Aideen Hayden (Labour) | Oireachtas source

I welcome the Minister to the House. Like Senator Reilly, I will not go through what the Bill provides because this is technical legislation which has, as has already been pointed out, two very straightforward purposes. However, I will make one or two comments on the provisions. I will refer to what has been said in the Lower House and perhaps add something to those comments, and that of the Minister. I welcome his statement that it is expected that Bank of Ireland would, in all likelihood, transfer some of its assets and liabilities to a third party post the enactment of the legislation. In fact, it is anticipated that about €1 billion of the loan book will be transferred. Based on the figures he provided, I estimate that this involves about 7,000 mortgage account holders.
I am a member of the Oireachtas Joint Committee on Finance, Public Expenditure and Reform. I was present while the transfer of the INBS loan book was discussed, and much concern was expressed - across the table, not on a party political basis - about the impact of the transfer of loan books to unregulated bodies. At the time it was stated, as has been restated by the Minister here, that it is the Government's intention to address the issue of the applicability of the code of conduct on mortgage arrears, and the protection afforded by the code, in the event of the sale of a loan book to an unregulated identify. Therefore, I am somewhat disappointed that we are still actively examining the matter with the Central Bank and the Office of the Attorney General.
I noticed that the Minister talked about legislation being prepared before 2015. I do not believe, and have said so on the record, that the INBS loan book should have been transferred before the protection was in situ. There is a lot of concern among mortgage holders generally that parts of a loan book, or any loan book, might be transferred to an unregulated entity, removing protection from them. As somebody who has practised law as a solicitor, I personally think it is contractually unfair to a person who borrowed from an Irish entity to find themselves in a position in which they do not have a protection they thought they had. That does not just relate to the code of conduct on mortgage arrears; it relates to a number of other factors, such as the level of interest to be levied. For an unregulated entity outside Ireland, the interest levied could be limitless and subject only to the rules on usury. I have an enormous concern about the matter and ask the Minister to deal with it urgently. It ought to be dealt with as soon as possible. I would prefer to see it dealt with before the summer recess and in this legislative term.
With regard to the code of conduct on mortgage arrears, I noticed that Members of the Lower House took the opportunity of the debate on this Bill to raise other issues that they had concerns about. We are acting as though the protection provided by the code of conduct on mortgage arrears is all that anybody in difficulty should look for. I wish to bring it to the Minister's attention, as I am sure he is probably aware, that the finance committee has had a lot of debate about the weaknesses in the code of conduct on mortgage arrears, particularly the determination of what a sustainable lending arrangement is and the lack of an independent appeals process. However, I shall save my concerns for another day.
With regard to the issue of competition, and the Minister's concern about generating competition in the mortgage market in Ireland, it is my experience that competition is something we should be very concerned about. At the moment banks are not lending and that is the reality in the mortgage market. Statements such as "Three out of four customers have been approved for a mortgage" hide the fact that mortgages are being approved but not handed out. I note that one mortgage lender recently blamed a lack of housing supply for the fact that it was not giving out loans. Therefore, I share the Minister's issues with competition. I am not sure they can be protected by the ICS platform, as he put it. More active measures will have to be promoted in that context.
I will move on to the second issue - Greece. As the Minister noted, the question was raised as to why Ireland did not receive the same type of full financial assistance as Greece. I very much accept what he said about the matter. Not only did we not seek it but we did not need it, which is a relevant point. I am a great believer in the European project and European solidarity, and it is critical that we support each other. We all saw how rating agencies were willing to pick off individual economies only too readily when they perceived weakness. The only way the eurozone can work to protect the euro as a currency is if we actively support each other, which is not just a matter of providing money to the Greek people. It is a matter of laying our cards on the table. We all know what the Greek people have endured and it is no laughing matter what has gone on in the Greek economy. I have a particular issue with the extent to which the Greek people were permitted to suffer and with what I perceive as a lack of solidarity in terms of that level of suffering.
I am concerned about the weak performance of the European economy at the moment. I note Ireland's performance is way ahead of a number of stronger economies. For example, Germany is currently experiencing a growth of 0.8%, France's economy is flat and the Italian economy is shrinking. There are real issues around economies in Europe, particularly the impact that the weak European economic performance is having on the Greek economy. Therefore, it is important to keep the level of financial support under review so we can ensure that the Greek economy returns to full growth.
In conclusion, I ask the Minister to take on board the comments made in this House and the other House on the need to secure the position of customers where a loan book is transferred to an unregulated entity. If at all possible, I ask him to move the matter up the legislative list of priorities and deal with it as soon as possible. We have very significant mortgage arrears issues in this country and I accept that they are being resolved. However, I would hate to see us dealing with it legislatively after the horse has bolted.