Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance) | Oireachtas source

This Bill deals with two important issues and I am very concerned about both. There are changes to the Central Bank Act with regard to building societies, particularly allowing building societies to transfer assets, infrastructure and so on to banks, which is precluded in the 1971 Act. It was reported to us on the finance committee that this is being done because the European Commission is requiring this of Bank of Ireland because of state aid rules. If I am correct, this would allow the ICS platform, which may be attached to a mortgage book, up for sale. That is very worrying, given what we have seen happen in the Irish Bank Resolution Corporation, IBRC, mortgage book. That book, containing debt from the former Anglo Irish Bank, is being put up for sale and vulture funds are seeking to get hold of and profit from it. As a result, there is great concern among mortgage holders about changes in circumstances and the fact that somebody else will hold the mortgage. These funds are not regulated so they do not necessarily have to comply with any codes of conduct or regulations that mortgage holders would want.

We debated this at the finance committee and departmental officials suggested that the logic was conditional, as it was as possible that the book would be sold to regulated financial entities as it would not. Given what is happening now, it is highly likely that regulated entities will not buy the book, and we seem to be witnessing vulture funds from the US and elsewhere making the purchase. They were probably prompted and encouraged by the words of the Taoiseach when he was in New York on St. Patrick's Day, telling American investors that Dublin is the place to go in order to make a killing on the property market. Those were highly irresponsible comments from a Taoiseach in encouraging speculation in Irish property, mortgages and so on. These vulture funds and financial institutions seem to be moving in here at a rapid rate, and the Government seems very keen to facilitate them. This case involves state aid rules from the European Commission, which are obnoxious anyway. The Commission is very selective in its application of state aid rules, which are largely a pressure on states to privatise certain institutions, and in this case it involves the selling of assets to what are potentially unregulated bodies.

I asked the very simple question at the committee of whether the ICS customers even know this is happening, and that their mortgages could be transferred to another financial institution or unregulated vulture fund. Has anybody bothered to contact them to indicate legislation is going through the Oireachtas facilitating this process? It is something with potentially profound implications.

There will be no conditions put into the legislation to protect those people. The Joint Committee on Finance, Public Expenditure and Reform discussed this but, as I understand it, no changes have been made. That is typical of the very shoddy way the Government treats the innocent victims of a financial crisis created by the activities of bodies such as the European Union, the banks and property speculators who speculated on mortgages and so on. The same people are once again a party to moving things in their own interests, regardless of the potential consequences for innocent customers of ICS. That is pretty rotten. I strongly suspect many of these people do not even know this is happening and will not know till after the event, when it is too late. For that reason I oppose this Bill. It should not go any further.

The distinction between building societies and banks no longer exists because there are no longer building societies in the proper sense. A distinction was drawn between the two in the Central Bank Act 1971 because there was an awareness that building societies operated on different principles from commercially oriented profit-driven banks and should therefore be treated differently. That has changed; building societies no longer have that ethos and are in effect banks. It is worth remarking on that fact because there was somehow an understanding that one might be better off with a building society or that some people might prefer to be with a credit union because of banks’ profit-driven agenda. People wanted to be treated differently, more humanely. That distinction between building societies and banks is gone, and while I do not know enough about ICS to say, it may have had a different style or relationship with its customers which could dramatically change after the handover to Bank of Ireland, but even more so after the handover to some other entity to which these things could be sold. This will suddenly be inflicted on the people concerned. It is rotten, and may produce another crisis for those people similar to the one that occurred with regard to the Irish Nationwide mortgage book. I will oppose the Bill for that reason.

In respect of the Greek bailout, as I understand it, we will forego the profits we might otherwise make on Greek bonds and give Greece cheaper loans to get it out of its difficulties. Why the hell did we not ask for the same facility? I would not want to deny that facility to the Greek people. When we ask why we did not ask for the same facility, the answer is that a lot of conditions were imposed on Greece, the implication being that those conditions were so harsh and so awful that we were better off not asking for it. I do not accept that, because conditions were imposed on us for the deal we did with the troika which were absolutely brutal and have savaged people in this country and done extreme damage to our economy and society. I do not understand why the Government did not ask, apart from the fact that its whole policy has been to be the best little boys in Europe and do exactly what the troika says in the hope of reward, but that reward is not forthcoming for the majority of citizens in this country. I am concerned about it because it is tied up with a so-called bailout which imposed brutal conditions of austerity on people. We should not sign up to it.

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