Pearse Doherty (Donegal, Sinn Fein)
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66. To ask the Minister for Finance if he clarified to all State owned or part owned banks that his view is that they should not sell loan books to vulture funds; and if he will make a statement on the matter. [13653/18]

Pearse Doherty (Donegal, Sinn Fein)
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This is connected to the previous question. I thank the Minister for his response. I recognise what he said in respect of his own contributions before committees. AIB would not even confirm the sale. It is being reported across the globe, in the Wall Street Journal, in papers here and in England. The bank treated the finance committee appallingly, in my view. We have asked them to reflect on it and to come back. I welcome the Minister's comments.

Last week, the Minister confirmed to me that he had a meeting with Permanent TSB in which the loan sale, Project Glas, was discussed. Can he confirm to the House the views he expressed to Permanent TSB in respect of that loan sale?

Paschal Donohoe (Dublin Central, Fine Gael)
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I have outlined to Permanent TSB the views that I have shared with the House this afternoon, namely, that I understand that they are subject to a requirement from the regulator to reduce their non-performing loans. They took me through the circumstances that their bank faces, much of which I was aware of. I described to them the process that is open to me and the point at which I would be consulted in respect of this, of which they are aware. I emphasised to them the huge concern in respect of this matter and the need for those concerns to be recognised in how they act.

Pearse Doherty (Donegal, Sinn Fein)
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People refer to the Minister's predecessor using the term "vulture lover", which is probably due to a comment he made to the finance committee about the role vultures play in society. He believed there was a role for vultures in the financial system as well. I do not share that view although he is and was entitled to it. There is a real question in respect of where the current Minister stands, however. He is the majority shareholder in that bank. Is he going to give any indication to Permanent TSB that he, as Minister for Finance, does not want these 18,000 loans sold on to the vultures and that he wants them to work down these loans and to look at other avenues?

For example, I raise again the 6,000 split mortgages. They made a bags of them. They made a mess and got the wrong advice. Under the exact same rules and criteria, one State-owned bank was able to sort it out. We took them through it bit by bit. However, the CEO of the other bank was telling us that unless it sold them on or they returned to their original contract, they would be deemed non-performing. We know that is not true. I do not run a bank. I am not paid the amount that CEO is paid, yet I and every other member of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach, knows that it is not true. It is mind-boggling stuff. We cannot sit back when a State-owned bank, as a result of its own incompetence in structuring these loans, says there is no option but to sell them off. Will the Minister tell the bank to restructure them using the model that AIB used so that we can bring these 6,000 loans, which comprise about 5% of their non-performing loans, back to a situation where they are performing?

Joan Burton (Dublin West, Labour)
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I think the Minister is trying to be helpful but, in all honesty, these banks, notwithstanding the fact that they are majority State owned, are acting in a really gung-ho way towards families. That includes families who have businesses and a variety of circumstances and commitments as well to employment. Essentially, the Minister is adopting a hands-off approach and is indicating that there is little or nothing he can do. I actually do not agree with that.

I think the Minister is in the position of being Minister for Finance so that he has a capacity to work out solutions that are helpful to people who have actually tried their best and are paying it off. The social consequences of cutting these people adrift, whether they are businesspeople or people in a family situation who may lose their family home, and the social cost is catastrophic right around Ireland, particularly as regards business loans in rural Ireland and in farming, allied to Brexit. That is what we are trying to explain to the Minister.

Bernard Durkan (Kildare North, Fine Gael)
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There is absolutely no reason that all banks cannot treat the customers in the same way, with particular reference to a code of conduct. Currently, the only code that is acceptable is the one the banks manufacture themselves. They become judge and jury. They put out the code of conduct. They tell the client, "Sorry, you do not comply; your loan is unsustainable." It was unsustainable from day one but there is no reference to that at all. That is the sad part of it. I strongly urge that we look carefully at the code of conduct. It will be of assistance. There is the question of splitting mortgages and all that can go with it as well. There is no reason it cannot be done. I ask the Minister that serious consideration be given to it.

Paschal Donohoe (Dublin Central, Fine Gael)
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The code of conduct is currently being reviewed by the Central Bank. Under the powers available to me under the Central Bank Act, I asked that it conduct a review regarding the operation and effectiveness of the code of conduct as it currently stands. I am aware of potential change that could happen in the future and I want to make sure we are striking the right balance between our citizens, the taxpayer and the banks.

I do not need Deputy Burton to explain to me the consequences of this and the worry that people feel. I have articulated this since the moment I was required to comment on the issue. I know the responsibilities that I have. In terms of responsibilities, I want to return to a point I made earlier when answering a question from Deputy Pearse Doherty. I remind the Deputies, although they will be aware of it, that we are talking about a bank that has a million customers. It currently holds €21 billion of mortgage loans and €17 billion worth of deposits, and employs 2,500 people. After a number of years in which we have seen significant growth that has improved the balance sheets of banks and has helped our citizens cope with the great difficulty that they were under, having gone through all of that, this is a bank that still has non-performing loans which are five times the European average. If not dealt with, that will have consequences for the bank for which in turn the Deputies will hold me accountable.

Joan Burton (Dublin West, Labour)
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They are misclassified.

Paschal Donohoe (Dublin Central, Fine Gael)
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I am accountable for both and, as the Deputy knows, different banks have handled this matter in different ways. The framework that we have had in place has served most people well as they have tried to deal with difficulties with personal debt at a time of economic difficulty. In the time open to me, I am looking to find a way in which we can make sure we have the right framework in place for change that might ensue. That is not me not taking my responsibilities seriously. It is me taking my responsibilities seriously but they are manifold and I must try to strike the balance that I just described to the House.

Declan Breathnach (Louth, Fianna Fail)
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If I have Deputies' co-operation, we will get Deputy Pearse Doherty's next question and Deputy Wallace's. There are 12 minutes left.

Pearse Doherty (Donegal, Sinn Fein)
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At what point will the Minister be consulted with regard to the sale of Project Redwood? It is later on in Project Glas. Are we expecting that in the next months?

Paschal Donohoe (Dublin Central, Fine Gael)
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I do not have the information for the Deputy on that. I do not know but I will find out for him and write back to him. I will check that and give the Deputy the answer to it.

Pearse Doherty (Donegal, Sinn Fein)
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I thank the Minister.

Declan Breathnach (Louth, Fianna Fail)
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There are just over 11 minutes, and we can get Deputy Wallace's question in if everyone co-operates. Deputy Doherty has 30 seconds to introduce No. 66.

Pearse Doherty (Donegal, Sinn Fein)
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I have done that one. I will do it again, if the Acting Chairman wants.

Declan Breathnach (Louth, Fianna Fail)
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Sorry, we move to Deputy Wallace, No. 67, and if he co-operates, we might get to Deputy Michael McGrath's question.