Dáil debates

Tuesday, 28 May 2019

Vulture Funds: Motion [Private Members]

 

8:20 pm

Photo of Thomas PringleThomas Pringle (Donegal, Independent) | Oireachtas source

Vulture funds have fast become a normal feature in the economy since the Government came to power. Distressed mortgages are now regarded as a new commodity, bundled up in a new financial product to be offered as fresh pickings for vulture funds making their way through the economy at the invitation of the Government. Fine Gael continues to open up the market to include a wider net of homeowners vulnerable to vulture fund takeovers, which may be at the behest of the European Central Bank or the Irish Central Bank.

A new low has been reached. The Government and those with vested interests in the sector have been doing their best to make it out that vulture funds are a sign of a healthy functioning economy. So much spin has been spun that when the Central Bank's report on the credit servicing funds was published before Christmas, the Government and key players in the industry, including the Central Bank itself, used the report to speak positively about vulture funds and the contribution that they make. They made out that vulture funds were not only good for the economy but that they were in fact better than banks for those with distressed mortgages. We have heard in all of the contributions tonight how much they better are. Either banks in this country have reached a new low or spin has reached a new height. Either way, we are in sorry times if we are hearing that vulture funds are better than banks. Let us face it, the existence of vulture funds in our economy is a symptom of a complacent Government prioritising private sector interests over the interests of ordinary people in this country. It is also a symptom of a banking system collapse, a system that has failed to provide a service to its people. Banks, through incompetence and the prioritisation of a select few, have developed a situation where vulture funds could easily move in. The recession was used by the banks to transfer the responsibility of loans to another entity, one beyond the radar of Central Bank regulations. This was no doubt done on purpose because it suits the Government to shift the responsibility for financial hang-ups from the recession onto another entity. For that reason, those of us in opposition who have defended the rights of homeowners have consistently called for greater regulation of the credit financing firms.

I agree with the call of this Private Members' motion that the Government accept the conclusion reached by FLAC that there is a significant inequality of arms between the lender and the borrower in that the borrower may have no meaningful influence on the content of the terms of a loan and may be wholly unaware that the lender is reserving the right to sell the loan on to an entity of its choice. I also agree that the Central Bank of Ireland's report on the effectiveness of the code of conduct on mortgage arrears in the context of the sale of loans by regulated lenders, which was furnished to the Minister for Finance in February in 2018, should be given legislative force to ensure that all parts of the code are expressly admissible in repossession hearings. One has to wonder why this has not been done already. It must surely be to give the banks the leeway to do what they are doing.

The Government must recognise that so-called vulture funds pose an immediate and overwhelming threat to borrowers in rural and urban Ireland and it must accept that unregulated entities have demonstrated a clear unwillingness to abide by voluntary codes of conduct. We need to revise the code of conduct on mortgage arrears to ensure that provisions 38 and 39 mandatorily require lenders to provide solutions. Most important, we need to recognise housing as a right and as part of economic, social and cultural rights. In this way, the right to a home can be defended at this juncture and into the courts, if required. Currently, the banks have a greater right to homes than people. That is the crux of the problem and that is what has to change in our society. The issue of bailouts was mentioned earlier. The Portuguese respect the right to housing in their constitution and they also respect the economic, social and cultural rights of their citizens. For that reason, the troika could not attack homes in Portugal because they were constitutionally protected. We do not have that provision here. The troika attacked our homes and we are still living through the crisis.

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