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

This debate is an opportunity for the Department of Finance and the Government to reimagine their role in the context of banking in Ireland in the future. It is also an opportunity for us to set out a policy that will attract the type of banking being demanded now by the general public and, indeed, by the banking system itself.

To bring change to fruition, we need to look back over the legacy issues that remain in the banks at present. Bank of Ireland and AIB are the main banks to be considered in this regard and both still have legacy debt. We were told this week by AIB that it has reduced its bad debt in terms of mortgages and loans down to €4 billion or less. The bank has focused very aggressively on the reduction of its exposure to bad loans. It has used vulture funds, as others have done, to sell off those mortgages and correct its balance sheet.

There are other issues remaining to be dealt with that tell us much about the banking system. For example, there is the EBS tied agents issue, which was before the High Court and which witnesses from AIB addressed at a meeting of the finance committee yesterday. In 2019, the judge in that case suggested to AIB that it should use mediation as a commonsense way to approach this problem, in which two parties have differing opinions. At the finance committee meeting yesterday, the AIB representatives refused to answer the question as to whether the bank will go into mediation. A significant number of the EBS tied agents appeared in the Public Gallery at a previous meeting of the committee and some of them have since died. How long more must they wait for the resolution of a problem that a judge has said could be resolved through mediation? This issue shows AIB at its worst. It shows it protecting the system, ignoring those who have been offended in one way or another and simply trampling on any possibility of a commonsense resolution.

The other issue facing the banks is the proposed forum on banking. In fact, it is an issue facing the Irish people rather than the banks. This was discussed recently at a meeting of the Fianna Fáil Parliamentary Party, where I put forward put a motion, influenced by a similar motion that came through the finance committee, calling for a forum of all stakeholders, including the fintech companies and workers, to discuss what the banking landscape should and might look like in the future, if Government policy were to accommodate it. The motion set out the reasons for holding such a forum. It mainly stemmed from the issue that arose when Ulster Bank told its customers at the very last minute about its proposals and showed complete disregard and disrespect for its employees. Representatives of the Financial Services Union came to the Fianna Fáil Parliamentary Party and made their case for a forum, out of which our motion arose. My party colleagues were amused that the Taoiseach supported the motion, because I presume it was my motion, but he did. Therefore, we should be discussing in this House establishing the forum and wasting no time in bringing together all the stakeholders to discuss what might happen in the future.

I mentioned the legacy issue but I omitted to mention Mr. Tony Lawlor, who came before the finance committee as a witness and spilled out his whole life history in the context of his engagement with Bank of Ireland and the courts. That is part of the tracker mortgage issue and it is still not resolved. How many more such cases are still to be resolved by the banks, which are dragging their heels and dragging individuals - citizens we represent - through the courts and through a life of misery just because they can? That must be stopped. I call on the Minister for Finance, who has a significant shareholding in AIB and Bank of Ireland, to intervene in the tied agents case and bring about a resolution. I call on him to intervene in tracker mortgage cases such as that of Mr. Lawlor and bring about a resolution. Then, proactively as a modern Department of Finance should, it should bring together all the stakeholders and let us have the debate through that forum and on the floor of this House on an ongoing basis. Doing so will not harm the banks. It is supporting the notion that we want better banking.

We want citizens' banking and community banking. Through the forum, we want to find a resolution to all of those questions. Reference is regularly made to community banking. In fact, members of the finance committee, including the Minister for Public Expenditure and Reform, Deputy Michael McGrath, visited such a bank in Germany and were impressed by the fact that the profits the bank makes in the regions it represents go back to the community. That is the type of banking that is being sought.

With Provident gone out of the market, we need the credit unions and community banking to take up the slack created by its departure because people with no money and poor means need to get loans from time to time and they should not have to turn to moneylenders to do so. We need to stop that practice just as much as we need, on the other end of the greed scale, to stop vulture funds from doing what they are doing with regard to those who owe money. Likewise, there is an opportunity for the forum to discuss the role of receivers and the use of receivers and what has happened in the past ten years from which we can learn, such as the fact that those very same receivers, who are not regulated, were used by the banks and blackguarded customers across the country.

Let us consider the Central Bank Bill the Minister says he is bringing forward. Is it not about time to recognise all that is being said in this House about credit unions and all of the support given to them by the Minister of State, Deputy Fleming, and to make a special case for them to be included in a regulatory framework other than that in place in respect of banks? They deserve to be given a lighter framework with lesser bureaucracy and a greater opportunity to participate in their local community by giving loans, by understanding the demand from the community and their customers and being able to respond to that. Is it not time for the Central Bank, under the Bill the Minister is bringing forward, to change its customer representation? It is not just a regulator of the banks; it is also supposed to be a protector of the consumer. That is not happening and we need to understand that.

I believe the forum can achieve balance in terms of the arguments on any of these issues and reach a sensible conclusion based on the new developments in banking that will satisfy the citizens we represent. However, we can no longer leave the banks to imagine their own banking landscape for the future or to devise their own structure for the future. We have seen what they have done to this country and its citizens in the past. I do not want them to have the upper hand again in terms of how they might treat their customers should anything happen to the banking models for the future. We need protections for people as much as they are needed for the banking structure and we need the same protections built around a community banking structure.

It is true to say that community banking organisations such as Sparkasse or Kiwibank are almost the same as the credit union system, so that Central Bank legislation should open up possibilities for credit unions. It should also offer greater protection to risk managers within banks or financial institutions in order that we never again have a case such as that of Jonathan Sugarman, a man whose life was destroyed just because he came forward in accordance with legislation and made a case to the Central Bank. Now, rather than the offending bank being in difficulty, the employee is in difficulty. He has not been employed since Banca d'Italia left the country or he had to resign because of ongoing issues with the bank.

There are many areas that we need to cover and I hope these statements on the future of banking are simply a first step. I urge the Minister to take the next step and bring about reform.

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