Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move: "That the Bill be now read a Second Time."

I am proud to move this Bill and hope it can get cross-party support in this Chamber. I must say there is no reason for that cross-party support not to be given, because it simply implements what Deputy Michael Noonan said was best practice during his time as Minister for Finance and what the Central Bank’s own code of practice recommends.

In simple terms, the Bill puts into law a code of practice that the Central Bank itself drew up. The first line of that code of practice provides: "A loan secured by the mortgage of residential property may not be transferred without the written consent of the borrower". In other words, no consent, no sale. There may be some who say that this is a fine principle in normal times but we are not living in normal times, and they are right. These are not normal times. In normal times we do not have €2.34 billion in arrears of over 720 days. In normal times we do not have 64,510 accounts linked to family homes in arrears, 45,178 of them in arrears of more than 90 days. Accounts in arrears of more than two years now constitute 43% of accounts in arrears, and at €2.4 billion, represent 90% of outstanding arrears balances.

These are not normal times. We are living with a problem caused by a banking collapse. We need a political and societal response to that, not just one that protects the banks. We must find a solution that looks after the families in arrears and indeed the tenants whose landlords find themselves in arrears. For my party, vultures are no part of that solution. They are profiteering out of misery and should be shown the door. Fine Gael rolled out the red carpet and we must now live with the consequences. The Pontius Pilate act played by the Minister for Finance, Deputy Donohoe, as State-owned banks sell mortgages that are paying their way is despicable. On 29 November last year Permanent TSB announced it was selling 6,139 loans linked to family homes. This is not the first time family home loans were sold by this bank or other banks, including the State itself through the Irish Banking Resolution Corporation, IBRC, to vulture funds. What made this a new low was that the mortgages involved were those of families meeting their agreed arrangements with the bank. No sale to vultures is right but this sale was particularly offensive. It is time for action. It is time to say, "Enough is enough".

I will give Members a quick run-through of the provisions of the Bill. Section 1 contains interpretations of the sections. Section 2 is the crucial section. It introduces an obligation on a lender to seek permission from the borrower before a loan is sold when it relates to a residential property. Section 3 legislates for cases where the original lender will service the mortgage as an agent of the transferee. The lender shall confirm that the transferee’s policy on the handling of arrears and in the setting of mortgage interest rates will be the same as that of the original lender, and that the original lender will handle arrears as its agent.

Section 4 sets down the conditions where the original lender is surrendering control over interest rates and arrears policy. This will require the explicit consent of the borrower. Section 5 lists the information that must be transmitted to the borrower on foot of a request for consent under section 2 of this Bill. It may be the case that some of these points are already covered by the Consumer Credit Act 1995. This is something we can tease out on Committee Stage.

Section 6 sets out the rights of the borrower and the duties of the transferee in the case of a transfer. Section 7 is important. It lays out some very specific exemptions to section 2, which requires consent, such as when a bank is failing. The term "serious business difficulties" is defined as, "difficulties of a gravity that the Central Bank determines that a lender is failing or likely to fail". There are no wide exceptions in this legislation. This is a tight definition based on the triggers that would precipitate the resolution process in EU law.

Section 8 sets out powers for the Central Bank. Section 9 confirms that a lender in breach of this legislation is liable to the administration regime of the Central Bank. We can discuss how adequate that regime is, but for now the important fact is that there are repercussions for ignoring this law, unlike the code from which it derives. Section 10 allows the Central Bank to draw up implementing regulations while section 11 of this legislation is the title of the legislation.

It is clear that this Bill is in no way a get-out-of-jail-free card for borrowers. In no way does it mean a borrower can simply not pay and expect to stay in his or her home. That spin comes from desperate Government Deputies trying to divide their own constituents rather than stand up to the vultures. We must always draw ourselves back to the question of context. How did we get here? Did tens of thousands of previously unblemished families suddenly lose the will to pay their mortgages in full? Of course not. That is not what happened and we all know it. The cruel irony is that the banking collapse directly led to the loss of jobs and of businesses which in turn lead to hundreds of thousands falling into arrears. Ten years after the banking collapse, these same banks are now turning on those families unfortunate enough to have suffered during that time and are throwing them to the vultures. This is a vicious circle and its victims are hardworking families and individuals doing their best to recover after the banks crashed the economy.

Anybody with a sense of justice or fairness must see these vulture sales as completely unacceptable. The Government will surely say this Bill will end the market for vultures in this State. I hope so. I have no problem saying that. I do not want a vulture economy and neither does my party. Why not? It is because it is unfair for capital to swoop on distressed families, businesses and farms and pick off what it can before abandoning them. Vultures are interested in the short term. They see short-term profit and they swoop. That is not healthy for our economy or for society. An economy where vultures are prospering, often paying little tax if any, is not a healthy economy. It is the type of economy Sinn Féin wants to end. I am on the side of the struggling farmer, the struggling homeowner and the small businessman and businesswoman, not on the side of the vultures.

In contrast, let us look at how the banks are treated. These banks, which are being allowed to sell family homes to vultures, do not pay a penny of tax on billions of euro in profits and will not pay for a decade or two decades in some cases. They are subsidised by the help-to-buy initiative, they are allowed to charge rip-off interest rates, they reduce services in rural Ireland bit by bit and, to deal with the question before us, they are allowed sell off their loans without the consent of the borrower, in breach of the code of practice of the Central Bank, albeit that is a voluntary code. Why? The bailout is supposed to be over. These banks are profitable, so why is the Government policy about protecting them at all costs? Why are they not doing their job and making arrangements with customers who have paid them for years or decades while the banks ripped people off and stole their tracker mortgages? The European Central Bank, ECB, and the Central Bank have made it abundantly clear that there are many options available to banks to reduce their non-performing loans. However, this State has championed the cause of the vultures despite the damage and the pure economic short-sightedness of it.

I note the reported comments of the Central Bank today saying this Bill would bring about some type of Armageddon for everybody involved. Its spokespeople are implying that implementing a code the Central Bank itself drafted in 1991, a code that still applies, would lead to instability, increased prices and less lending. We have all heard this song before. Whenever a positive proposal is put forward to protect consumers from the banks or vultures it is the same tune. It is not credible and it cannot be used as an excuse to stall progress. This legislation is nearly word for word what the Central Bank code provides. That is a code that still exists, by which the Central Bank says that lenders need the consent of a borrower before a mortgage is sold. The Central Bank is taking a disgraceful position if the reports are true. There will be no Armageddon. We will see a healthier banking culture.

I should not need to remind anybody that the Central Bank is supposed to hold a mandate to protect consumers in financial matters.

How is its position in opposing this Bill compatible with that mandate? A central bank drawing up a code of practice criticising directly democratically elected Deputies who try to implement that very same code is a crazy situation. It is time to end the fixation with vulture funds and put people first.

This legislation is very simple. As stated in the code of practice, the Central Bank's own code, "A loan secured by the mortgage of residential property may not be transferred without the written consent of the borrower." That is where Sinn Féin stands, and proudly so. I look forward to hearing where others stand. We are saying let us all join together and say very clearly, "No consent, no sale".

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