Denis O'Donovan (Fianna Fail) | Oireachtas source

I move amendment No. 2:

In page 6, between lines 7 and 8, to insert the following:"Power of Court to determine the rejection of a proposal for a Personal Insolvency Arrangement as unreasonable

4. (1) Where in an application by a mortgagee for repossession of a property to which section 2(1) applies, a proposal for a Personal Insolvency Arrangement made pursuant to section 98(1)(c) of the Act of 2012 which included the debt of the property had been rejected by reason, in whole or in part, of a vote by the mortgagee at a creditors meeting held pursuant to section 109 of the Act of 2012, the Court shall, with the consent of the mortgagor, direct the Personal Insolvency Practitioner concerned to provide to it a report in writing which shall include the content of the proposal, and any amendments made thereto, for a Personal Insolvency Arrangement.
(2) The Personal Insolvency Practitioner shall cooperate in providing the written report to the Court within a period prescribed by the Court to be not more than 2 months. In making the report to the Court under this section the Personal Insolvency Practitioner shall provide an opinion as to whether the rejection by the mortgagee of the proposal for a Personal Insolvency Arrangement was reasonable.
(3) In providing an opinion pursuant to subsection (2) the Personal Insolvency Practitioner shall have regard to whether the proposal of a Personal Insolvency Arrangement constituted an offer to repay an amount, whether on a restructured basis or not, equal to the current value of the property and any other matter considered relevant by the Personal Insolvency Practitioner having regard to his or her experience in the proposing of Personal Insolvency Arrangements.
(4) The Court on receipt of the written report from the Personal Insolvency Practitioner shall cause to be made available to the mortgagor and to the mortgagee a copy of the report and shall provide a reasonable period of time for any response in writing to be provided by either party such period not to exceed one month.
(5) On receipt of any response provided by the parties the Court shall proceed to fix a date of a hearing for the purposes of determination by the Court of the reasonableness or unreasonableness of the rejection by the mortgagee of the mortgagor's proposal for a Personal Insolvency Arrangement.
(6) Any creditor being the subject of the proposal for the Personal Insolvency Arrangement shall be notified in advance of the hearing and shall, on request, be provided with a copy of the report of the Personal Insolvency Practitioner and any responses provided by the mortgagee or mortgagor and shall be entitled to make submissions at the hearing under this section.
(7) In determining whether or not the rejection of the proposal for a Personal Insolvency Arrangement was reasonable or unreasonable the Court may have regard to the following matters:

(a) the report of the Personal Insolvency Practitioner and any responses received by the mortgagee or mortgagor;
(b) the submissions of any creditor;
(c) whether the proposal of the Personal Insolvency Arrangement constituted an offer to repay an amount, whether on a restructured basis or not, equal to the current value of the mortgaged property;
(d) the housing needs of the mortgagor and his or her dependants;
(e) the conduct of both parties including the conduct of the mortgagee in underwriting the loan/s secured by the mortgage;
(f) any other circumstances or matters that the Court considers relevant.

(8) If the Court determines that the mortgagee's rejection of the proposal for a Personal Insolvency Arrangement was unreasonable the Court may do any one or more of the following:

(a) adjourn the application for repossession for such time as is necessary to enable the mortgagor make another proposal for a Personal Insolvency Arrangement and for a vote on such proposal to be taken pursuant to section 109 of the Act of 2012;
(b) stay the coming into effect of the Order of repossession for a period not exceeding 24 months;
(c) without prejudice to the Courts discretion as to any order for costs it might make order that the mortgagee pay the costs or part costs of and incidental to the following, such costs to include the reasonable costs of the Personal Insolvency Practitioner:

(i) the making of the proposal for a Personal Insolvency Arrangement;
(ii) the application for the Order of repossession;
(iii) the hearing under this section.

(9) A copy of the Personal Insolvency Practitioner's report together with any responses received and any Order made under this section shall be provided to the Insolvency Service of Ireland.".

I will not push the amendment to a vote today but I would like the Minister to consider it, and my plan is to re-submit next week on Report Stage. In a nutshell, there seems to be a problem in that it is far too easy for a bank or building society to repossession a family home. The rules existed eight or ten years ago when things were crazy and the banks were throwing out money willy-nilly and people got into trouble. Much has changed since then, and the Minister knows well thousands of home owners have their backs to the wall and are doing everything possible to try to deal with the banks or building societies. There is also a percentage giving the two fingers to the banks but I do not speak for them. I am speaking for the genuine hard-pressed people who, perhaps because they have lost jobs, their income has been reduced or where there was two incomes there is now one, they are pulling out their hair trying to negotiate with the banks.

I am much older than some Members of the House and I have been dealing with banks since I was 17 or 18 years old and I have never seen them as intransigent and difficult than they are now. There is a reason for this, but a distinction must be made between commercial debts and second homes and apartments and genuine family homes. This is why I strongly feel the banks' powers have in no way been diminished in the past four or five years. When the Bill was originally planned the landscape was better for borrowers. As the Minister is aware this has completely changed, and we can blame governments or international trends for this.

This side of the House is deeply concerned the power of the banks, even today, is far too great to the detriment of the customer doing his or her best. The purpose of the amendment is to give greater leverage to the borrower and court system. If one goes to court against the banks very little by way of defence is available. I believe that at least 70% of what happened in the bubble, the property boom and the crash lies at the door of the banks and the regulator and we must be cognisant of this. Were it not for the Dunne case, which is now under appeal, many more repossessions would have taken place. It is disenchanting and difficult for the ordinary people who have a roof over their heads. In a case of repossession involving children the family must be rehoused by the local authority.

We should make no excuse for giving powers to the court in some instances to tell parties they must return in 18 months or two years, after sitting down with the customer and doing everything humanly possible to defer the debt. Nothing has changed in the past four or five years. In the same way as was done by the previous Ministers with responsibility for finance and justice, the banks are being empowered to the disadvantage of the unfortunate customers who find themselves in negative equity and arrears and not in a position to pay.