Catherine Murphy (Kildare North, Social Democrats) | Oireachtas source

This issue has really struck a chord with people. It is not that people are whipping up any kind of a reaction; members of the public are absolutely outraged to the point that they will single one out and tell one just how angry they are and I am sure the Minister is hearing it himself. The reaction is visceral. Essentially, what they see is the banks that were saved continuing to save themselves at any price and they see a bank that is 75% State owned throwing people to the wolves. Permanent TSB underperformed hugely in terms of working out solutions for some of the distressed loans on its books. It is not clear what exactly the bank is now bundling and we require more information in that regard.

I am meeting people who are very worried at the moment. I have had people come to my constituency office who have acted as guarantors for their children whose loans are in this bundle. They have reached an agreement with the bank that is due for review and they are very worried about what will happen next. These are real people who are making an honest effort. The Taoiseach said that he was concerned about the people who were making an honest effort but a lot of such people's loans are in this bundle of what are described as non-performing loans. The reality is that many of these mortgages have been restructured and a huge number of the people involved are keeping up with the commitments they made. They should be allowed to continue to do that but if their loans are sold on, that will not necessarily be the case. We know that reviews happen every three years. The bank appeared before the Oireachtas committee on finance and said as much. Essentially, it is at the time of a review that people are very exposed.

I remember the answer we got when IBRC offered its loan book for sale. We were told then that the Government did not know who was going to buy the loans and we are hearing the exact same thing now. However, if the loans are being bundled to the extent to which Permanent TSB is bundling them, it is quite obvious who will buy them. We need to define non-performing loans and we need information on that. That is absolutely critical because these funds are not compelled to offer the same suite of solutions as that being offered by the mainstream banks such as mortgage-to-rent, split mortgages and so on. The same rules do not apply.

IBRC acquired mortgages at a massive discount, amounting to almost 60% but these funds can go after people for the full amount. We hear a lot of talk about moral hazard but it is interesting to note that moral hazard was never referred to by Permanent TSB in the context of commercial loan write-offs. Its attitude is very different for mortgages for homeowners. We know that the Mortgage Arrears Resolution Process or MARP is a code of conduct for mortgage arrears but we also know from the High Court it is voluntary. Essentially, it is not the case that other entities are required to offer the same measures as are required to be offered by the banks. An article inwww.independent.ie, with the headline, "US vulture funds clean up as Nama sells out", quotes the CEO and co-founder of Blackstone, Mr. Steve Schwarzman, thus: " We're basically waiting to see how beaten up people's psyches get and where they're willing to sell assets". His fund is waiting until people are really crushed. That is what he said although he was not talking just about Ireland but was speaking in a wider context.

This will not be without consequences if a sizeable number of people end up losing their homes. There will be also consequences for those who are living in buy-to-let properties because tenants are very exposed in that kind of situation. It is not just the people who have mortgages who may be affected but also those who are living in buy-to-let properties. We all know there is a housing crisis and where are such people to find alternative accommodation? It is also not an inconsiderable issue as far as the State is concerned if people lose their homes, go on the housing list and require a housing assistance payment. In 2017, the HAP scheme cost €152 million. That sum is growing and HAP is unsustainable over a protracted period of time as a housing solution. This all has a cost but at the same time, the bank will be able to record this as a loss and write off that loss against future tax liabilities. It is not too long ago that we read newspaper articles which detailed the fact that a certain bank is unlikely to have to pay tax for the next 20 years. We need to stop this silo-based approach to looking at this issue. We need to take a more rounded approach. There are measures listed in the programme for Government that could help in this context. Why is the Government not producing its own programme for this?

In terms of the Bill itself, it does not go far enough. Perhaps a combination of this and the Bill sponsored by Deputy McGuinness might be more effective. The critical issue with regard to the silo-based approach is that people get it; they understand that this is about their next door neighbour, someone who lives down the road or a family member. They know the consequences for them. There are people who are very concerned about this who are not and will not be directly affected. There is something more going on here in that regard and I would urge the Minister to pay attention to it.

I know the Minister claims he cannot intervene in commercial decisions, but the reality is that there was an intervention made by the State to make sure these banks survived. They have survived for what? What is the point of them surviving when they will do this and cause absolute misery to people. They underperformed in terms of restructuring the mortgages. I urge the Minister to insist on the information being provided in respect of what mortgages have been restructured and are performing and, critically, also in respect of the buy-to-lets. I urge him to consider just how exposed people are and how precarious their situation will be if they end up being evicted from their homes because they are being sold because there is greater value in selling them than keeping them. These funds are not here to stay. They are here to buy assets, flip them, make as much as they can and get out. This is something that will be regretted and rightly so. The public is right on this.

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