Thursday, 26 November 2015
Tuesday night's RTE "Prime Time" programme made for shocking viewing. It exposed the scandal of banks denying mortgage customers their contractual right to return to a tracker rate following a period of time on a fixed or variable rate. Customers have been forced to go through the banks' own internal appeal systems, the Financial Services Ombudsman, the Central Bank, and the courts system to vindicate their rights. If they finally win the argument to be returned to a tracker rate, many of them are not being given the original tracker rate but a much inflated one which is sometimes between 3% and 4% higher than the original tracker rate.
As the Tánaiste knows, the only variable element of a tracker mortgage rate is the ECB base rate. The margin should remain constant. "Prime Time" featured a customer who successfully fought Permanent TSB all the way to the High Court. He has now been given what can only be described as a ridiculous tracker rate costing him hundreds of euro extra each month in additional interest payments. In that case alone, Permanent TSB stands accused of failing to honour the terms of the original tracker mortgage contract by significantly hiking the margin it charges, quoting the customer a margin of up to 3.35% instead of the original 1.1% above the ECB rate. This cannot be dismissed as a legacy issue from another era because it is happening here and now. Indeed, it is not an isolated case.
Very serious issues were also raised in the "Prime Time" programme concerning practices at AIB and Bank of Ireland. One AIB customer whose case was profiled was eventually, after a battle, returned to a tracker rate with a margin of just under 4%. We already know that up to 300,000 variable rate mortgage customers are being ripped off by their banks. We now know that many tracker customers are being denied the right to return to a rate to which they are contractually entitled. We have known for some time that in some cases banks are determined to do whatever it takes to get people off tracker mortgage rates.
There is a widespread suspicion that banks have been using subtle tactics, and in some cases not so subtle tactics, in recent years to nudge customers off the tracker rate they are entitled to. The banks have no fear of the Central Bank on this issue and that is the sad reality. They are not afraid of a slap on the wrist. The truth is that the Central Bank has been examining this issue since 2010. If the Government wants banks to sit up and take notice of this issue, it needs to talk the language they understand, which is that heads will roll at a senior level if such consumer issues are not being dealt with-----
-----fines will be imposed which will hurt them, and additional capital requirements will be imposed on financial institutions that breach the consumer code of conduct and where consumer rights are not being protected. Is the Government going to stand idly by and allow this practice to continue?
First, I express my full sympathy for individuals and families who have had this negative and at times extremely stressful experience of dealing with banks, including negotiations, the time it takes, and the various levels people have had to go through.
The Deputy is probably aware that the Money Advice & Budgeting Service, MABS, is one of the advisory services available to the public through the resources of the Department of Social Protection. It helps in situations like those outlined by the Deputy. It can be very difficult for those involved because while we have the Financial Services Ombudsman, the actual examination of various issues in cases can take a great deal of time. I would certainly like to see an improved and expanded service from the Financial Services Ombudsman. This is one way in which this particular situation would be assisted.
The Deputy said it is not a legacy issue, but the actual experience-----
Yes, it does. Let me finish. I did not interrupt the Deputy at all. The consequences of the crash have been very simple. The actual powers of the Central Bank and of the regulatory authority as well as the independence of the Central Bank as an institution have been strengthened significantly to ensure for everybody's sake that we will never see a banking crash again.
The Deputy asked a number of questions. I do not know whether he is implicitly proposing in the question that it would be better to remove the independence of the Central Bank and that the Minister for Finance, Deputy Noonan, would make direct decisions in this case. As the Deputy knows, the general regulatory structure that has been adopted in Ireland and around the European Union is to seek to have a strong independent regulatory authority as well as having strong consumer protection.
I share the Deputy's concerns both in terms of cases I am aware of and those I have read about in the newspapers. The banks have been dealing quite well and fairly with a number of cases. However, I do not have the overall picture. I know that some people have got settlements from different banks which they have been satisfied with.
These include the banks the Deputy has mentioned. If we are having a serious discussion about this, we need to look at the different elements of the problem. Is the Deputy suggesting that somehow or other we should move away from the independence of the Central Bank, but not from dialogue with the Central Bank or requiring it to act both in terms of the security of the banking system and also customer protection?
That is the balance we have to achieve concerning this matter. In the context of where we have come from, it is absolutely a legacy issue. It is also a legacy issue for all of the European banking system where we have a properly independent regulatory structure.
If Deputy McGrath is suggesting that the Minister for Finance should personally regulate the Central Bank, I do not agree with him on that. That is what led us down the road of difficulty in the past. What I am saying to the Deputy is that the consumer side of the regulatory structure, in my view, certainly does need to be improved. As Deputy McGrath is aware, the Central Bank is undertaking an examination of this area. When we have the results of that examination-----
Today marks the first day in office of the new Governor of the Central Bank, who is properly independent in the exercise of his functions to protect the system and customers.
The bottom line is that the sanctions available to the Central Bank are not strong enough. That is the issue we need to deal with. The banks are not afraid of the possible sanctions that the Central Bank can impose. It is a function of this House and of the Executive to bring forward proposals to deal with that. Since 2010 the Central Bank has been trying to deal with this issue. Customers, who should be protected, have been utterly frustrated at having to go through the internal system within the banks, the Financial Services Ombudsman, the Central Bank's consumer protection division and the High Court.
Permanent TSB went to the steps of the Supreme Court in this land to deny customers their contractual rights. How can an ordinary family deal with that situation? It is simply not fair. What we are dealing with here is a scandal. We need more than sympathy from Government. The individuals and families affected on a day-to-day basis by this issue need action to help them to deal with it.
What we are suggesting is that there is a need for stronger legislation to sanction the banks where clear breaches of the consumer protection code are taking place. It is evident that the sanctions that have been applied have not worked. When something does not work, then the Government has to step it up a level. That is clearly what needs to be done.
I welcome the examination that the Central Bank is doing of the broader issue of how customers on tracker mortgages have been dealt with. However, even if those involved find serious and fundamental problems with how banks have dealt with customers on tracker mortgages and in respect of their rights, I do not have confidence that the Central Bank has the capacity to deal with that. The evidence, unfortunately, is to the contrary. The Government needs to ensure that where there are cases in the system of banks seeking to repossess properties or disputes about the contractual rights of customers to a certain interest rate, then those cases should be halted immediately. The Government also needs to deal with the necessary reform of the Financial Services Ombudsman. There is a six-year rule at present, as the Tánaiste is aware, such that complaints can only be taken in respect of a matter that originated within the past six years. For many customers, that door is closing, if it has not already closed.
We also have a series of public interest directors in the banks, whom the Minister for Finance should be talking to. They should be asking questions on behalf of the State and customers in respect of what the banks are doing. There are a number of examples of what can be done. The Central Bank and the Government need to speak the language that the banks understand, because they have not understood so far.
If it means additional capital requirements have to be put in place in respect of banks, where they are clearly breaching the rights of consumers, then so be it. The Government will find support on this side of the House to achieve that.
I thank Deputy McGrath for his comments. The Department of Social Protection, my Department, actually has two services, the Citizens' Information Board and the Money Advice and Budgeting Service. We deal with some of these difficulties in terms of helping families who have problems. In fact, we have recently introduced a court mentoring service for people who have other mortgage difficulties and are going before the courts. The idea is to give people assistance when they need it.
What I am saying to Deputy McGrath in respect of this matter is that we set up a structure, in light of some of the lessons learned about the banking crash, such that we have a strongly independent Central Bank that is not at the whim of any politician.
That structure has been established on a Europe-wide basis to avoid banking crashes. At the moment, the Central Bank is actually undertaking an examination of this particular area. Those involved have not given an actual date for when they are going to report, but, as I understand it, they have been in contact with the different institutions and people who have been affected by the kinds of distressing stories that Deputy McGrath has mentioned in the House. I do not have an exact date for when they will report, but my understanding is that they will be coming back sometime around the middle of December. I hope that when we get their considered report and evaluation on this matter, any advice they give in respect of the further vindication of consumer rights relating to banking will be implemented. I am saying to Deputy McGrath, as I said in my earlier response, that the Financial Services Ombudsman services could be enhanced.
Deputy McGrath referred to capacity in the Central Bank. There are 1,400 people working in the Central Bank.
The crisis in our health system is getting worse. This morning, we learned that 99% of members of the Irish Nurses and Midwives Organisation in Beaumont Hospital in Dublin have voted for industrial action. This is not a dispute about pay; it is a dispute about patient safety. Nursing staff levels have been decimated on the Government's watch. Nurses would tell the Tánaiste, if she cared to listen, that it is impossible to provide a safe level of care to patients. Those are not my words; they are the words of the professionals. They tell us that staff are close to burnout, that their workloads are impossible and that they have been highlighting serious concerns with management for some time. However, nurse numbers continue to fall and the situation continues to deteriorate.
Beaumont Hospital is short 45 nurses in the medical and surgical divisions alone. Today, 22 patients in that hospital are on trolleys. Here in Dublin, my local hospital, the Mater Misericordiae University Hospital, is 100 nurses short. Today, it has 29 people on trolleys. In fact, as we speak, the Mater is on the verge of triggering the full-capacity protocol. That is how bad things are. Why is this? The answer is quite simple. Today there are 4,500 fewer nurses in the health service than when the Government took office five years ago. This is the result of the Government's health policy and its refusal to invest and reform. It seems the Government prefers to give tax breaks to the rich than invest in more nurses, more home-help hours or more nursing home beds. The Teflon Minister for Health, Deputy Leo Varadkar, has abandoned the Government's big idea and now the Government has no plan and, worse still, it has no clue.
My question is straightforward. Given the scale of the crisis, does the Tánaiste still have confidence in the Minister for Health? How can the Government tell staff and patients at Beaumont Hospital and beyond that it will ensure patient safety?
The State industrial relations machinery is at the disposal of the parties to the dispute. It is at the disposal of the nurses and their representatives as well as the management of the HSE.
I sincerely hope that if those mechanisms are used there will not be industrial action. It is to be hoped such a situation could be avoided with the use of industrial relations machinery.
On the Deputy's point on overcrowding in respect of emergency departments, the emergency department task force implementation group is co-chaired by the director general of the HSE and Mr. Liam Doran, the general secretary of the INMO. It has already implemented a range of measures and other measures to improve the situation are in train as we speak. The emergency department task force has provided funding for the opening of an additional 300 beds to allow patients in emergency department beds to move to other, more appropriate, units within the hospital and has provided significant funding for step-down facilities, in particular for older people who may need nursing home respite care or longer-term nursing home care.
As the Deputy knows, the waiting time for funding for the fair deal has dramatically and positively improved. Additional funding has been provided for the fair deal scheme-----
The question of emergency departments requires widespread constructive and positive action from hospital management, consultants, senior management and nurses. Some 700 more nurses are employed in the public health service than one year ago.
There are a total of 35,163 whole-time equivalents, compared to 34,404 whole-time equivalents in October 2014. As recently as a couple of days ago, an OECD report, which was widely circulated in the media, indicated that we have one of the highest ratios of nursing employment among all of the OECD countries.
We need extra resources, but we also need to improve management. The emergency department task force comprises the people at the heart of the issue, namely, the chief executive of the HSE and the general secretary of the nursing union. They are working together to resolve the situation, which also requires additional resources, beds and staffing. Anybody who has experience of being on a trolley, in particular the elderly or those who have had relatives, children or parents who have been through that experience, know it is a difficult situation. Through the provision of all of these resources, the situation is being invested in and improved upon. A significant number of extra nurses have been employed this year.
The Tánaiste has some cheek to call for constructive engagement from nurses who are at the end of their tether. They are stressed out of their minds and managing an impossible and utterly chaotic situation in our hospitals. It takes gall of the highest order for the Tánaiste to appeal to them to be constructive. They are more than constructive. Every day they are managing the chaos the Government has caused in our hospitals.
I referred to the Mater Hospital, which is about to invoke the use of the full capacity protocol. This involves taking people from trolleys and moving them to different wards - the Tánaiste knows the protocol. Does she know that on any given day seven hospitals trigger that protocol? That is how dire the situation is, but that seems to pass the Tánaiste and Minister by.
The Tánaiste has bragged about 700 extra nursing posts. As of 8 November, the figures from the HSE's staff management analysis show that in terms of staff nursing positions we are in a minus situation. We are actually down 274 posts. The Tánaiste can play with figures in terms of recruitment, but she cannot get away from the fact that there are 4,500 fewer positions, the moratorium has buckled our hospitals and something urgent and immediate needs to be done.
I ask the Tánaiste to answer the questions I put to her initially. What of the Minister, Deputy Varadkar? He is presiding over a disaster that is putting the safety and, God forbid, the lives of patients at risk. That is the reality.
Does the Tánaiste maintain a position of confidence in him? I refer to those who attend Beaumont, the Mater, Our Lady of Lourdes Hospital in Drogheda and hospitals across the State. I ask the Tánaiste to tell them how she will ensure patient safety.
-----on many occasions throughout the decades, and not just today or yesterday. I do not know whether the Deputy has been in the Mater Hospital recently, but it probably has one of the best emergency departments in Europe, which is situated in a very fine, improved, refurbished and rebuilt hospital.
I do not deny for a moment that there are very serious stressors for very hard-working nursing staff. I have said that the Minister, Deputy Varadkar, brought the task force together, which is headed by the head of the HSE and the head of the nurses' union. They have been given-----
If the Deputy knows anything and has ever spent nights in an emergency ward or emergency department, she will know one solution which most hospitals could adopt, and which is available in a number of hospitals at the moment, is an urgent assessment unit. Older people can go to a special facility, which the Deputy needs to go and see in operation. I can tell her-----
It is one of the best innovations that has happened in our health system in recent years because it allows chronically ill older persons with medical conditions to be checked out over a number of hours or longer, as required. People do not have to be in the queues to which the Deputy referred. The Deputy is shaking her head. Obviously she has never seen-----
It is in everybody's interests to come together and resolve the situation using the industrial relations machinery of the State. The Deputy hardly wants to see nurses going on strike.
She is not suggesting that she wants that. I accept she does not want to see nurses who work hard going on strike. We want to resolve this issue, which we will do by providing more beds and employing more nurses.
Some 700 extra nurses have been employed this year and 400 nurses are currently in the recruitment process for additional staff. We are in favour of reducing USC for low-paid workers.
I have been co-operating with An Garda Síochána on a number of issues relating to NAMA and it has been back to me regarding some of these issues. As the Tánaiste is aware, I have asked many questions in the Chamber about NAMA but I have not got many answers. In fact I have got none. I have put some of the questions and others to NAMA directly and I have got answers from it, some satisfactory and some not. One of the questions I asked about Project Eagle was whether Ronnie Hanna, along with Frank Cushnahan or David Watters, ever met any US investment fund personnel. NAMA's reply was "No", that Mr. Hanna had no such meetings with these individuals. We now know that Ronnie Hanna, head of asset recovery in NAMA, did meet at least one of the US investment funds. NAMA's answer to my question is not true.
PIMCO pulled out of the Project Eagle deal because its compliance department would not agree to the success fee. Cerberus replaced it and paid the success fee. What would PIMCO have got for this fee? What did Cerberus get for the fee? It got insider information and the ability to affect the deal. An executive of NAMA, Ronnie Hanna, was part of a cabal to seek payment for affecting the biggest property deal in the history of the State. The three individuals, Ronnie Hanna, David Watters and Frank Cushnahan, had information above and beyond what was available in the data room. David Watters had reviewed the business plan for many of the debtors.
Frank Cushnahan was looking after the political side in the North and Ronnie Hanna was looking after matters inside NAMA in Dublin. We are not talking about Belfast; this is Dublin. This is at the heart of NAMA in Dublin, and this is on the Tánaiste's watch. The Taoiseach assured us that NAMA had dealt comprehensively with all matters put to it at the Committee of Public Accounts, but what is this worth now? We need an independent commission of inquiry. I realise that Fine Gael certainly does not want one, but the Tánaiste is the leader of the Labour Party and she should ensure there is an independent commission of inquiry.
With regard to Project Eagle, I am advised the loan sale was executed in a proper manner, and despite all the different charges the Deputy has made, and charges against named individuals who are not in a position to comment or defend their good name in the House-----
-----but the Deputy has named them nonetheless, I am told the facts are there are no claims of wrongdoing against NAMA. However, the Deputy clearly has issues with regard to the people he has named.
Clearly, at the base or back of his particular complaints is probably his own unfortunate experience, to which he has referred on many occasions. Understandably, he has a very strong vested interest in, and probably even stronger feelings about, what happened in the context of the collapse in the values of properties when the economy and property valuations collapsed. A portfolio worth almost €6 billion, like many people's personal domestic houses, lost 60%, 70%, 80% or 90% of its value. If the Deputy is saying this loss of value can be attributed entirely to NAMA, and not to the actual impact of one of the most devastating property crashes in the world, then I want to acknowledge he has suffered.
As somebody who was involved in the building trade, I know from some of the public records and the media that he suffered. This does not mean that because he feels a very strong personal sense of grievance, which I understand, that his claims of wrongdoing against NAMA stand up. I said to him before on this that NAMA is answerable to the Committee of Public Accounts. I strongly advise the Deputy to take the issues he has raised here, if they are additional to the issues he has already raised, to the Committee of Public Accounts and seek to have them examined there. He knows as well, because we discussed it on a previous occasion, that in the North the Comptroller and Auditor General there is conducting a value for money review into the Northern Ireland sale, and I strongly recommend that the Deputy seeks to get the findings of this report and what it will have to say.
Under Standing Order 59 there is a mechanism whereby a Deputy can give prior notice to the Ceann Comhairle concerning matters in the nature of being defamatory and Deputy Wallace should avail of this. I ask him not to name people who are outside the House.
Any allegations I have made against NAMA have zero to do with my business. I never had interaction with NAMA through my business. I did not go into NAMA. The Tánaiste seems to be deliberately failing to interpret what I have said. I have given her some new information and I have outlined how I was told untruths by NAMA when it was questioned. The Tánaiste does not seem to have a problem with this. This is shocking.
It has nothing to do with me; it has to do with the people. NAMA has failed to serve them properly. There are serious question marks. An executive of NAMA, Ronnie Hanna, in Dublin, deliberately interfered in the process. Does the Tánaiste not have a problem with this? Is she just going to let this flow on and not look for a proper independent commission of investigation into this? Is this possible? I find it hard to credit.
I will put a number of questions to the Tánaiste, and she should get answers to them from NAMA. It might tell her the truth. What date and time and to whom was the Fortress bid submitted? What date and time and to whom was the Cerberus bid submitted? Were the bidders advised that the bids were to be the best and final bids? Were they advised that the reserve was £1.24 billion? When and by whom was Fortress advised that its bid was not successful? Did Fortress offer in writing or verbally to increase its bid? Mr. Hanna resigned six months to the day after the Cerberus deal went through. Why?
I appreciate the Deputy's concern in the matter, and if he has had no contact with NAMA, I accept that, but I certainly have seen in the public media and I am aware that he was a very fine developer and builder who lost out, as so many others did, in the course of the property collapse in Ireland.
The Deputy has set out on Leaders' Questions a series of very detailed questions relating to a specific institution - NAMA - that is answerable to the Committee of Public Accounts. The Deputy is, I suppose, using a trick deployed by lawyers. He is asking a question and he is very confident he knows the answer to it but I have had no notice of it.
I cannot answer those questions. If Deputy Wallace is serious about getting an answer to those questions, although I presume what he is really trying to do is publicise-----
The Deputy expects me to answer these questions. He really ought to go to the Committee of Public Accounts and if he has evidence of wrongdoing, he should take it to the Garda.
Deputy Mathews has told us on many occasions how he helped liquidate a failed banking situation some decades ago. In all failures in banking and in business, unfortunately there is a loss of value.
Deputy Wallace is disputing that in the biggest property crash in the world, there was a loss in the value of the assets. There was a loss of book value. These were bubble-inflated prices and the Deputy argues that all of that should have been recovered. I am afraid that when there are very big crashes-----