Mark Daly (Fianna Fail)

I welcome the Minister of State to the House. I liked his discussion on the Constitution and the independence of the Seanad. The term "A nod is as good as a wink to a blind horse" came into play at one stage. He said he is part of the Government while we are independent and that it was up to us to make a decision because he was not going to tell us what to do. I hope that my colleagues opposite listened to the esteemed Minister of State and will take his comments on board.

He referred to the code of conduct which is a very technical area. I commend Senators MacSharry and Byrne for publishing the Bill. It is an enormous piece of work and a great deal of thought and effort has gone into it. Senator Byrne discussed a particularly interesting aspect of the Bill with colleagues from Fine Gael in the Dáil. A proposal on the debt for equity option is contained in section 6. This is a very practical solution which has not as yet been included in legislation. It provides that a house owner can go to court to make the bank take a share in the property thus avoiding an upset to the balance sheet of the bank. Senator Byrne discussed this provision a year ago and a former Fine Gael Deputy from Offaly worked with him on this issue. It is a practical solution which will work. The balance sheets of the banks will not be put out of kilter. It would mean that monthly repayments would be reduced but so too would the house owner's share of the ownership. When the individual concerned is back on a firmer financial foothold, he or she can buy back the equity. For example, if a house had been purchased with a mortgage of €500,000 and is now valued at €200,000, the bank could take a share in the house which in this example would mean a three fifth share in the property. The monthly mortgage would be reduced by an equal amount. As my colleagues have said, if the banks pursue the owners through the courts and have them kicked out of their houses, these people will end up depending on the social welfare system and the State will have to provide them with housing in any event. There is no point in the banks taking possession of a house to sell it because the banks are not willing to lend money to any prospective purchaser. We are in a financial quagmire as regards property and this Bill is a very good attempt at a resolution.

I note Senator O'Keeffe has called for no delay, ironically, on the day the House will rise for the summer recess. She also called for action and this Bill is just that. She said that she did not agree with parts of the Bill but once Bills are before the House they can be changed exponentially because everyone's input is put into the pot, so to speak, and changes are possible.

I am interested to note the constitutional and legal advice on this issue. However, the code of conduct cannot be used by borrowers in a repossession court case. If a bank has not followed the code of conduct, this can be taken to the Financial Regulator but that is not much good to a person whose house has been repossessed. This is the same Financial Regulator who was not doing his job previously. It is not an inspiring suggestion that one should go to the Financial Regulator to say that the banks are not following a code of conduct. This is not a sufficient solution and there is no real penalty for the banks if they do not follow the code of conduct. In that respect, Fianna Fáil will call for a vote on this motion. The problem is massive and people with more knowledge of economics than me have told us that this is the second tsunami, that it is like NAMA, only bigger. The banks will eventually come to us looking for more money. The numbers are relatively small as a result of the moratoriums put in place by the previous Government. I maintain that Senator O'Keeffe's suggestion is rhetoric of the highest order. We can sit here all this week and we can tease out the problems that have been identified by the learned people in the Office of the Attorney General. Other speakers have highlighted that the distress is causing people to take their own lives. People are dying as a result of this undue delay which so concerns Senator O'Keeffe. We are going on holidays tomorrow and this Private Members' Bill will not be passed by the Government but I hope her colleagues will show some independence.