Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein) | Oireachtas source

The aim of this Bill is simple: that the Central Bank be given the power to impose a cap on variable mortgage interest rates. We know that the rates currently applied by some banks in Ireland are among the highest across Europe. All the while, the Irish public has had to cough up further taxes and charges, including double taxation of water. At the same time, the Government has reduced supports and services across the board. Despite this reality for citizens, with financial worry leading to ill health and in some cases to tragic consequences, this Government has failed to exert any influence of substance on the banks.

Those who say this Bill would give too much power to the Minister and the Central Bank must remember that the measures are limited by time. The legislation as a whole is designed to lapse at the end of 2017. Banks can also apply for a review after six months. This would cover eventualities in which the cost of borrowing by the bank increases. We recognise that the adoption of this Bill would require a change of direction for the current Government, but anything that switches the balance of for-profit finance back in the direction of the populace at large is a positive measure. There are also measures in place that would ensure this could only be applied where the Central Bank has examined several factors, including the profit level and size of the bank, along with its interest rates and ECB interest rates.

For the first time, this Bill would introduce a legal process whereby the regulator would have the power to set a cap on the standard variable rate that the covered institutions can charge. The Minister for Finance would be able to ask the regulator to undertake a review which could lead to a rate being set. The regulator would decide whether a cap was to be set after an analysis of the bank.

Why specifically AIB, Bank of Ireland and Permanent TSB? They hold the vast majority of mortgage accounts that are in arrears. Also, these banks would not exist today if the Irish people had not bailed them out. These three banks are partly or fully State-owned. The Governor of the Central Bank, Professor Honohan, has himself stated that he feels a cut in the standard variable rate would benefit the economy at large. The current Government has been overly beholden to financial institutes and gambling individuals, often forgetting the very real and tangible social effects of its decisions. This was evident in its continuation of Fianna Fáil cutbacks, and it is evident once again in its failure to lead a fair recovery.

We need to ensure that mortgage holders are given a fair chance of repaying their borrowings at a reasonable rate. We need to address the current situation in which a lack of competition has had the effect of maintaining artificially inflated rates. Those with distressed mortgages, estimated at 100,000 people, have been left high and dry by this Government. It is now time to act, and this Bill provides the means.

While the Government may have talked the talk about asking the banks to pass on the ECB interest rate cut to struggling mortgage holders, they have failed to achieve much. When push came to shove, they did nothing. What have the public interest directors on their boards done? Little, if anything. I ask the Minister of State to outline how she sees such directors optimally taking a part in such issues.

Deir an Rialtas gur thriail siad labhairt leis na mbainc ach nár tugadh cluas éisteachta dó. Tá tráth na cainte leis an dream sin a chúisigh pian agus peannaid an iliomad daoine timpeall na tíre thart. Rialtas maith é ceann a thabharfadh ceannaireacht agus a chinnteodh athshlánú cothrom don tír.

The days of talking to the banking institutions, which through their greed have caused suffering the length and breadth of this country, are over. We need to see a clear affirmation of who is actually in charge - those elected by the people of this State, or the bankers who have only profit as a goal. Fine Gael and the Labour Party will tell us that by supporting or not supporting this Bill, as the case may be.

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