limbo as the Department scrambles to create a new expression of interest and potentially invite new vultures into the process to buy these family homes.

People in mortgage arrears who are the customers of vultures are now mortgage prisoners. They are not protected in the same way they would have been with a bank. Mr. Kissane and Mr. Burgess will touch on other issues relating to this. Those whose mortgages have been restructured have experienced interest rate increases, pushing them further to the edge. Those seeking mortgage arrears solutions are in difficulty as the rates push up any agreed repayments. Vultures do not all provide the same solutions that the bank used to offer. It is true that some vultures have begun to think creatively. A sceptic might say this is because they realised that many customers will not be able to afford to pay more than 6% in interest.

Consumer protection should be taken out of the Central Bank. The Oireachtas needs to legislate to protect customers. Those in mortgage arrears were stigmatised as sinners who had borrowed too much and, having lost their jobs, were not in a position to pay. They are now scared of being in debt again.

This is not just about people in mortgage arrears, as Mr. Kissane stated, or the customers of non-bank lenders and vulture funds generally. There are low levels of engagement with third parties and the lack of reality in the context of doing deals causes great harm. The Irish Mortgage Holders Organisation is now hearing from a significant number of people who are working and struggling and pre-empting going into arrears. This is now referred to as pre-arrears. Many of these are people who used to be with a bank but are now with a vulture fund. They assumed their interest rate would remain the same as it was with the bank with which they originally took out the mortgage. Their mortgage having been sold, they are now being fleeced by vultures. They did not deserve this and are now under pressure. They deserve to have the rate applied by the bank from which they originally took the mortgage applied to their mortgage. These people are commonly referred to as the squeezed middle. They are used to paying for everything. They are no longer being squeezed, however. Rather, they are now being crushed.

Given that the State was able to put €64 billion into banks, 298 pages of legislation in 48 hours to protect consumers should not be difficult if the willingness is there. The Central Bank has prioritised the economy, banks and vultures and is not fit for purpose to protect consumers. Giving it any further powers is an utter waste of time.