Bobby Aylward (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

By introducing this legislation tonight, Fianna Fáil and our spokesman on finance, Deputy Michael McGrath, are offering the Government an opportunity to halt the scandalous practice of banks charging customers unfair and unjustified standard variable mortgage rates. In March 2015 Fianna Fáil put this issue firmly on the agenda with a motion on the subject of rip-off variable rates being charged. Last July I spoke on this matter during Private Members' time and it is unfortunate that almost a year later we are discussing the same issue and very little has changed.

Further progress is clearly needed to ensure fair treatment of standard variable rate mortgage holders. This is probably the most scandalous situation in recent times. However, we have banks which have been saved from extinction by the taxpayer. These same taxpayers and mortgage holders are now subject to these unjustified variable rates and scaremongering from bankers. We have referred to them as taxpayers and mortgage holders but these are real people with families. There are more than 300,000 householders on standard variable mortgages. At least they have benefitted from the current low interest rate environment in Europe and yet we have seen no meaningful action being taken by the Government or Department of Finance in nearly six years.

Imagine the sheer frustration and anger of struggling parents who look on as their personal rate is rising while those of others around them have fallen steadily. They are forced to sit back as the single biggest outgoing for their family becomes more and more expensive and difficult to keep up with, which can lead to financial and mental problems. We speak here tonight on the first day of the new Government of the Thirty-second Dáil. We have a golden opportunity to make a real change that will affect real people and significantly improve their standard of living and that of their children.

This legislation requires the Central Bank to assess the state of the mortgage market. This is reason enough to support the legislation. The assessment would consider banks' costs of funds, reasonable profit expectations, concentration within the market, the ease at which borrowers can switch mortgages between lenders and the extent to which they are switching. There is no reason to oppose this aspect of the legislation. This assessment is clearly needed and urgent.

The legislation empowers the Central Bank with a range of tools to influence the standard variable rates being charged should the Central Bank conclude that market failure exists. We are often asked if the Central Bank actually wants these powers. This is nonsense. It is firmly the responsibility of the Oireachtas to decide what powers are granted to the Central Bank. The time for passing the buck is finished. It has gone on for too long. It is time to change.

The banking inquiry has clearly highlighted the need for all institutions, including the Central Bank, to be challenged on the power they have and how it is exercised. The mortgage market in Ireland has failed. Intervention is needed immediately. This Bill provides for meaningful change in a way that separates such intervention from political interference. The banks denied the existence of this problem when it was placed firmly in the public interest last year. Some banks had belatedly reduced their SVRs but we must do more. These banks are point-blank refusing to make even this most modest of concessions on the standard variable rates and they require a rude awakening. They continue to hide behind fixed rate offers as their flashy advertising campaigns portray the false claim of putting the customer first.

This is a measured, moderate Bill aimed at simply bringing some equity to the mortgage market while improving the lives of more than 300,000 families struggling today. We should allow it to go to Committee Stage for a thorough examination that will allow all sides of the House to have their say and influence this legislation. If those on the Government benches are not willing to support our efforts to address this scandal, I implore them to introduce legislation of their own that would help the people trapped in this vicious cycle.

I am delighted to get this opportunity to get my voice on the record on this issue for the second time. I am asking the Minister to take note of what we are saying because many people out there are suffering badly under these extreme interest rates that are being charged by some banks.

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