Dáil debates

Wednesday, 5 April 2017

Consumer Protection (Regulation of Credit Servicing Firms) (Amendment) Bill 2017: First Stage

 

1:35 pm

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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I move:

That leave be granted to introduce a Bill entitled an Act to provide for the protection of certain borrowers who are parties to credit agreements in respect of which the owners of the credit are unregulated through the regulation of the owners of the credit; and to provide for related matters.

It is apt that Deputy Martin Kenny questioned the Taoiseach on what the IFA told us this morning about the fear farmers have that the vultures are about to pounce on them. The Taoiseach says it is not an issue for the Order of Business but it is definitely an issue for this part of today's schedule. My Bill will, once and for all, regulate vulture funds.

After a long period of procrastination the previous Government eventually acted to regulate the so-called vulture funds when they were buying up much of the country through the purchase of commercial and residential loan books. We all know that those are the loan books the banks want off their books. They are made up of small businesses, farm holdings and mortgage holders struggling with arrears. In recent years tens of thousands of families woke up to a letter through the door informing them that they now owed money to a company they had not taken out a loan with and one they never heard of or engaged with. When they tried to contact this company, they could not find an address or even a phone number to make such contact.

There was no regulation in place and after much pressure from Sinn Féin and others in many campaign groups, the previous Government eventually moved to regulate the vultures. However, what happened next was that the vultures began to lobby. From responses to parliamentary questions I tabled, we all know the Minister for Finance met the vultures on many occasions and his officials met them even more frequently. That continues even to this day.

Subsequently, the legislation that had originally set out to regulate the vultures was weakened. It was decided not to regulate the owner of the debt, but instead the middleperson. Sinn Féin on Committee Stage defended the interests of those struggling to pay their mortgages and we sought to ensure the owners were regulated. Unfortunately, Fine Gael and Labour Party members voted against our amendments and the Fianna Fáil members did not turn up at the committee for that part of the proceedings.

As a result the vulture funds are not regulated and the middlemen are. The Central Bank's latest figures, indicating 41% of family mortgages owned by unregulated vulture funds are now in deep arrears, are extremely worrying. When we hear about banks turning profits and bankers getting grotesque bonuses, we have to remember that they have sold many of the tough cases to the unregulated vultures to deal with.

Today I am moving a Bill that seeks to regulate the owners which have bought up and continue to buy up much of the credit of this State. The half-hearted approach of regulating the middleman has not been enough. The Central Bank has indicated its support for the approach I have set out, which my party has called for since the issue first raised its head. The Bill returns to the heads of Bill that the Department of Finance itself produced when it first assessed how to deal with the issue. This was the plan before the vultures got in the ear of our policymakers.

Today I am putting forward one part of a plan, a Bill that I hope can get cross-party support. However, we need to do far more to clip the vultures' wings. The Minister needs to take direct and immediate action based on the powers he has. He needs to direct the banks, in which we have major shareholdings, and NAMA to stop selling to the vultures - no ifs or buts. He should also act immediately to close down the remaining tax loopholes, such as the CGT exemption that is still open to the vultures that are buying up much of the country tax-free or at a reduced tax rate.

I believe there is scope for the Minister to follow Belgium's lead in introducing laws that prevent the use of this country as a base for vulture funds as they attack developing countries throughout the world. There is a clear set of policies that can clip the vultures' wings, but unfortunately to date the political will has not existed on Government benches to take them on. That must change and I hope that can begin today. I hope the Bill can win cross-party support and send out a clear message that a free hand will no longer be given to the vulture funds.

1:45 pm

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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Is the Bill opposed?

Question put and agreed to.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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Since this is a Private Members' Bill, Second Stage must, under Standing Orders, be taken in Private Members' time.

Photo of Pearse DohertyPearse Doherty (Donegal, Sinn Fein)
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I move: "That the Bill be taken in Private Members' time."

Question put and agreed to.