Catherine Murphy (Kildare North, Independent) | Oireachtas source

Had this Bill been introduced in 2000, no one would have disputed any aspect of it because it would have been introduced in more normal times. In principle, there is no problem with introducing a means of controlling credit. However, the new credit register will become a new worry for many people who are already overburdened with worries. It will place those people who are just about credit-worthy in the position of having to use the most expensive forms of credit, namely credit cards or money lenders. We are creating a statutory database and giving control of it to the very people we had to bail out; the very people who put some borrowers in the awful position they are in by pushing money at them, through 110% mortgages, allowing parents to guarantee mortgages for their children, providing students with completely unsustainable loans and so forth. In that context, the question of how this register is handled is a key issue. There must be safeguards in place for borrowers and a safety net for those who need to borrow money and who cannot do so because of this database. We must ask where people will get money in that situation. In an environment where there is less flexibility for community welfare officers, for example, one would be fearful for people in that position.

The credit register is being set up on a statutory basis and will be run by the Central Bank. Such a register would have been a very useful tool to control the level of personal indebtedness during that period when excess credit at low interest rates - which did not suit this country but suited countries such as Germany - was widely available. The high level of personal indebtedness was no secret during the boom years. In fact, it was referred to constantly at the time. It is not the current Government's fault that a mechanism such as this central credit register was not available then but it was a major oversight in terms of good governance and the role of the Central Bank. It is also part of the reason we have been left with this legacy. We must be mindful of the people who are trapped by the worst elements of that legacy and be careful about how they are treated. I am concerned by the lack of a counterbalance for such people.

The information contained in a credit register would have been invaluable to policy makers in terms of giving them exact information on the levels of personal indebtedness being built up in this country. Having said that, it was widely known that while our national debt was under control, our levels of personal indebtedness, as a result of the cost of housing, were growing exponentially.

I feel more than a little resentful that the very institutions whose lending behaviour was beyond reckless are now being given this resource and I am fearful about how they will use it. I cannot emphasise that point enough. An individual's credit worthiness is enormously important, particularly when there is little credit available and the lending environment is much more constrained. The register may provide banks with a reason to turn an applicant for credit down, especially if there is someone else in the queue for credit with a better credit rating. In that sense, it will be about the strong surviving and that is why the issue of a counterbalance must be examined.

We cannot pass a Bill such as the one before us without reflecting on issues such as the sub-prime mortgage lending that went on in recent years and the availability of 110% mortgages. We must also consider the position of parents who guaranteed the mortgages of their children.

The credit rating of both would be affected and perhaps neither will have a roof over their heads. The banks will extract the maximum possible from the arrangement. There is not two ways about it as the economy was handled between 2000 and 2007 to ensure that people felt they had money in their pocket so that the desired result could be delivered for the incumbent Government. The people who will be caught in the credit rating trap will be those who had their votes bought with fairy tales about what could be done.

The following issue may not be related to the legislation. The economy of this country and others is overseen by agencies like Moody's, Standard and Poor's and Fitch, which have made disastrous calls in the past. Those agencies gave our banks, including Anglo Irish Bank, AAA ratings but they can walk away after saying they merely made a mistake. The person who is looking at the guidelines produced today and who can see no way out except for the very public process of personal insolvency - a type of penury - cannot act in this way. There is a very real consequence for those people, and it seems that the agencies that are so lauded in the international capitalist community can get away without even being chastised. If we had a system where those agencies called it as it was and there was a restriction on personal indebtedness, we would not be in our current mess.

I am concerned about how this process will be used and I will give a separate issue as an example. There has been some mapping of flooding in the country, which is a great idea, as it will ensure we will not make the mistakes seen in the past in building on flood plains, etc. The problem is the mapping is being used by private insurance companies to refuse to insure people's houses where there has been flooding in the past. Something similar could happen when the process outlined in the Bill is in the hands of institutions that have been so hesitant in dealing with matters like mortgage debt or debt forgiveness, even when the Government has given a large amount of money to resolve such issues. They have not done it.

I know a case where a builder went bust but he is now back in action, with his son as the principal figure in the company. The builder in question is working away and offering to build houses. Credit ratings do not seem to affect such people in companies, which can reinvent themselves, but individuals cannot do this. The Government has a duty of care to see there is a system in place to ensure people are creditworthy, and it must deal with individuals and families trying to find a way out of their credit rating problems.

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