Thomas Byrne (Meath East, Fianna Fail) | Oireachtas source

I am delighted to speak on the Bill and I commend my colleague, Deputy Michael McGrath, for his consistency and doggedness in bringing it forward. Not only is he reintroducing the legislation we brought forward last year - at which time it was voted down - he is also fulfilling the promise of the Minister who said that if the banks did not act, he would do so. As the Minister has failed to act, it is incumbent on us to do so and to stand up for those with mortgages. We stand up for home owners and say to the banks "Enough is enough".

With European interest rates at record lows, those on tracker mortgages have an historic and probably once-off opportunity during this period to deleverage and reduce their balances. Some people are in a position to afford to pay a little bit extra off the principal to prepare them for later on in the mortgage when interest rates may be higher. Those on variable interest rates which the banks can impose at will have no such opportunity and no such comfort that they may be doing something right for the future. What is happening in many cases is that they are being driven further into arrears because of high interest rates. That is wrong and it is damaging the economy. If interest rates can be reduced, by whatever means and whether through competition or the threat of action, it can only benefit the economy.

Many issues have been raised in respect of this matter. My colleagues have already dealt with the constitutional ones. The Minister for Children and Youth Affairs, Deputy Katherine Zappone, will remember from her time in the Seanad that every time the Government wanted legislation not to pass, constitutional reasons, usually of the vaguest type, were put forward. Yesterday, it was unprecedentedly the case that the Minister for Finance quoted the authority of an investment bank for a constitutional interpretation of legislation. It was extraordinary and unprecedented. Today, we have Davy Stockbrokers, which is well respected in its field, giving us all sorts of reasons the Bill should not be put forward. Davy is straight up and tells one its conflicts of interest. It acts as stockbroker to Bank of Ireland and Permanent TSB. There is no hiding it and the company is honest about it. However, we in Dáil Éireann have a duty to the general public and to society as a whole. While we certainly have a duty to the banks and the economy, we have a duty first and foremost to the people of Ireland. People with variable rate mortgages are being punished for what was, in many instances, the toss of a coin. The vast majority of people with mortgages may have started out on short-term fixed rate mortgages for a year or two and many, including me, would not have looked at the implications beyond two years. Some would have been given a tracker rate on the expiry of the fixed rate while others would have been given a variable rate. In many cases, it was simply the toss of a coin or random selection and people did not put too much thought into it. It is unfair that one section of society and one group of home owners are subsidising the banks.

Lest anyone thinks that this is rushed legislation or that we need to delay it, I note that the Bill was already before the House during the last Dáil. I worked with Deputy Michael McGrath on this and other mortgage issues. The Minister, Deputy Zappone, will remember some of those issues were brought before the last Seanad. Working out a model of how to do this without having the Minister for Finance in the position Ministers for Finance were in historically to adjust a rate, was very difficult. It was difficult to work out a model which would protect the competitiveness of the banking market and protect home owners. Deputy Michael McGrath has been working on this for at least four years and it has been difficult. What we have come up with is the idea that if the Central Bank deems there to have been a market failure and that there is no competition in the market or barriers to entry are interfering with its competitive potential, it must act. It is the Central Bank that will make the assessment and not any politician who will tell it to act. The Central Bank will make its own study as to whether there is a market failure and then it will act. Already, the legislation has had the effect in some quarters of pushing AIB in the right direction. It is necessary to push Bank of Ireland and others in the right direction. If there is competition in the market, this legislation will not apply. However, this is a failed and non-functioning market and no one wants to know about it except the ones who are ripping off the people and will continue to do so unless the Bill is passed.

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