Michael McGrath (Cork South Central, Fianna Fail)
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May I raise the issue of consistency of treatment, which the Chairman raised with the Governor? There are dramatic inconsistencies between the various banks and their approaches to mortgage arrears with individual customers. The outcome for somebody in arrears seems very much to depend on what bank he or she is with. We are witnessing that in regard to the policy on debt forgiveness, for example. AIB is rolling out split mortgages where part of the debt has been written off. Bank of Ireland has a rigid policy of no debt write-off whatsoever. We are noting different treatments of split mortgages. Bank of Ireland is still charging interest on the warehouse portion, for example. We are witnessing serious inconsistencies, to say the least, in how the institutions are approaching the new insolvency service.

While nobody expects absolute uniformity, there are dramatic inconsistencies. Some options open to certain borrowers with certain institutions are not open to other borrowers with different institutions. That seems to be inherently unfair. The banks seem to be running the show because they are deciding what constitutes a sustainable solution. They are allowed to define it themselves. They can decide what solution is offered, including a threatening legal letter. If the solution is a split mortgage, the bank can determine its terms. Professor Patrick Honohan seems to be satisfied overall with the Central Bank's approach but he is not really getting into the nitty-gritty; he is letting the banks get on with it.