Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I have been raising an issue with the Minister for Finance, Deputy Michael Noonan, for quite some time now, seeking to get accurate information on the macro-prudential limits on mortgage lending that were introduced by the Central Bank on 9 February 2015. Obviously, the Minister of State, Deputy Eoghan Murphy, is aware that the Central Bank called for submissions last week with regard to the review it is carrying out on these limits, as well as submissions on the loan-to-value and loan-to-income limits that it introduced. I ask the Minister to facilitate the publication of the most important evidence there is of the working of these rules, which is the amount of leeway on loan-to-income and loan-to-value that the rules allow for that the banks are actually using. That is critical. Under the existing rules, 15% of qualifying loans can be dealt with as exemptions from the loan-to-value limit and 20% as exemptions from loan-to-income limit. What does this mean? It means, if one looks at AIB as an example, that AIB could have issued €400 million worth of mortgages in 2015 that did not comply with the loan-to-income rules. That is what 20% of their mortgage lending would have been. It would have been about €300 million if it was solely on loan-to-value.

What we need to know is whether this flexibility that is built into the rules is being used by the financial institutions and whether it is being completely used. They are sensible rules in my view and should be used to the maximum of their ability in terms of the exceptions that are there. In my view, it is those on lower incomes whom the rules narrowly disqualify, rather than a large number of bigger loans, who should be availing of these exceptions. Thanks to my persistence in seeking replies to parliamentary questions, we see that 11% of the qualifying loans issued by Permanent TSB in 2015 were under the loan-to-value exception, while the Central Bank rules allow for 15%. The Minister has refused to direct AIB to publish its figures. I cannot see why that is the case, because we need all of the information available. Both Permanent TSB and AIB should be publishing these figures in a way that is very easily digestible to the public and that can feed into the review by the wider public and by Members of this House in terms of the evidence-based review that the Central Bank has called for. As long as these figures are unpublished, there must be questions about whether the banks are simply using the rules or whether they are hiding behind the rules and the real problem is that they are simply not lending. We will not know that until we know that they are using the 20% exception on loan-to-income ratios and the 15% exception on loan-to-value ratios to the maximum ability and that they are using them for a large number of people on low incomes instead of for the bigger loans, which would use up a lot of the percentage base.

There can be no evidence-based submission without evidence. That is what goes to the core of this issue. We need to be empowered with regard to making an accurate submission. I do not see how I could make a submission not knowing if this exemption is being used or not. If the Central Bank does not want to be accused of running a sham exercise, it must work with the Department of Finance to release these figures. Following the Minister's refusal when I asked again that he direct AIB to release these figures, I wrote directly to the Central Bank and it provided an ambiguous reply saying that it had obligations under section 33AK and EU law, but it went on to suggest that it would publish the figures that I am calling for now so that we can feed into an evidence-based review. The Central Bank says it will publish the figures after the review and the submissions are concluded. I ask the Minister of State if he will facilitate me and anybody else who wishes to have an input into this important review by supplying a crucial part of the evidence, which is whether the banks are using the exceptions that are available to them.

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