John McGuinness (Carlow-Kilkenny, Fianna Fail) | Oireachtas source

I welcome the Bill and commend Deputy Michael McGrath on bringing it to this stage. We had a very worthwhile debate on Committee Stage about all of the issues pertaining to the regulation of vulture funds. The provisions of the Bill will only take effect from the date of enactment but we must recognise the fact that a considerable number of loans have already been transferred to vulture funds. The vulture funds have refused to meet the individuals and businesses concerned to reach a settlement on their loans and they continue to avoid transparency vis-à-vis the Oireachtas Committee on Finance, Public Expenditure and Reform. The funds will not come before committees of this House. They are barely replying to invitations to come before the finance committee to discuss their intentions in this country and the negative impact they are having on Irish society.

I would like to see as part of the expectation of Government with regard to these vulture funds that they would come here and explain their case and set out their plans for these loans for the coming years. To date, all of the evidence suggests that vulture funds have no interest in settlements. They refuse to talk about settlements or to engage with their customers. They pay scant regard to any protocol that is in place in terms of facilitating customers who are trying to renegotiate or settle. The banks have to be held to account because of the fact that they have encouraged customers with distressed mortgages or loans to restructure them. In most of those cases, one will find a clause in the contract saying that the restructuring will be reviewed in three or six months. Within the three or six month period, the banks then offload those loans to vulture funds, and once they do that, the funds can do what they like with loan. Once the grace period of three or six months expires, the vulture funds can introduce new interest rates, new conditions and so on and they do not seem to care. There is nothing to regulate them. If this Bill regulates the vulture funds to the extent that the banks are regulated, it will represent a very positive step forward. If we can bring the vulture funds before the committees of this House, as we should be able to do, that will also be a step forward, as will be getting them to agree to engage with their customers, current and future.

In reality, we should stop the transfer of distressed loans to vulture funds. We should insist that the banks take each individual case and work out a solution for that business, individual or family. The European Central Bank, Mr. Mario Draghi, and the Central Bank in Ireland have all said that they are not forcing the banks here to sell loans to vulture funds. Indeed, Mr. Draghi said that this is a social policy issue. He said that we should address the consequences of distressed mortgages with some form of social policy. Organisations such as David Hall's iCare should be supported by the Government. The banks have given a sample portfolio of loans to Mr. Hall's organisation and he has proved that those who are caught in the middle, that is, those who are earning too much to qualify for local authority housing, can be put on a sustainable mortgage or a differential rent to allow them to stay in their home. That should be pursued by Government. There should be a social element to the policy of restructuring mortgages and keeping people in their homes. If the Government was to pursue that policy, it would not have to regulate the vulture funds to the extent envisaged in this Bill. The European Union would prefer that vulture funds were not regulated because they are essential in a market that finds itself in the type of distress and collapse that the Irish market experienced.

There is a fundamental contradiction here and I am happy that the Government is supporting Deputy McGrath's Bill and has a timeframe for its implementation. However, I would encourage the Government to go further with this and to introduce its own legislation if necessary. I introduced the Affordable Housing and Fair Mortgage Bill previously, elements of which could be implemented by Government. I encourage the Department to look at that Bill again to see if we can prevent the sale of distressed mortgages to vulture funds. We should provide for the sale of such loans to voluntary housing agencies or housing co-operatives that could restructure them and possibly put people on a differential rent.

The main problem with all of this is the fact that the current crop of young bankers are seeing a very sharp side to banking through these vulture funds. The funds have no desire to comply with the rules and their aim is to make money at all costs. We will have the job of re-educating bankers in the new lending culture that will be necessary in banks in the future. We have already had a report on that.

I encourage the Minister to look at this issue in the round. He should accept this legislation, pass it and then go back to the Department and work out what will be done for the future. AIB is lining up, as is Permanent TSB and no doubt Bank of Ireland and others will follow. There are many thousands of people who are in mortgage distress and we could do so much for them. I have often seen cases in court of families defending themselves, trying to keep a roof over their heads. They are up against a plethora of bankers, solicitors and barristers. We are damaging families and damaging the family unit, with children watching their parents trying to fight for their family home with no support from anyone.

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