Alan Shatter (Dublin South, Fine Gael) | Oireachtas source

I thank all the Deputies who contributed to this debate, including those with whom I have had robust exchanges. I thank Members of both Fine Gael and the Labour Party for their support and for raising issues about which we all have particular concerns. Those concerns are shared on all sides of the House. I also thank Opposition Deputies for the contributions they have made.

I want to reiterate a number of key points about the Bill before the House today. The Bill does not create any new right of repossession on the part of lenders. It restores a right which was specifically intended to continue to exist under reforming legislation enacted by a Fianna Fáil-led Government in the Oireachtas in 2009 in circumstances in which certain High Court judgments had raised doubts about the ability of lenders to exercise that right. There was never any suggestion in 2009 that anything was intended other than that the repossession laws would continue to exist. Doubt has arisen in the context of those laws as a result of a certain judgment of the High Court. As other Deputies have correctly pointed out, even for pre-2009 mortgages, lenders can take other approaches to recover money due to them. Section 1 of the Bill restores the necessary certainty to continue a legal provision that has been part of our law for centuries.

It was Deputy Kelleher's party that entered the original arrangement with the troika and I presume Fianna Fáil, if it was still in government, would keep its commitments. While there is a troika commitment to introduce this legislation, it is necessary anyway.

We cannot sustain an ongoing lack of certainty with regard to the legal position on mortgages. We cannot sustain a situation in which, on the one hand, banks are expected to lend money by way of mortgages and, on the other hand, there is lack of certainty about the exercise of their legal rights when it comes to major default by a borrower. It is simply an unsustainable legal position to maintain.

I have stated on a number of occasions that repossession of family homes is intended to be a last resort after all other avenues have been tried and tested. Even where the point of a court action for repossession of a person's home is reached, the Bill makes specific provision for a late intervention safeguard for borrowers by allowing for an adjournment for the parties to investigate the alternative of a personal insolvency arrangement, PIA. That is a facility that was not available under the 2009 Act because our predecessors in government neither enacted any new personal insolvency legislation nor put in place the alternative debt resolution mechanisms, which now exist and which, right at the end of his contribution, Deputy Kelleher kindly acknowledged. Listening to some of the contributions made in this House, one would think either that the personal insolvency legislation had never been enacted or that major flaws had appeared in it since it came into operation. The agency is established, the website is functioning, people are making inquiries and the legislation should be operative and available to assist people within a couple of months or so. We will judge how successful it is when it is operating and, as I stated, if it turns out there are any flaws in the legislation, we will address them with any further legislation that may be required.

The Bill is not an isolated measure. We have in place the personal insolvency legislation designed to provide protections for people, but the Bill also exists within the context of a range of interventions which the Government has made specifically to assist with the debt and mortgage arrears crisis which we face. In addition to the personal insolvency legislation, we have in place the statutory Central Bank code of conduct on mortgage arrears, CCMA, and within the code, the mortgage arrears resolution process, MARP. Further, the recent Government statement on resolving the mortgage arrears crisis outlines a range of actions that have been taken, or will be taken, including the setting of time-bound targets prescribed for the banks to make arrangements with mortgagors in default.

This Bill will not open the floodgates for repossessions as some have alleged. It will reinstate the legal right of lenders in pre-2009 mortgages to go to a court as a last resort to repossess mortgaged properties where there has been a major default by a borrower. It is worth noting that the decision in the Start Mortgages case has been appealed to the Supreme Court. If we did not enact this legislation, it may well be that the appeal, if it comes up for hearing, would result in the Supreme Court taking a different view of the law to the High Court. We do not know that but it is right that we set out the position clearly in statute. As I have repeatedly said, it was never the intention, under the 2009 legislation enacted at a time when Fianna Fáil led the previous Government, that this right would have been compromised by the legislation, but arising from the manner in which provisions in the Interpretation Act 2005 have been interpreted in certain court cases, this has happened. The range of other possibilities which we have introduced for resolution of mortgage arrears and debt problems, including measures under the mortgage arrears resolution process and the statutory code of conduct on mortgage arrears, the targets set for the banks to make sustainable arrangements with mortgagors in default and the new personal insolvency legislation, all provide extensive supports for borrowers well upstream of any move for repossession, contrary to the perception of Deputy Ross, as he engaged in his usual single transferable speech and rhetoric. Repossessions will not be the first option available to banks where borrowers are in mortgage difficulties. Where an action for repossession arises, the Bill makes provision for an adjournment to ensure the alternative possibility of a personal insolvency arrangement with the intention of allowing the borrower to keep his or her home and to investigate the background.

I am conscious that I have only five minutes and I apologise to some Deputies if I do not get to reach all of the issues they have raised. We will come back to them on Committee Stage.

Deputy Donnelly, along with a number of other Deputies, raised the issue of the conduct of the banks in efforts to seek a resolution of borrowers' problems. In particular, criticism was made to the effect that the Bill does not require a court, in considering an application for an adjournment, to take into account the bank's behaviour. This was repeated by a number of Deputies. I would direct the Deputies' attention to section 2(3)(d) which allows the court to take into account the conduct of both of the parties to the mortgage in seeking to resolve issues concerning arrears on the mortgage. I would also point to direct evidence that the courts are, in fact, taking banks' behaviour into account, as witnessed in the recent case of Irish Life and Permanent plc v. Duff & Anor where Mr. Justice Hogan refused to order repossession, part of the reason being the fact that the bank had not complied with the provisions of the Central Bank code of conduct on mortgage arrears. Having said that, I will consider, in the context of Committee Stage, whether there is more we should do in this area and, indeed, take account of the views expressed by the free legal advice centres.

It is worth pointing out to those Deputies who question the adjournment period of two months that this adjournment period is provided to allow consideration of a personal insolvency arrangement. However, section 2(4) provides that the court may grant a further adjournment if, by the end of that period, it sees real evidence of progress towards a personal insolvency arrangement.

I should add that the purpose of the 60-day time period is to enable a debtor to engage a personal insolvency practitioner with a view to applying for a personal insolvency arrangement and, within the PIA process, to apply for a protective certificate under the Personal Insolvency Act 2012. The effect of the protective certificate, which will operate for a period of 70 days from the date of issue, is to prevent creditors covered by the certificate from initiating proceedings or continuing with proceedings, even where such proceedings were initiated before the application for the protective certificate, and in such circumstances a further adjournment would not be required.

Deputy Mac Lochlainn and others indicated their belief that banks will choose which properties to repossess on the basis of the amount of equity in the property. That is a possibility, but I sincerely hope that this will not be the case, and the Government will be monitoring the behaviour of the financial institutions on this and other issues to ensure this type of unintended outcome does not arise. Financial institutions are being encouraged to facilitate people by debt settlement arrangements even prior to them having to invoke the provisions in the personal insolvency legislation. I want to make that absolutely clear. As I stated on many occasions, debt settlement arrangements include, in appropriate cases, where persons are weighed down by unsustainable debt, the writing off of a portion of the outstanding capital due in order that they can recalibrate their financial circumstances and return to sustainability.

A number of Deputies raised the issue reported in the Independentnewspapers recently about the possible closure of money advice and budgeting service, MABS, offices. As Deputies will be aware, MABS is a free, confidential, independent and non-judgmental service for those in, or in danger of getting into, debt in Ireland and it has more than 60 offices nationwide. Some Deputies did not seem to be aware that MABS will play a central role in assisting borrowers in the area of debt relief notices under the insolvency legislation. The Citizens Information Board, which comes under the aegis of the Department of Social Protection, has statutory responsibility for the service and provides funding for and supports the 53 individual companies which make up the service. As with any such arrangement, a service level agreement is made between the funding body and the companies. My understanding is that a new service level agreement is being discussed. It would not be appropriate for me to comment further on such discussion other that to express my wish that this valuable service should continue in the future. It is an essential part of the architecture to ensure the workings of the Personal Insolvency Act.

I was a little taken aback by the manner in which Deputies Niall Collins and Kelleher sought in their contributions to try in vain to present their party as the party of the common man. Listening to their contributions, one would think Fianna Fáil had been in Opposition since the founding of the State and that it had no hand or part in the economic crisis that has befallen the country, in the explosion of the property bubble or in encouraging individuals to borrow recklessly. All of their protestations about lack of fairness and tilting the balance in favour of the banks conveniently ignore the fact that the Government, as I outlined, has put in place a number of key measures to support ordinary borrowers in financial distress, measures our predecessors in government failed to put in place.

I note Deputies Niall Collins and Kelleher stated that their party will be tabling meaningful amendments to the Bill, and I hope they will be more meaningful and more relevant than much of what they had to say about the Bill so far. Having said that, I have a simple view. If there are constructive amendments that Deputies wish to propose, I for one will be happy to give consider to them.

I am conscious that we are reaching 1.30 p.m. If I can make one more point, I will conclude.

Deputy Boyd Barrett made a very interesting speech and there is a strange similarity between what he had to say and what Deputy Ross, despite being the former business editor of the Sunday Independent, had to say. Their mutual view seems to be that the banks should lend money but never have a right to recover it. Deputy Boyd Barrett seems to believe that banks should never have the right to repossess homes from ordinary people. If that were the case, the ordinary people would not be in a position to obtain mortgages. Clearly someone seeking a mortgage needs security, which must be meaningful. I am afraid the approach taken by both Deputies is completely unrealistic and politically opportunist.

I thank all those who have spoken and apologise to those who made some very important points for not having the opportunity to respond to them. I hope the House will support the Second Reading of the Bill.

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