Joan Burton (Dublin West, Labour)
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65. To ask the Minister for Finance his views on proposals by banks to offload mortgages in arrears; the number of such mortgages in respect of small and medium enterprise, SME, and other business loans in which the security for the loan is a personal home; and if he will make a statement on the matter. [13670/18]

Joan Burton (Dublin West, Labour)
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I have no problem with either or both Deputies speaking because this is such a life and death issue for so many families.

This question follows on from the previous one. We face a horrendous situation. Right around the country, particularly I would think outside Dublin, there are people who have conflated personal guarantees on their family residential homes with loans they took out for commercial purposes. The Minister does not have to make the sort of big decision that had to be made on Anglo Irish Bank but he has to see what he can do to ensure the future of these families because if they lose their homes they will lose their businesses as well. If the Minister is worried about the future of small businesses and rural Ireland, as the Minister of State beside him, Deputy D'Arcy, well knows, this is a catastrophe waiting to happen.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am well aware of the concerns on this matter. In responding to questions I try to show that we also have to get to a place where the level of non-performing loans that Irish banks have is reduced. There have been several years of economic growth in our economy. People have returned to work, in no small part due to the decisions made by the Government of which the Deputy was a member. There is the potential for the country to move to full employment. For one of the largest banks to still have non-performing loans in excess of 20% on its balance sheet has very serious consequences for that bank. That is why it is trying to deal with the matter. Through the different courses of action I have outlined, and in what I seek to do by assessing the effectiveness of the code of conduct on mortgage arrears, in trying to work constructively with Members of the Dáil on legislation they bring forward, I am trying to maintain the framework that has resulted in a big reduction in non-performing loans and a significant reduction in mortgage arrears in recent years, while avoiding the huge social consequences that many forecast several years ago and which did not happen.

Joan Burton (Dublin West, Labour)
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I put it to the Minister that he has arrived at a crunch time. I do not think there is very much disagreement on those loan holders who have failed to engage in any way with the banks. What I and others have constantly spoken about is those people who in good faith made an arrangement and are sticking to it at great sacrifice to themselves. In almost every other country where bank collapses happen, for instance in the United States, they would be able to strike a deal. While it was not possible to do deals five years ago, it is now possible to do them because of the strength of the Irish economy and it is up to the Minister for Finance to be creative about a structure that allows families or businesses which have offered personal guarantees on business lending of their family homes survive.

Paschal Donohoe (Dublin Central, Fine Gael)
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Customers and citizens have been making agreements with many banks to help get through the grave difficulty in which they were and still are. The Deputy refers to structures. I can mention the personal insolvency legislation and organisations such as Abhaile, all of which have contributed to a massive reduction in mortgage arrears over recent years, for 16 or 17 consecutive quarters. That has happened because the structures have been in place to help people get agreement in a way that differentiates between the majority of citizens who want to pay and a few who have decided not to pay at different points. I have told the House several times this afternoon that, conscious of the fact that there are further significant developments on the horizon, such as the potential loan book sale by Permanent TSB, I aim to see how we can assess, and change if needed, matters such as how we regulate private equity funds. I also aim to ask the Central Bank to review the code of conduct on mortgage arrears because I want to ensure that we have the right structures in place to manage further difficulty and stress that could develop in the period ahead.

Joan Burton (Dublin West, Labour)
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The Minister is not offering any creative solutions to this problem. There are people who have businesses and who are in employment breaking their backs to meet the conditions. We are talking about people who have made great personal sacrifices. I can certainly offer several creative solutions. Practically any accountant in town would. I was personally involved in setting up Abhaile and the other schemes as a way to help people survive and come out of the crisis with their family homes intact. I am not sure that the Minister really recognises that the risk now is that families who have entered agreements could find themselves swept into the arms of non-registered entities which will give them no security to be able to hold onto their family homes. That is the dilemma to which the Minister must offer creative solutions.

Michael McGrath (Cork South Central, Fianna Fail)
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It is not acceptable that AIB refused last week to provide any information whatsoever on Project Redwood. It would not confirm its existence but if I look up that "alleged" portfolio sale, as AIB called it, online I see a running commentary including the fact that it is down to the last phase with Lone Star, Cerberus and Goldman Sachs, which is expected to be completed by June. While I disagreed with much of what the Permanent TSB officials said last week, at least they engaged and provided information. There has been no information from AIB on Project Redwood. That is not acceptable.

They need to provide information to us. We are talking about farm loans, small business loans, retailers, manufacturers and buy-to-let properties. Zero engagement from AIB is not enough.

Pearse Doherty (Donegal, Sinn Fein)
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I was baffled. It was a simple question as to whether they would confirm that Project Redwood indeed existed. They said they would not even comment on that, despite the fact that we have the named three entities in the second phase of the sale. Earlier today, the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach asked publicly for them to reflect on the contribution they made in respect of Project Redwood. We have now asked them to do that again and to appear before the committee. As Minister for Finance, would Deputy Donohoe support the call of the committee for AIB to come back before it to discuss the loan sale that is under way at present? While the Irish people and the committee cannot go into the detail of how much the loans were and so on, we need to see what is being sold under Project Redwood. Are there split mortgages, farmland or homes that are attached to businesses such as those Deputy Burton raised? These are crucial issues and the finance committee needs to do its work. I ask the Minister, as the majority shareholder in that bank, if he supports the committee's view that AIB should come before us and discuss these matters, which members across the political divide were trying to question the bank on just last week.

Paschal Donohoe (Dublin Central, Fine Gael)
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I believe banks should give as much information as they possibly can to the committee and answer any questions that are put to them. I know that when banks are managing these sales, constraints are generated. I was affected by this myself in respect of what I was able to say about the Permanent TSB disclosure. However, within the constraints that are imposed due to stock market rules, it is still possible to give a fair amount of information regarding what is happening. While there are legal constraints that apply to banks that are involved in these transactions, I do believe they should give as much information as they can to the committee.

Michael McGrath (Cork South Central, Fianna Fail)
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They gave none.

Paschal Donohoe (Dublin Central, Fine Gael)
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When I am in front of the committee, while we do differ on matters, sometimes vigorously, I do give as much information as I can and I believe other witnesses before the committee should do the same.