John Browne (Wexford, Fianna Fail)

I thank Deputy Michael McGrath and Deputy Seán Fleming for bringing this Bill before the House. It gives us an opportunity to debate the serious situation for families who are severely indebted. It is also an opportunity for the Government to accept this Bill, which it has done, and to implement it as quickly as possible. If the Government feels changes must be made to the Bill, so be it, but it is important, as Deputy Calleary said, that it is enacted between now and the summer so people have the chance to sort out their difficulties.

The area of debt management, advice and household budgeting services is largely unregulated at present and is a growing cause of concern. Many distressed borrowers have signed up to what are seemingly attractive offerings but then found themselves in further financial trouble and in a less secure situation. This cannot be allowed to continue. We are not seeking to outlaw the debts advice industry, or to make it impossible for it to operate, but there are growing levels of concern about these companies, particularly the fees they charge and the lack of transparency. It is important the Minister of State looks at the exorbitant fees being charged and that the whole situation is made more transparent. Some financial institutions have gone as far as refusing to deal with debt management companies. Some mortgage brokers have, in fact, gone into debt management, a matter of concern to me. The mortgage brokers operated during the boom and secured loans for people who could never meet the repayments.

The banks are not very helpful to those customers who have found themselves in financial difficulties. People are being bullied, getting phone calls in the morning and late at night. In many cases, the banks gave out loans to people without any investigation of the family's ability to pay them back. As a Deputy who has represented Wexford for many years, many people come into my clinics in serious financial difficulties. Often, when their difficulties have been teased out, the problem is that they should never have received the loan in the first place; they were never in a position to meet the repayments but got a 100% loan on a low income and were never going to be able to meet that repayment. Now the banks are looking for their pound of flesh, and bullying people into making repayments they cannot make, driving them further and further into serious financial difficulties.

The banks should provide advice centres for their customers. At present, if I ring the bank in Wexford, I am told an issue is being dealt with in Dublin. No one knows better than the local bank manager of the circumstances of a family in the area. When I try to ring the bank in Dublin to arrange a meeting, I get short shrift and rarely do I get the meeting. In some areas in Wexford, some bank managers are very helpful and supportive but when it is necessary to go to Dublin to resolve a problem, it becomes impossible. The banks must provide an advice centre in every county where local families can discuss their loans and see how the situation can be resolved.

Deputy Cowen mentioned MABS, which has been a great organisation in good and bad times. The difficulty is the lack of staff in the MABS offices. There is a very good MABS office in Wexford headed by Mr. Nicky Rossiter but he and his staff can only do so much. The demand for the services of MABS, however, is way above what it was previously. The service does its best to resolve difficulties. I tell people to discuss their problems with the staff of the MABS advice centre in Wexford, who are doing a great job in providing a service. The Minister of State is tonight representing the Minister for Finance, the Minister for Public Expenditure and Reform and the Minister for Social Protection. These are the Ministers who will provide the staff and resources and the Minister of State must bring the message back to them that we need extra services and support in the MABS offices to ensure ordinary people, not those who are well off but those on social welfare benefits or on low incomes, who find it impossible to meet repayments, receive the necessary advice and assistance.

About 40% of those who owe money or who are in serious debt have not gone to anyone at present. It is important that we have a public awareness campaign to tell people in financial difficulties to go to the local MABS office and their bank manager to discuss their difficulties because the problem will not go away. It is important people are advised to go as quickly as possible.

In some circumstances people might not be able to get out of their problems because of the fall off in the value of houses. I have come across cases where people who owed the bank €200,000 handed back their house to the bank, the bank sold the house for €150,000 and then continued to seek the balance from the customer. It is important that people, before they hand back the keys, try to do a deal with the lender to write off the balance. In many circumstances the person should never have received the loan in the first place and the banks are not blameless.

The Regulation of Debt Management Advisors Bill is a move in the right direction. They must be regulated and brought within a legislative process. They cannot be allowed to charge exorbitant fees or prey on the vulnerability of families that owe huge amounts. That is what is happening, they are preying on the vulnerability of ordinary people, charging them exorbitant fees and giving them the wrong advice. In many cases, the families end up owing more money than they did initially.

I welcome the Bill. It is essential legislation. The Government promised a personal insolvency Bill but we are still waiting for it. Perhaps when the Minister of State is replying, he might tell us if the Bill will be introduced before the summer recess because we need it as quickly as possibly, particularly in conjunction with the Bill we are putting forward tonight. Between the two Bills, there is some hope for those families who owe money and who are finding it difficult to deal with banks and building societies.

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