Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move:

That Dáil Éireann:notes that:

— the standard variable rate for residential mortgages charged by State-owned Permanent TSB and AIB/EBS, as well as other banks operating in the market, is up to 2% higher than comparable mortgage rates in other eurozone countries;

— for a typical €200,000 mortgage a standard variable rate customer will pay approximately €6,000 a year more in interest than a borrower with a tracker mortgage;

— banks which operate both in the Republic of Ireland and Northern Ireland are on average charging customers in the Republic 2% more for a standard variable rate mortgage;

— normal competitive forces which would allow customers with high mortgage costs to switch to an alternative provider are not currently present in the marketplace, effectively trapping customers with high standard rate mortgages;

— the Economic Management Council has not met with the banks since June 2012;

— the European Central Bank base interest rate is at a historic low of 0.05%, and the cost of funds for the banks has fallen considerably in recent times; and

— recent mortgage interest rate reductions announced by certain banks have targeted new customers only and were not extended to their current standard variable rate customers; and

calls for:

— the Economic Management Council to meet with representatives of the banks at the earliest opportunity and to impress upon them the unfairness of the current pricing regime in respect of standard variable rate mortgages;

— greater product innovation on the part of financial institutions in the mortgage market;

— an investigation to be undertaken into the level of competition in the Irish banking sector;

— legislation to ensure that all residential home loans in the State are subject to the protection of the Code of Conduct on Mortgage Arrears and have access to the Office of the Financial Services Ombudsman;

— residential mortgage holders whose loans are being sold to third parties to be protected from profiteering;

— the Minister for Finance to bring forward a white paper on competition in the banking sector; and

— the Central Bank of Ireland, in its consumer protection role, to engage directly with the banks on the issue of high standard variable interest rates and on the need for fair treatment of existing standard variable rate customers as well as new mortgage customers.

I wish to share time with Deputies Robert Troy, Sean Fleming and Éamon Ó Cuív.

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