Paddy Burke (Fine Gael) | Oireachtas source

I welcome the Minister. I wish the Minister well in his chairmanship of the board of governors at the European Bank for Reconstruction and Development.

Over the past 20 years we have never seen such changes in banking circles and in banking products. It is a huge change for everybody. Quite a number of years ago, I told the Houses that a new, additional banking facility had opened in Castlebar. It brought to 14 or 15 the number of banking outlets in Castlebar, which at the time was a small town of some 16,000 people. This was 15 areas where a person could get funding or loans. Now we are seeing the opposite and the number of outlets where one can get finance is dwindling by the day, with closures of Ulster Bank and KBC and with a reduced number of Bank of Ireland branches. We have also seen huge changes in products and we have gone through the whole area of the tracker mortgage scandal.

In his speech the Minister referred to bringing in legislation to regulate the banks under the senior executive accountability regime programme, SEAR, which will be provided for in the Bill. This will bring accountability to staff and board members of banking institutions. Heretofore it seems to have been the four walls of a bank that was making decisions and not the personnel at all who were working in the bank. In the context of the Minister's speech, does he believe the Central Bank has failed in regulation over the last years? When I was a member of the finance committee we had to go fairly hard on the Central Bank to get it to interact with all the banks on the tracker mortgage scandal. It was a scandal that created an awful lot of hardship for many thousands of people. It put some people out of their homes. This is why I raise the question with the Minister.

On mortgages, I believe we should have 50-year mortgages. I do not see why any one family should have to pay back the mortgage in its time in a house over a period of 20 or 30 years. This could be extended to 50 years. The second family coming along or the next person to take over the house could continue on paying the mortgage.In light of the housing crisis and in view of the changing banking products that are available, a 50-year mortgage product should be possible. This is particularly the case now that banks and governments can borrow very cheaply, and for the long-term at that. There is no reason such products could not be designed, particularly for people who want to buy a home and possibly not pay the loan off over one generation but over a number of generations. I remember taking out a 20-year mortgage, as did everybody around my time. Before that, local authorities offered a 12-year mortgage or loan. There was no problem repaying the loan over that number of years but it is now an impossibility for young people starting off to repay a loan, even one taken out over 25 or 30 years. These are products that the Government and banks will have to look at.

I ask the Minister how the personal contract plan, PCP, financial product is working out so far? He is also bringing in legislation on that aspect of banking. In my view, PCPs create an expectation and place huge pressure on families to buy products and cars they may not be able to afford. I welcome that the Minister is looking into this area and will bring in legislation regarding it. There are many other banking issues I would like to speak on, particularly competition and how we sometimes have too little and at other times too much. We have too little competition at the moment and that will be a problem in future.