Mr. Brendan Burgess:

Mr. Kissane and Mr. Hall have covered most of the issues, so I will highlight a few points. The first is that this is not just about people in arrears. When the Central Bank appeared before the committee, it set out that it makes sure lenders adhere to the code of conduct on mortgage arrears, CCMA, and provide a range of restructuring arrangements. Some 21% of these customers are in arrears, with approximately 80% not in arrears. It is not good enough to gouge customers, regardless of whether they are in arrears. They should not be gouged. I ask the committee to pay particular attention to that.

The vulture funds will argue - the Central Bank has argued it very well on their behalf - that they have just passed on the ECB rate increases. They will argue that the Governor of the Central Bank asked them to ensure they transmit ECB monetary policy into the economy and that is what they are doing. One needs to understand the situation in respect of Irish mortgage rates through the past ten years. We have had the highest new business mortgage rates for most of the past ten years. In that period, although we had the highest new business rates, those rates were fixed rates, generally speaking. That is where the banks competed. I remember Richie Boucher, then CEO of Bank of Ireland, appearing before the committee. When Deputy Doherty challenged him on the number of people paying 4.5%, he said they did not need to pay 4.5% as they had the option to switch to a rate of 3% that the bank offered. Many customers ended up paying 4.5% variable interest rates, however, because they were not informed enough or too busy or whatever. They stayed on 4.5%. The loans of some of those customers have now been sold to vulture funds and the 3% is being added to that artificially high rate of 4% or 4.5%. Those customers are now in a very difficult position. I stated that this is not about people in arrears, but many of them will end up in arrears shortly.

I will go back to what was said at the time these mortgages were sold to vulture funds. We got reassurance from the then Minister for Finance, Deputy Donohoe, as well as the Department of Finance and the Central Bank. They asked what the problem was in the context of assurances that the contract would continue and customers would keep the same terms and conditions. The implication was that borrowers would not suffer as a result.

This is not what has happened. Borrowers have suffered and they are paying a much higher mortgage rate.

What is the solution? It is not enough for us to come in here to complain about this and to give out and say: "Aren't they dreadful?" We do need to see something happening. The first principle of the consumer protection code of the Central Bank is that customers must be treated fairly. If Mr. Kissane and I took out a mortgage with the Permanent TSB at the same time, for the same amount of money and the same loan-to-value ratio, etc., and for whatever reason PTSB chose to sell my mortgage to a vulture fund and I am paying 3% more, that is just not fair. The principle of fairness is terribly important here.

The Central Bank could impose a solution if it was minded to do so, and if it is not, then the Oireachtas could probably impose it, although that would take a little bit longer. The solution is that when any mortgage is sold by a bank to a vulture fund, the vulture fund must offer the rates being offered by the original bank. It is that simple. If in the scenario I outlined where Mr. Kissane and I took out a mortgage with the PTSB and my mortgage was sold to a vulture fund, I would be offered the same rate he is offered. I have done nothing differently. I have not agreed to the sale of my loan, so from that point of view, that is a solution I would like to see. The committee's help in imposing that would be very welcome.