John Browne (Wexford, Fianna Fail)
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I thank the Ceann Comhairle and Leas-Cheann Comhairle for allowing Deputy Mattie McGrath and me to raise this issue. Last weekend, a situation arose whereby Friends First Finance, based in Dublin, sent boot boys down to a farmer in north County Wexford to repossess a tractor. These guys were armed with anything they could have in their van. On their arrival, the farmer resisted the actions to take the tractor and as a result, both he and his son were attacked with jackboot tactics. They were battered, received belts on their arms, legs and bodies and were in severe pain.

The point Deputy McGrath and I wish to raise tonight is that banks should not be allowed to operate in this manner. They have a code of conduct laid down by the Central Bank, which requires firms to have in place procedures for the handling of arrears cases to give the borrower a reasonable time in which to solve the arrears problem and to endeavour to agree an approach to assist the borrower to solve the arrears problem. The section was revised recently and now contains more detailed requirements and the revised requirements have been effective since 1 January 2012. In some instances, a person who is dissatisfied with his or her treatment by a hire purchase company can make a complaint to the Financial Services Ombudsman.

Obviously, however, both in this case and many other cases nationwide, banks now are taking the law into their own hands. They are operating in the dead of night and the people to whom I referred earlier arrived in the early morning when it was dark and tried to take the tractor from the local farmer. Of course the farmer, his son, the family and their neighbours resisted the attempt and there certainly was no talking to the people who arrived. They attacked the farmer straight away and attacked his son. They created mayhem in that part of north County Wexford.

During the week, a number of meetings took place between Friends First and the local action committee, at which Deputy Mattie McGrath was present at different times. An agreement was reached with the managing director of Friends First that no further action would be taken until such time as the Garda completes its investigations. However, it is important that such banks operate within the law and under the code of conduct as laid down by the Central Bank, but they certainly are not doing this at present.

Mattie McGrath (Tipperary South, Independent)
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I thank the Leas-Cheann Comhairle and Ceann Comhairle, as well as the Minister of States for his attendance. This is the most grave topic I have ever encountered. I spoke on this issue 13 months ago and was assured by the Minister then in the Chamber, who is not the same Minister as this evening, that there was a code of conduct for these banks. While the code of conduct was renewed and upgraded, it is not worth the paper on which it is written because one has these bankers and thugs on the ground to whom Deputy Browne referred. While I will not name those people, I will name the people in the banks in suits, that is, those who direct such activities. They are like a third force that is similar to a militia about which one might read in foreign lands. We have An Garda Síochána here with a proud record and our Army. They are the only agents we respect and to whom we look up. I want all these people taken off the road. I want to ask Mr. David Taylor, managing director of Friends First-----

Michael Kitt (Galway East, Fianna Fail)
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Sorry Deputy, you are not-----

Mattie McGrath (Tipperary South, Independent)
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-----and Mr. Gordon Hill, recoveries manager-----

Michael Kitt (Galway East, Fianna Fail)
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Deputy, sorry.

Mattie McGrath (Tipperary South, Independent)
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-----and Ms Rachel Ellis. No, I am going to name them because they need to be named and outed.

Michael Kitt (Galway East, Fianna Fail)
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No, Deputy, sorry.

Mattie McGrath (Tipperary South, Independent)
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I met these people during the week and I wish to state that I am grateful to the staff at Friends First who met us, looked after us and were very kind to us, but not these people, who would not give us a cup of tea for the 13 hours I was there or the 24 hours for which the other remained. I thank Mr. Tim O'Brien, chairman of the Association of Farm Contractors in Ireland, Mr. Sam Deacon and the two neighbours who accompanied us there, namely, Mr. Peter Doyle and Mr. Alymer Dalton, as well as the many other farmers and subcontractors who went to Friends First to show their anger, annoyance and hurt. This behaviour cannot be accepted. This is modern Ireland and is a democracy. We are putting billions into the banks and while this particular bank is not one of the banks under the State guarantee, it is a banking institution. I also calling on Mr. Pat Farrell, chairman of the Irish Banking Federation, to deal with these people. I am putting them on notice that unless this matter is dealt with within seven days and unless such activities cease and desist, it will be necessary to take other actions, because the people of counties Tipperary and Wexford are proud people with a proud history. Are we going to have such people like the Peep o' Day Boys or the Black and Tans, who we resisted? These people broke into the farm. They had equipment in their car that was like what one would need to get into the Central Bank.

Michael Kitt (Galway East, Fianna Fail)
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Sorry, Deputy.

Mattie McGrath (Tipperary South, Independent)
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They had no identification, no security tags and are not Garda-checked. Moreover, the Garda Síochána are not prepared to deal with them and are unable to so do. I am not attacking the gardaí as they do not understand the code of practice. These activities must be outed. Our people are struggling in the face of another austerity budget this week and yet these thugs are being sent out by men in suits who are directing these terrorist-like operations.

Michael Kitt (Galway East, Fianna Fail)
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Thank you, Deputy.

Mattie McGrath (Tipperary South, Independent)
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I wish to finish.

Michael Kitt (Galway East, Fianna Fail)
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Please, no more references to-----

Mattie McGrath (Tipperary South, Independent)
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Obviously, we were told that it is a salvage company.

Michael Kitt (Galway East, Fianna Fail)
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Deputy, people should not be named.

Mattie McGrath (Tipperary South, Independent)
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No, one is told this was done by a salvage company based in Northern Ireland but it was militia-style. The company is called Salvage Direct and when one checks them on Google, one is told it has limousines for hire but this is what they are up to. Our people, including an ordinary decent young boy of 16 who is studying for his leaving certificate, should not be subjected to such beatings. Were it not for the ambulance and fire brigade people who attended the scene, they could have been left dead on the road. I am worried that someone will be killed unless this kind of militia or third force is stood down and dealt with by the powers that be.

John Perry (Sligo-North Leitrim, Fine Gael)
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I thank Deputies Browne and Mattie McGrath for raising this issue. All of the financial institutions in Ireland have benefitted from the support provided by the Irish taxpayer. Even if they have not been directly recapitalised, they benefit from the stability that Government guarantees and recapitalisation have provided to the Irish financial system. In return, the Irish taxpayer has a legitimate expectation of being treated in a fair and equitable manner by the financial institutions. This legitimate expectation is underpinned by the code of conduct for business lending to small and medium enterprises, SMEs, that ensures banks live up to their obligations in dealing specifically with SMEs.

The code of conduct was issued by the Central Bank under section 117 of the Central Bank Act 1989 and became effective from 1 January this year. The code of conduct is part of a suite of measures that the Government has undertaken to support the vital SME sector. The Government's commitment to the sector was underlined by the measures announced in yesterday's budget, which included a ten-point tax reform plan to help small businesses, increased resources for the Credit Review Office and the development of a suite of investment funds in the SME sector by the National Pensions Reserve Fund Commission. It is gratifying that these measures were welcomed by the business representative organisations.

The code of conduct replaced the 2009 code and strengthened the protections available to SMEs in financial difficulties. The banks are required to comply with it as a matter of law. The code makes it clear that anybody acting for a bank is subject to the code and banks cannot avoid their obligations by getting an agent to act on their behalf. The Central Bank can invoke its statutory powers to require compliance with the code and a breach of the code is a breach of a regulatory requirement and may be the subject of enforcement action. The code imposes a number of requirements on security, including that the bank must not impose unreasonable collateral requirements, it must not impose unreasonable personal guarantee requirements on borrowers and it must explain clearly the possible implications for the guarantor of giving collateral or a personal guarantee. Any enforcement of a personal guarantee over a principal private residence must be in accordance with the code of conduct on mortgage arrears.

I should say that the provisions of the code are without prejudice to a bank's legal rights to enforce any agreement, including any security taken in connection with any agreement. If a borrower has pledged security to a bank as part of a loan agreement and has failed to make the repayments, the bank has the right to take the security. I am aware of media reports of an incident in Wexford in which it is alleged that the agents of the bank broke the law in attempting repossession of a vehicle. I understand that the Garda Síochána is investigating the incident. If any breach of the law is revealed in the investigation, I would fully expect the Director of Public Prosecutions to prosecute those involved.

The Central Bank has a number of options at its disposal if there was a breach of the code of conduct. The matter has been brought to the attention of the bank and I expect it will examine the case in detail. That said, the Central Bank is a separate entity from the Department of Finance and operates independently from the Department. The code of conduct is due for a full review next year and any gaps in the code will be fully addressed in that review. I wish to make it absolutely clear that I do not condone any actions in breach of the law and I call on the parties to this dispute to make every effort to resolve it in a mutually acceptable manner.

John Browne (Wexford, Fianna Fail)
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I am not questioning a bank's legal right to enforce any agreement but it must operate within the law. The banks and financial institutions must realise that we now operate in a civilised State. We suggest that representatives of these institutions should only go to premises during working hours and there should be no early morning raids or movement in the dead of night, which is happening now. There should be no "rough house" tactics, violence or any other form of intimidation against the persons or families involved.

This issue was raised last December by Mr. Seán Kelly, MEP, a member of the Minister of State's party, in Strasbourg. He referred to farmyard raids in isolated areas in the dead of night, when enforcers were frightening the living daylights out of people, ignoring all protocol, threatening people and doing enormous damage while using foul language and physicality. It is not just us who have raised the matter, which has been ongoing for some time.

Every visit by representatives of banks to people being acted against should have a Garda presence. If there is a Garda presence, these people would not be able to operate outside the law and the banks would benefit far more. I have been told this farmer was continuing to make payments to the best of his ability and there was no need for these tactics or the repossession of the tractor as a result.

Michael Kitt (Galway East, Fianna Fail)
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I ask Deputy McGrath not to identify people.

Mattie McGrath (Tipperary South, Independent)
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I have said what I said. The people in suits orchestrating this did not get where they are by being nice. During my occupation last Tuesday of my own bank in Kilcash in my own count I got calls from locations in County Longford, in Tullamore and in Dublin. I was told other instances like this happened in those locations. The Minister of State's colleague from Wexford, Senator Michael D'Arcy, raised this in the Seanad yesterday. This is happening on a nightly basis so we must deal with the issue.

The Minister of State spoke about a code of practice. Why did it take from 1989 for the code of practice to be implemented in 2012? We are looking at it again. Codes of practice mean virtually nothing to these people, as they are ruthless, dogmatic and their actions are bordering on terrorism. I am not saying that where there is a complete breakdown in communications, banks cannot carry out repossessions. The sheriff may have bad connotations but at least those people are authorised. They must have a bearer's letter and court order. I was told by the managing director of the bank, with a solicitor and the gentleman I spoke about present, that the leasing and hire-purchase agreement was more powerful than a court order. If the people in the banks believe that, we are in big trouble. They have that belief and are acting on it.

The Minister of State is a businessman and knows about the effects of this serious trauma. This practice must stop before somebody is seriously injured or killed. Our people are bailing out the banks and although this institution is not covered, the Minister of State has said it is supported. There are only two directors and we do not even know the identity of the parent banks. It is an evolving issue. The bank in question is only acting as a debt collector at this stage and it has no interest in this country or economy. It has no interest in farmers or other business people who have leases. It is collecting money so it is no good to anybody except in feathering its nest.

I appeal to the Minister of State as a business person of some repute with much experience. He knows what is going on. We have a legitimate Garda force and an Army. We cannot have a third force, a militia, so it should be stood down.

John Perry (Sligo-North Leitrim, Fine Gael)
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The law applies to everybody and nobody is above it. If there has been any criminal activity, it is a matter for the Garda to investigate and the Director of Public Prosecutions to prosecute anybody against whom evidence is available. The Government cannot get involved in individual cases. The framework with the recapitalised banks makes it clear that the Government does not get involved with the daily operations of banks.

The code of conduct is part of a suite of supports put in place for SMEs. It is legally binding and is working fairly well. Nevertheless, all codes may be improved, as can be seen with the most recent version of the code, and it will be subject to further review shortly.

Enforcement actions that may be taken by the Central Bank include monetary penalties and a direction for reprimand to the institution concerned. The Central Bank regularly publishes outcomes of investigations. Financial services firms must comply with business rules in all dealings with customers and the Central Bank of Ireland uses a number of methods to monitor compliance with consumer protection requirements. These include inspections, general reviews on a particular topic and mystery shopping of monitoring and advertising financial services. I appreciate the Deputies raising this matter.