Gerry Horkan (Fianna Fail) | Oireachtas source

I thank the Minister and the Government for bringing the Bill to the House. Fianna Fáil, and Deputy Michael McGrath in particular, were instrumental in bringing it through the Dáil. I acknowledge that the Minister of State has thanked and congratulated Deputy McGrath for his work on the matter. As a former member of the finance committee, I know we talk regularly about vulture funds, as we refer to them. I will speak briefly as I hope we can conclude Second Stage by 3.30 p.m. today, get all Stages passed before Christmas and have the will of the people, and the will of the Lower House and Upper House, enacted as quickly as possible to provide protection for people.

I welcome the opportunity to contribute. As a party, we brought forward this Bill earlier this year to regulate vulture funds and to protect consumer rights with regard to mortgages that have been sold on. We believe that, by and large, banks should not be selling their loans to unregulated loan owners, or vulture funds, and should instead be working through their non-performing loan book. They are choosing not to do that and we have seen regular sales by many of the large institutions to get the loans off their books. As we know, many vulture funds are not interested in the long term or in protecting the homeowner. They want to get in, get an asset and get that asset in such a position that they can get the tenants out, get the owner out and sell the asset as quickly as they can for as much they can. We see this all the time.

People who have non-performing loans are very concerned. They may have fallen into distress, bought other properties against an original property, had a business that failed or lost their job. Perhaps two people in a marriage have both lost their jobs and have fallen into arrears. Relatively speaking, banks have been understanding in terms of forbearance, interest-only solutions and so on, but they are now using the European Central Bank and the Single Supervisory Mechanism, SSM, as an excuse to get rid of non-performing loans, rather than reducing them in their own way. They do not want the reputational damage of doing it, so they just pass it on to somebody else and let them take the hit. This Bill helps that situation somewhat in that it regulates firms that were operating unregulated within the market. We are on the side of the mortgage holder making an honest effort to pay their mortgage.

The central provision of the Bill is the requirement that a credit agreement owner, that is, a loan owner, must be fully regulated in the normal course by way of Central Bank supervision. This is the central plank of the Bill and is what we are seeking to achieve. Unfortunately, the Government has failed to fully protect borrowers who have found themselves in arrears, despite the majority of these borrowers co-operating with lenders. They insisted on letting the banks keep the veto despite a Bill on an independent mortgage resolution office being brought forward by Fianna Fáil.

It is not acceptable or good practice to allow vulture funds to be unregulated. We believe they should be regulated like any other lender because, otherwise, they are at a competitive advantage to all the other lenders in the industry. Senator Norris referred earlier to confidence and supply. There is a commitment in the confidence and supply agreement to provide greater protection for mortgage holders, tenants and SMEs whose loans have been transferred to non-regulated entities, or vulture funds. Ireland has had loan sales before from NAMA and from the liquidation of IBRC, Danske Bank and Bank of Scotland Ireland. Prior to 2015, there was absolutely no protection for borrowers whose loans were sold to unregulated vulture funds.

Many in the House, such as Senators Conway-Walsh, Kieran O'Donnell and the Minister of State, Deputy D'Arcy, were formerly on the finance committee and we heard many horror stories of how people were treated when their loans were transferred by the new owners, who made the lives of businesses, homeowners and landlords very difficult and awkward in terms of how they were trying to proceed. We heard stories of hotels and other businesses being refused planning permission, with people coming in to allegedly help with the business but really out to destroy it and to get possession of the business and get the existing owners out so they could sell it on for a fast buck.

It is helpful that this Bill has been brought forward. The bottom line is that loan owners who make the key decisions, like setting the interest rates and, crucially, deciding when to enforce a loan, were not being regulated but, hopefully, they now will be. The ECB had been asking banks to reduce the level of non-performing loans but that does not have to be done by loan sales and it can be done internally. However, the banks, including Permanent TSB, AIB and others, have passed on that responsibility and sold off these loans at a discount. Therefore, we have taken the hit again, as a State, given we owned much of AIB and Permanent TSB. They have passed on those loans at a lower value and the vulture funds then make money chasing the full loan and taking people out of their homes, even though this ultimately comes at a cost to us as we end up having to rehouse people. We have all heard stories of these entities buying properties cheap and getting rid of the tenants and homeowners.

It is very positive that we would get this Bill passed and I want it done as quickly as possible. It is important to realise that a significant number of people are in these categories, with 11,824 principal dwelling mortgages owned by unregulated loan owners and with 6,973 of these mortgages in arrears.It is welcome that the Minister of State is bringing it forward in Government time. All of us would like to conclude by 3.30 p.m. in order that we can get through Committee and Remaining Stages and I hope the Minister of State could commit to taking Committee and Remaining Stages before the recess in two weeks.