Tom Fleming (Kerry South, Independent) | Oireachtas source

I compliment Deputy Stephen Donnelly on bringing forward these rational and logical proposals. They offer practical measures to resolve the greatest scourge facing people in recent years. We have not seen the likes of this catastrophic situation in any facet of Irish life. It is a problem that is spiralling out of control at a rapid pace and affecting thousands of people. Up to 117,000 families are in mortgage arrears, with an additional 35,000 buy-to-let mortgage holders in the same predicament. The number of repossessions is surging, with recent Central Bank data indicating that the banks are immediately threatening 31,000 home owners with the loss of their properties. There are up to 1,000 repossession cases coming before the courts every week, in locations throughout the country. This situation is set to escalate in the coming months if the current trend continues.

Threats to take people's home make up to 40% of the solutions the banks are proposing as part of the targets set for them by the Central Bank for dealing with the arrears crisis. These home owners are, by and large, the victims of a very much unregulated and uncontrolled market in which the banks were the reckless instigators. Those institutions are responsible for perpetrating the current situation, which has an enormous social cost. Of course, these are the same lenders which were bailed out by the already overburdened and victimised taxpayers and have now been reincarnated as wolves in sheep's clothing. We are effectively seeing a return of the bailiffs who were part of Irish life in an earlier era. The threats of evictions and actual evictions that were so prominent a part of our history are again a feature of daily life.

The banks are acting ruthlessly in their application of the repossession process and are robbing people of their dignity as well as the roof over their heads. In most cases, indebtedness is not the fault of the home owners. Many people in arrears have lost their employment and are dealing with extremely stressful circumstances. There is often a high rate of illness and family breakdown. Every Member of this House will be aware of that from meeting people in their constituency clinics. We are seeing, on a weekly and daily basis, terrible cases where people have been dealt with very harshly and are suffering greatly.

At the same time, the banks are crucifying variable-rate mortgage holders to make up for losses in other parts of their business. Some lenders are even giving new customers a lower rate than that being charged to existing variable-rate mortgage holders. Bank of Ireland, Permanent TSB and KBC Bank exemplified this policy when they recently cut their main variable rates for new mortgage applicants but not for existing customers. This is another example of harsh treatment and it is very demoralising for struggling borrowers stuck with variable-rate loans. The Central Bank, meanwhile, is standing off on the sidelines and allowing it to continue. It is not enforcing the statutory customer code that requires the banks to give fair and equal treatment to all their clients. The Government must act with speed to address this issue. The Minister for Finance needs to work with the Governor of the Central Bank and engage directly with the banks to secure an immediate lowering of the standard variable rate for existing mortgage holders. There is a huge disparity between the rates being charged in the Irish market and those pertaining in other eurozone countries. In fact, there is anything in the region of €3,000 to €4,000 of a difference in what is being charged on an annual basis.

The banks are back to making huge profits and are paying hugely reduced interest rates on the money they borrow. Unfortunately, this is not being passed on to customers. Given that the European Central Bank rate is at a record low of 0.05%, it is imperative that the unsustainable rates being imposed on variable-rate mortgage holders in Ireland are dramatically reduced. This debate will give the Government leverage to take action with urgency. Thousands of home owners cannot sleep, eat or function in a normal manner because of the stress they are under, with serious negative effects for their health and well-being.

A precedent has been established with the setting up of the Strategic Banking Corporation of Ireland in the past five or six weeks with Government support and funds are being channelled through Bank of Ireland and Allied Irish Banks. It was set up to kick start small businesses, which is very welcome. Money is being extended and made available at less than half the current rate at a rate of 2%. A typical five-year loan of anything up to €400,000 is likely to cost a small and medium enterprise €15,000 to €20,000 less than the current market costs over the lifetime of the loan, which is very welcome. If the banks and the Government can facilitate the small and medium enterprises, there is no reason they cannot extend that facility to the domestic market in light of the current circumstances. I am sure the Governor of the Central Bank, Professor Honohan, would agree with and approve of that proposal.

I mentioned the word "urgent" in this respect and at this stage for many people it has come down to the wire. People are suffering ill health and are in dire straits. This crisis is affecting them and causing family breakdowns, and that is only the tip of iceberg if the current process is going to continue. It has devastated lives and families and pushed many people to the brink. They are frightened and disillusioned and perceive there to be a cosy relationship between the Government and banks. I would hate to think that perception would be allowed to exist, and I am sure that no one on either side of the House would want that perception to continue to exist. There is a need to ensure that from tonight drastic and urgent action is taken at speed.

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