Brian Ó Domhnaill (Fianna Fail) | Oireachtas source

This amendment is at the heart of the issue of personal insolvency or indebtedness. The Bill provides that a debtor makes a declaration in writing that he or she has co-operated for a period of at least six months with the creditor who is a secured creditor and the mortgage is a secured debt. The difficulty here is that the banks are holding all the cards when it comes to the definition of "co-operation". The existing legislation holds that the banks have the right to decide whether the person who holds the debt has co-operated. It is not up to the individual to judge whether the bank is co-operating; it is the other way around. The banks have a clever system in place whereby they periodically send out automated letters to individuals through a computer system. If debtors do not respond to these letters, they may be deemed, after a period of time, to be not co-operating with the lender.

That is where the difficulty lies. The banks are taking individuals to court on the basis they have not co-operated even though, in many cases, those individuals are not aware of their obligations under the law. As noted by independent commentators, the banks effectively wrote the initial personal insolvency legislation to suit themselves and not the debtor. They hold all the aces in going to court and producing a paper trail to show an individual is not co-operating. How can debtors co-operate when it is the banks that decide what constitutes co-operation? In a case where a customer's mortgage repayment is €1,500 per month, say, but he or she can only afford to pay €300 or €400, the bank can refuse to accept that accommodation and the person is deemed to be not co-operating. It is totally unacceptable. Having initially gone after owners of second and investment homes, the banks are now moving on to family homes, as we saw in reports in the newspapers last week. Until there is a level playing field as between debtors and banks, we will not solve this issue. Of course there are defaulters and debtors who are playing games with banks, but that is an entirely separate issue. I am referring here to individuals who genuinely cannot afford to pay and where their bank decides they are not making a fair contribution. How dare banks demand that people reduce shopping bills and other necessary expenses in order to make full repayment?

I support the Sinn Féin amendment, which deals with a key area within the legislation. In so doing, I am not in any way pointing the finger at the Minister of State, who was not in office when the initial legislation was brought forward. That legislation was enacted by way of a rushed process wherein the Government facilitated the financial institutions to protect their own interests. That was wrong. We will not stand in the way of this Bill, but what is really needed is to go back to the drawing board. The banks are laughing all the way to the courts. They are rushing people out of their homes because they know property prices are increasing. People trapped in secured debt situations will lose their homes as a consequence of the banks' veto.