Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

The Bill is a missed opportunity. There was huge potential here had a proper concern been shown which has been missed. I listened to some colleagues welcome the fact that the Taoiseach will get involved in this area and talk to people. The Minister of State, Deputy Damien English, will be familiar with the fact that this time two years ago during the by-election in Meath East, the Taoiseach was very interested in talking to people about mortgage arrears. He even took a person telephone number and told him or her to telephone him. However, we did not see a great deal of action from that.

Here we are with a Bill that offered so much in terms of protection, but if we are to read the analyses being prepared on the Irish mortgage market by financial concerns and expert groups, including New Beginnings and the Irish Mortgage Holders Association, it appears that 2015 will see an avalanche of repossession applications on the part of banks. One has to ask oneself if the legislation will provide any protection against that avalanche. It will not. The legislation as presented is a PR person's dream. Irish banks will sell their loans to third parties who are not regulated under the legislation and wash their hands of the repossession activity that follows. If the Government is committed to making this as robust as possible, it will hopefully use Committee Stage to strengthen the Bill to prevent that happening.

There is a commitment in the legislation on SMEs. A number of banks that were formerly active in the market are actively deleveraging their interest in loans and selling them on to venture funds, which are also known as "vulture funds". The loans are being sold on in blocks. A person's loan, relationship with the bank and the money he or she may owe as a business person or individual to a bank is put together into a block of loans, given a fancy title, a few of which I notice are geographically related, and then sold on to entities we know nothing about. I have engaged with one of the banks in particular on two cases over the past few weeks for companies employing approximately 50 people in the service industry. Property loans were taken on by those companies and the economy is where it is at, but the day-to-day business and employment is still viable. The future of these businesses is still viable and if the bank were interested in the customer and the 50 people working in those companies, it would engage with them to come up with a solution that could be managed. That would involve a write-down of what in some cases is a disgusting rate of penalty interest and a commitment to servicing the principal of the loan. That is the offer that was made but because the bank involved is regulated by a Government outside this jurisdiction and that Government is putting pressure on the bank's parent company to sort its book out, there is no engagement and no willingness to engage.

There is certainly no concern for the people who work in the enterprises in question and no respect for those who have created the employment. There is a wish to sell the asset as quickly as possible and move on. The legislation will do nothing to offer protection to the loan holders or those working in these relationships.

My two cases are indicative of many across the country. The bank to which I refer is about to launch an avalanche by selling off its commercial loan book, particularly the distressed commercial loans. Although it will sell distressed loans to a vulture fund that will call them in and close businesses, in seven or eight months time it will state it tried to support the businesses and that they did not close on its watch. Nothing in the Bill offers any protection against this.

The Minister of State, Deputy Damien English, knows from his previous role as Chairman of the Oireachtas Joint Committee for Jobs, Enterprise and Innovation that one of the most significant issues facing SMEs is legacy debt on investments made in the so-called good times. Many businesses with very solid business models which have managed to trade on a day-to-day basis successfully, in spite of the challenges of the past three years, have come through and are still providing employment and making a day-to-day profit. However, businesses that invested in enhancements or expansion during the so-called boom are being brought to their knees by banks, including the pillar banks and unregulated banks. Will the legislation do anything for them, even offer a nod in their direction by acknowledging we have a problem, or give any indication that the Government understands the debt challenges facing SMEs? No, it will not.

The legislation reflects an ongoing approach of sticking one's head in the sand and hoping the problem will go away. It will not; it is getting worse. I regret to have to predict that by the end of the year many more businesses will have gone to the wall because there is no support to protect viable day-to-day businesses and make some arrangement to deal with the legacy debt to be paid off in the long term or parked until businesses can grow and we can grow employment or, more importantly, protect those who are employed by these businesses.

Deputy Fergus O'Dowd made a very important point about how loan companies advertised. The other day I saw an advertisement for a pay-day loan that showed, in the smallest print possible, an interest rate of 400%. Such companies are preying on people who find themselves in very difficult circumstances. We need to do much more to tackle them. We need to do much more to resource MABS which is doing phenomenal work to deal with the consequences of the economic crash throughout the country in providing staff and an ability to offer its services. MABS will be needed because of the weaknesses of the legislation as presented. Let us hope that on Committee Stage the Government will take on board FLAC's recommendations and the concerns expressed about the inadequacies of the legislation.

We must stand up and say we will not allow venture funds or vulture funds to take over Irish loan and mortgage books and repossess homes. Tenants in buy-to-let properties which the landlords are forced to sell and who need to rent another house or apartment at a time when rents are going through the roof are joining social housing lists which are already under enormous pressure. We have a code, to which the Tánaiste referred some weeks ago. Will the legislation do anything to assist these tenants and borrowers? The answer is "No". There is nothing in it, despite the awareness of the problem facing the buy-to-let sector and the need to protect tenants who are paying their rents and doing everything expected of them to keep their homes but whose landlords are not. When a landlord loses his or her house, the tenant often loses the roof over his or her head. The legislation could give protection if there was a commitment to do so. This is very important.

Although we have all dealt with cases in which the Central Bank code of conduct on mortgage arrears is being abused, no action has been taken to sanction any bank. We need to take the powers seriously and begin to sanction banks which abuse people's rights. We need to tell any bank that is considering divesting itself of its interests in Ireland that it cannot use legislation to protect its brand, while divesting itself of its interests in Ireland. The legislation offers this opportunity.

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