Dara Calleary (Mayo, Fianna Fail) | Oireachtas source

This is the first Private Members' business in the new Dáil, but the more things change the more they remain the same. This is the third occasion on which Deputy Michael McGrath has tabled legislation similar to this - twice last year and now. This is the third occasion on which variable rate customers throughout the country who are being ripped off by their banks will be blocked from seeing some progress on how they are being treated. The reasons cited this evening are different from those cited on the two previous occasions. We now have a constitutional issue and the ECB needs to be consulted. Why were these issues not flagged or investigated in March or July 2015 in order that action could have been taken to deal with and get around them?

The lack of urgency in how this issue is being treated is evident in the note given to us by the team at the Oireachtas Library and Research Service which shows that in May 2015, at the time of Deputy Michael McGrath's first motion, the Central Bank published a paper on the influences on standard variable rate mortgage pricing in Ireland. Very little action was taken at the time. The Cental Bank then commissioned a consultation paper in November 2015 on increased protection for variable rate mortgage holders. The closing date for the receipt of submissions was 12 February and the bank is currently assessing them. There is a lack of urgency for those who are at the pin of their collar in trying to pay what they are being charged for their mortgages. There is a lack of urgency for people who have a constitutional right to housing, but the same Constitution is being cited as a reason they should be denied proper rates and proper action. We now have a Government amendment which proposes to kick the can down the road for a further six months, while the latest excuses and reasons are examined. That is why, as a House, we cannot stand for this, while people are at the pin of their collar in trying to make repayments.

Deputy Michael McGrath deserves commendation for raising the issue consistently. It has added to public discussion and public discourse and brought media pressure. I join him in praising people such as Charlie Weston. The media have put pressure on some of the banks. Today I heard some commentators state that if the Bill was passed, there was the potential for an increase in the cost of funds to Irish banks. I cite Deputy Michael McGrath's figures from Bank of Ireland's annual report. It pays costs of 0.8% and charges 4.5%. At the same time, it is offering new mortgage customers the chance to get their first payment back to help with the cost of their fees. What about existing customers? Why should they pay for this incentive and offer to new customers? The commentary over the weekend on AIB's recent move was that it was getting ready to get back into the competition market.

When one sees big billboards promising customers their first mortgage payment back or assistance with their legal fees, it brings one back ten years to 100% mortgages and that is not a space to which any of us want to go back in terms of a relaxing of the rules. What we want, however, is fairness. What we want is to give people a chance. What we want is that people who made the choices and purchased their houses ten years ago be given the same sort of treatment as people who do that today.

This Bill is particularly well drafted. It allows for differentiation between different lenders, recognising that each lender in the Irish market has different circumstances facing its particular balance sheet. It gives the power to the Central Bank to do that. The Minister will say the Central Bank does not want that power but consumers need someone to have that power. If the Central Bank does not want it, the Competition and Consumer Protection Commission should surely have it or use it to try to inject fairness and a bit of competition into the system. Another reason given for not accepting this legislation is it might frighten competition away. Anybody considering a market that charges 0.8% cost of funds and can charge 4.5% will think there is a lot of opportunity there. That is a fact and that is the one figure that stands out and it is probably applicable to many of the other banks.

The same applies to SMEs and farms. They are not getting the kinds of reductions in cost of funds that are being given to the banks by the ECB and others. SMEs are being faced with a cut in banking services and massive increases in fees and their loans are being sold off to people with no protection for those loans, with the smallest possible reason being used to call in the loans.

The Minister is right: one needs a PhD to switch. Yet when one sees banks offering customers deals to switch but not making it any easier for them, one would want treatment from a medical doctor and for the price of switching, one would be able to buy a PhD.

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