Marc MacSharry (Fianna Fail) | Oireachtas source

I welcome the Minister to the House and thank him for taking time to attend, given his busy schedule. It is a shame we have to talk so often about this issue without any consequent penetrative action. I commend Senator Barrett on his work on this Bill. If we had had a model such as the Danish model some 20 or 25 years ago, before we had all our problems, I do not believe we would be in the difficulties we now face. There is a good body of work there to consider but although the Minister stated he would ask his officials to look at aspects of it and how they might be transposed into an Irish set up, which is welcome, I have no confidence that this is hitting home in the Department of Finance given the way that Department interacts with Government. I speak of the inherent difficulties which demand immediate action.

The Minister stated: "These two public servants were doing exactly what public servants do - clearly articulating and implementing the Government's policy on the resolution of mortgage arrears." Ms Fiona Muldoon stated that the banks should fix their balance sheets through "at least partial forgiveness of irrecoverable loans". In my view that means debt forgiveness. Mr. John Moran said something very similar, leading to the headline in one of the local newspapers: "New Hope for Write-Down on Mortgage Debt."

The Minister mentioned possible mortgage resolution solutions, referring in the first place to a code of conduct. In its analysis of compliance with the code of conduct, the Central Bank showed that the banks are not following that code of conduct. This can be verified in the releases published by the Central Bank on its website. It is true that a mortgage arrears resolution process has been put in place which offers a structure of contact with people who are in difficulty and it has been followed to an extent. However, all reasonable solutions are not being considered. The Minister referred specifically to an appeals process but that is an internal process. To what body does it appeal? If a bank's decision to offer very little is appealed, the appeal is heard by the bank itself, which also determines whether action is necessary.

Senator O'Brien observed that according to anecdotal evidence in his constituency action on the mortgage to rent scheme is not being followed through. In situations where I act formally on behalf of people who have asked me to be a point of contact with the lender, I have asked for action to be taken but no bank has the slightest intention of taking this on board. They are not interested in meaningful solutions. Senator Barrett referred to the back stairs for bankers in the Department of Finance. Unless a measure happens to be the banker's idea, it seems the Legislature must continue to be in denial and refuse to come forward with reasonable solutions. This will be the case until there is an independent statutory demand that banks take particular actions. That does not mean codes of conduct although if these were statutory and properly enforced we would find out that banks were not complying. Consider what would happen if there was a law enjoining banks to take a particular action.

For example, why not have aspects of the Personal Insolvency Bill tested before the courts by requiring that order for repossession of a family home cannot be granted unless specific steps are taken by the relevant bank, including extending the term of the loan, renegotiating its terms or offering a rent-to-mortgage facility? If the law required such steps to be taken in advance of any order for repossession being granted, the brains of the very same bankers who produced various complex methods of losing money, such as derivatives, would have to be engaged to put forward what is needed in this process. This is not just about having the "best boy in the class" T-shirt for European bankers to whom we had to repay enormous sums but about the people of this country. The number of residential mortgages in arrears has reached 129,000 and the figure is increasing by 1,000 each month. If we wait for the market to rise to allow people to recover, we will probably wait for 18 years, as a number of reports have shown. We are still in denial. We have had the Personal Insolvency and Debt Settlement and Mortgage Resolution Office Bills. Senator Sean Barrett, the sponsor of this Bill, is being given the pat on the head that is customary when Independent Senators introduce legislation.