Tommy Broughan (Dublin Bay North, Independent) | Oireachtas source

I am delighted to have a chance to comment on this motion on the report on engagement with investment funds. I commend the joint committee and its Chairman on bringing this matter to the attention of the House and for publishing this short and very important report on how we, as representatives of the people, are treated.

Over the last month or two we have probably all met many constituents who were absolutely stunned to find that their mortgages had been transferred from Permanent TSB to a vulture fund, a non-bank entity. The Minister of State has probably met them himself in east Cork. People are in incredible distress over what will happen in the future or if they have any history of being out of work or getting into difficulty with mortgages. That is the reality. Looking at the report, the statistical release of the Central Bank on 7 September confirms the very good reasons for such anxieties. The banks are responsible for 72% of mortgages on principal dwelling homes in arrears for more than 720 days. It should have been their core role as pillar banks to work out those arrears with the mortgage-holders. Unregulated entities own 18% of those loans. Non-bank entities own a further 10%. Moreover, banks own 75% of principal home mortgages in arrears for more than 90 days. Again, 13% are owned by unregulated entities and 12% by non-bank entities.

Under the leadership of the Chairman of the joint committee, many of our fellow citizens are expecting us to take urgent steps about this. The Minister of State, Deputy D'Arcy, says it is regrettable these companies did not come before the committee. I am a former member of that committee. It is not regrettable, it is totally unacceptable. It is an insult to this House and to the people who sent us here that Deputy McGuinness and his colleagues should not be able to hold these companies to account. If there is a need for legislation, let us legislate. We stayed up all night two or three times in this Dáil and the last one to bring in terrible austerity measures. Why is there not the same sense of urgency in this regard?

I know the Minister of State is probably busy. When he was here, he said that compellability powers are already available to Oireachtas committees in certain circumstances under the Houses of the Oireachtas (Inquiries, Privileges and Procedures) Act 2013. He then went on to say we should avoid debating that today. An amendment about compellability was proposed to give the Dáil and our colleagues on the Committee on Public Accounts, that most constitutionally important committee in this House which looks into State spending, powers of compellability. That was brought in by the Minister of State's austerity Government. It was around the same time that it wanted to abolish Seanad Éireann.

The austerity Government made no attempt to convince the public of the utter necessity of compellability powers, as is apparent in this matter. I therefore strongly agree with the conclusion in section 13 of the report in which the committee states that the legal lacuna concerning the Central Bank and vulture funds must be plugged. We have to bring in legislation in this regard. It represents a gap in the current legislative framework. Section 16 rightly concurs with the Governor of the Central Bank, Professor Philip Lane, holding that vulture funds have a social responsibility to be accountable to Parliament.

That being the case, we should not even have to have this debate. More than 18,000 Irish mortgage holders are customers of this unregulated fund, with a value of almost €4 billion. There is no question that such a large body of our fellow citizens expect us to be able to regulate one of the most important areas of their lives, namely, the mortgages on their homes.

The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 provides for how credit servicing firms are regulated and it is worth noting, as outlined in section 3, that people whose loans are sold from credit servicing firms to unregulated entities "maintain the regulatory protections they had prior to the sale, including the protections provided by the Central Bank's statutory Codes of Conduct" and the code of conduct for mortgage arrears. We saw earlier this summer, the great distress and worry caused by the Project Glas sale. This was a portfolio of approximately 10,700 properties. In reply to a parliamentary question on 7 of September, the Minister told me he expected the Central Bank's report on its review of the code of conduct for mortgage arrears by the end of this month. Is this still on schedule? Will we see the review? The Minister of State might come back to this.

The reply to another parliamentary question on the same date informed me the Minister and his officials had met the chair of the supervisory board of the ECB and had discussed the treatment of split mortgages as non-performing loans and requested that they would be recategorised. It is a sad indictment of lack of autonomy that the European banking authority gave a strict Europe-wide definition of non-performing loans which means that certain restructures are deemed to be non-performing loans even if customers are meeting the revised payment schedule.We have all been contacted by many upset customers who feel great anxiety and distress at this time.

I agree with the many constituents who strongly assert that the securitisation of loans on principal family homes should be abolished and forbidden in law by this House. As Judy Garland said in "The Wizard of Oz", and which is featuring in an advertisement at present, there is no place like home. Earlier, the Chairman of the joint committee referred to the idea of somebody's contract to pay back the debt on the family home being sold, interfered with it and transferred to a non-Irish-based company as totally outrageous. It is something we need to address. The securitisation and financialisation of key elements of the lives of citizens and families has been one of the most disgraceful practices of Thatcherism and globalisation since the 1980s. As the economist Mariana Mazucatto notes in her famous books, The Entrepreneurial Stateand The Value of Everything, increasingly over the past 40 years, national governments withdrew from necessary regulatory functions, often in industries the states themselves had established and in which they had a primary interest. One of our primary interests is to ensure every Irish family and citizen has a home. We had an emotional debate about this on Tuesday evening and we will have another one next Wednesday. Everybody wants to deal with the desperate housing and homelessness situation we have. It is incredible that the securitisation of family homes is permitted. This is a huge lacuna.

Families who are devastated by the recent decision of Permanent TSB to offload many of their home loans, with some fearful of becoming homeless, are looking to this House to remedy the situation urgently with regard to vulture funds. The finance committee has made a reasonable request to us that we should not engage with these funds until legislation is passed that will make them subject to our regulation and the regulation of the people whom we represent. The Governor of the Central Bank, Philip Lane, also has a grave responsibility in this regard. The Chairman of the finance committee has tried to advance the situation whereby we can protect and keep people in their own homes. The Governor refused to intervene in the recent Project Glas sale and in other sales to vulture funds in recent years. Restoring those in the pillar banks to their pre-crash salaries and restoring other excesses, to which the Chairman of the finance committee has referred, seems to be the key driving force in the Central Bank's administration of our financial system. It was we who restored those pillar banks and, therefore, it is we, on behalf of our people, who have the right to call the tune.

Colleagues have referred to the Fine Gael austerity Governments, led economically by Deputy Michael Noonan, which have embedded the current appalling securitisation culture in our mortgage market. I hope the forthcoming general election will end this era of non-accountability and shocking cavalier treatment of householders and mortgage payers and make all bank and non-bank entities subject to the regulation of the House and its finance committee.

See this speech in context