Michael Moynihan (Cork North West, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on the debate and compliment Deputy Michael McGrath on moving a timely motion. This is one of the more serious issues with which every public representative is dealing on a daily basis.

Deputy Fleming said the banks must learn from this. The parties opposite will remember that a bubble was created in the agricultural sector when we joined what was then known as the Common Market. Enormous prices were paid for agricultural land in the mid to late 1970s. It took a decade or more for farmers to trade out of it. A debt relief system was introduced in the 1980s to sort out the difficulties of the farming community. Many farms were sold and repossessed. Deputy Fleming's point is that in the case of that crisis, things were softened and farmers were allowed to trade out of difficulty. The banks did not learn the lessons of that credit bubble. We must ensure, whatever decisions are made at Government level or in the Oireachtas, that what has happened in the past will not be allowed to happen again.

If we take that as an example, the fundamental issue with regard to house repossession is the targeting of those who simply cannot pay their debts but want to pay them. I have constituents coming in to express their concerns in this regard. For instance, I went with a couple to a meeting with their bank in the fall of last year. The couple, who have a number of children in secondary school and possibly going on to college, outlined their expenditure, which was of the most modest kind. There was no extravagance whatsoever. When the meeting on the debt was over, the bank's representative gave an assurance that there would be no house repossession. The debt problem has not resolved itself and we had occasion to meet the bank again in the past four to six weeks. When we were finishing that meeting, the bank official was not able to give us the assurance on the house repossession that was given to the family in the fall of last year. That is where that family is at. That is where thousands of families are at right across the country.

We must look at the banks. The capital and the returns and all the rest of it will have to be marked up, but politics is about managing to ensure there is not only an economic policy but a social policy. This country, by and large, has developed a significant social policy over the years, to the betterment of many families, and we want to continue on that path. That episode in which I engaged with the banks shows clearly that there is a different attitude within the banking sector. There is a significantly different attitude coming down the line and the staff who are at the coalface meeting borrowers are being told a different story.

In the small-to-medium business sector there is a considerable overhang of debt as well. Until we deal with this in a manageable way - we can repossess houses all we want, and we saw an episode of this last week when auctions were disrupted and stopped - why would a bank take on a repossessed house when it will not be sold on the market?

A person who came to me on Monday last, and on Friday of last week, told me he had been engaging with the bank and had no arrears with it in any shape or form. He said he had told the bank that he had encountered a considerable difficulty due to a loss of employment. After leaving the bank on Wednesday, he got a letter from one of the banks, the opening paragraph of which stated that the best option for him was to sell the house. That letter was issued after discussions, but there was not one cent of arrears on that mortgage or on any other private borrowings of that couple. Those are the instances with which we are dealing, and there are far worse cases. I will not even refer to the pressures moneylenders are applying right across the country. This is one of the most fundamental issues challenging the ordinary decent people of this country at this time, and how we handle it will be a measure of how our society will develop.

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