Seanad debates

Wednesday, 6 May 2015

2:30 pm

Photo of Rónán MullenRónán Mullen (Independent)
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I move:

That Seanad Éireann:- notes that Irish lending and credit institutions are increasingly appointing receivers over mortgaged property, either through the power of

appointment contained in the mortgage deed or under the provisions of the Land and Conveyancing Law Reform Act 2009;

- notes that the rules that apply to credit and lending institutions under the Central Bank consumer protection code do not set out any specific

provisions in relation to the appointment of receivers, nor are any guidelines for the appointment or conduct of receivers contained in the Mortgage

Arrears Resolution Process;

- further notes that there are no provisions in relation to the appointment or conduct of receivers in agreements covered by the consumer credit

legislation, namely the Consumer Credit Act 1995 and the European Communities (Consumer Credit Agreements) Regulations 2010 (SI 281/2010);

- expresses concern at the absence of robust statutory regulations to set minimum qualifications for eligibility to act as a receiver, to govern the

licensing of receivers and to establish acceptable norms of conduct and behaviour;

- notes with concern that no provisions exist in the Rules of the Superior Courts or the Circuit Court Rules to guide the Courts when making an order

appointing a receiver over a property so as to delineate the powers of the receiver or to provide for rules of conduct for any receiver when acting

on foot of any such Court order;

- calls for an investigation into the recently reported allegations of oppressive and bullying tactics of a receiver in County Kildare;

- welcomes and acknowledges the reported comments of the Taoiseach on 22 April 2015, wherein he stated that the Government would consider

introducing regulations to govern the appointment of receivers;

- resolves to protect mortgage debtors and the public from oppressive behaviour and conduct by unscrupulous receivers;and calls on the Minister for Justice and Equality to:

- acknowledge that the present lack of regulation in the law exposes indebted mortgagors to oppressive and wrongful conduct by receivers;

- further acknowledge that the present lack of any statutory code of conduct or licensing regime leaves the public at risk of abuse by unscrupulous


- develop and introduce robust statutory regulations governing the conduct of receivers appointed under the Land and Conveyancing Reform Act


- amend the Rules of the Superior Courts and the Circuit Court Rules to include new provisions regulating the conduct of receivers appointed by the

Courts; and

- liaise with the Minister for Finance with a view to directing the Central Bank to introduce new rules for lending and credit institutions regarding the

appointment and conduct of receivers.
I welcome the Minister of State at the Department of Justice and Equality, Deputy Aodhán Ó Ríordáin. The subject matter of this motion impacts on many people around Ireland who are currently indebted and at risk of having property seized by the bank on the appointment of a receiver. The purpose of the motion is to call on the Government, through the Minister of State's good offices, to act to curb the abuses and bullying which have been visited on members of the public by receivers appointed to seize property. I hope the motion will enjoy support across the House, particularly in light of comments made by the Taoiseach, reported on 22 April, that the Government will "look at regulating in this area." Ordinary members of the public have been subjected to disgraceful behaviour and intimidation by receivers and this is a matter which requires an urgent commitment to introduce regulations.

Colleagues will be aware that the banks are moving with gusto to repossess properties. It has been reported that the rate at which homes are being repossessed has increased by more than 500% since last year. Banks have a variety of options open to them to recover money and or property from a debtor where he or she is in default of payment terms in a loan. One such method is to recover the real property which is secured under the loan by the appointment of a receiver.

The motion deals with property receivers. Property receivers are often referred to as "fixed charge receivers". This title highlights the fact that they are appointed over fixed assets only. In this jurisdiction property receivers are appointed by the courts under the provisions of section 108 of the Land and Conveyancing Reform Act 2009 or under the terms of a mortgage deed. In the United Kingdom the industry reacted to the lack of standards by some individuals when undertaking a fixed charge or statutory receivership appointment. Those working in the area formed the Association of Property and Fixed Charge Receivers, NARA, in 1995. NARA states that it was formed "by a group of professionals from the property, legal and insolvency disciplines, who were often engaged in receivership appointments." In the United Kingdom, it was the people working as receivers who sought to root out the bad practices and the heavy handed tactics which had crept into the area. It was not the Government or the consumer protection regulators which were the first to act.

In April the Joint Committee on Finance, Public Expenditure and Reform was informed that one bank, AIB, had moved to repossess more than 5,700 homes in mortgage arrears by the end of last year. The striking aspect of these moves by the bank was the use of receivers. Of the 1,548 legal cases on buy-to-let properties, some 819 receivers had been appointed by the end of last year with 428 civil bills issued. Another 460 receivers were appointed by the bank between January and March 2015. While the focus has been on buy-to-let properties, there is nothing in law to prevent a receiver being appointed over a residential property. In regard to the moves by AIB we can expect other banks to follow the same course of action in the near future.

The problem in Ireland is largely one arising from the lack of regulation. Unfortunately, in a civilised society we cannot necessarily leave good conduct and prudential judgment to the better angels of human nature. I have spoken with solicitors and barristers practising in the area of debt and insolvency and they have told me that the problem is much more widespread than reported in the media. There is a thuggish and disreputable element which is content to exploit the lacuna in consumer protection legislation regarding the conduct of receivers.

One case I have been informed of involved a family business in north County Dublin. That family business consisted of a warehouse and a workshop which shared a yard with the family home. At midnight a van, full of what can only be described as thugs, arrived, broke into the yard and surrounded the family home while the receiver and his agent arrived behind them in a car and entered the warehouse to seize property as demanded by the banks. The receiver had clearly co-ordinated his actions with his team of hired goons.The family in question called on the Garda Síochána, only to be told that it was a personal debt matter and that it did not involve the criminal law. The team of heavies who arrived with the receiver were connected to a debt collection agency with links to a well-known Dublin criminal.

Another well-reported incident occurred recently at a property in Castledermot, County Kildare. In this incident, which was reported in the major national newspapers, a Kildare farmer, Mr. Paul O'Shea and his wife, were confronted by an outrageous display of intimidation. The receiver arrived at the family farm at about 2 a.m. reportedly with about 50 staff, some of whom were dressed with balaclavas and had German shepherd dogs. The mob arrived in ten large trucks, industrial loaders with tower lights, and a minibus. This cavalcade was also accompanied by three Garda vehicles.

I am sure that some Members might be tempted to take solace that the presence of gardaí was designed to ensure that the seizure of assets or property went off without any intimidation or violence. However, the very fact that such a convoy of men and machines arrived at a family farm in the middle of the night is, in itself, an act of intimidation and violence, and should raise serious concerns. It sets a sinister and disturbing precedent for intimidation tactics by receivers carrying out an order of the court. We are talking about people acting in a most unacceptable way with the indirect backing of the apparatus of State.

When informed of this incident, An Taoiseach stated: "Perhaps we should consider an amendment here which would regulate these court orders and ensure that they are carried out in more appropriate circumstances." He added: "We have evidence of extraordinary activity by personnel here. It is not right that people should arrive at 3 a.m. to do this." I wholeheartedly agree with An Taoiseach, but it seems to me that urgent action is needed. Not alone was there a regrettable act by way of a timeline commitment from the Taoiseach, but even the spirit of what he said seems not to have been reflected in the Government's amendment to my motion. Rather, it was abandoned. It is a rowing back and there is no sense of urgency. In fact, the Government amendment claims quite baldly that there is no compelling evidence that the sector requires the introduction of regulations to govern the conduct of receivers. How is that to be squared with the Taoiseach's apparent concern which was expressed recently?

There is a lack of robust protection for consumers in the law. Unlike the rules surrounding negotiations between banks and debtors over a mortgage or the detailed and extensive rules regarding consumer protection in lending contracts, the Central Bank has precious little to say regarding receivers or their conduct. For example, under the Central Bank's consumer protection code of 2012, a lender cannot phone or visit a person in connection with their loan, without their consent, between 9 p.m. and 9 a.m. on weekdays or at any time on a Sunday or public holiday. Furthermore, a lender is not permitted to call or visit a person at their place of work, unless all reasonable efforts to contact them elsewhere have failed. Despite the otherwise comprehensive nature of the code, there are no provisions regarding the manner in which a bank seeks to enforce the terms of a mortgage when appointing a receiver.

The Consumer Credit Act 1995, as amended, imposes extensive requirements as to the form and content of loan documentation, including documentation relating to mortgage loans, where a mortgagee is dealing with a consumer. It also imposes a duty on lending institutions to act fairly in commercial contracts, including mortgages with consumers, and prohibits misleading or aggressive practices. Again, however, there are no provisions relating to the appointment of receivers or their conduct, so what can be done?

Borrowers who are at the receiving end of a receiver require more robust protection both in the law governing the appointment of a receiver and in the court order governing the terms of their appointment. I insist that, despite what the Government's amendment says, the Government does have power to amend the law to provide for regulations, either under the Landlord and Conveyancing Reform Act or elsewhere in a piece of miscellaneous legislation.

These regulations to delineate the qualifications a receiver should have in order to allow their appointment, are nothing more than best practice in the UK. If a court order does not contain directions on how a receiver and his or her agents are to behave, we are effectively allowing them to act with impunity.

Under the Courts of Justice Act 1936, as amended, the rule-making authority of the rules committee is exercisable with the concurrence of the Minister for Justice and Equality. I ask that the Minister should request the rules committee of the Circuit and High Courts to craft new provisions surrounding the appointment of receivers. The result would hopefully be that such order, as is issued by the court, will delineate the rules surrounding the conduct of a receiver and his or her agents, as well as the usual particulars regarding the property to be seized. Enhanced court rules would guide judges in shaping orders to be made where a bank petitioned a court to appoint a receiver in order that, for example, the receiver would only be able to call to a property during ordinary business hours. There should be no more late night calls and no more than two persons, in addition to the receiver, should attend a property, unless a particularly weighty reason is given to the court to allow more people to attend, for example, to remove contents from a building.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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The Senator's time is up.

Photo of Rónán MullenRónán Mullen (Independent)
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I beg the Acting Chairman's indulgence to deliver two final paragraphs.

An order should be required setting out the maximum number of people who may attend a premises, if it is to be more than the receiver and two staff. The use of dogs, weapons or any other manner of intimidation should be banned. An order should be made that all those who attend a premises with a receiver make their identity known to the court and the borrower. There should be no concealed faces. The private security industry regulator, appointed under the Private Security Services Act 2004, obliges all security staff to wear identity badges when at work. The same principle should apply to receivers. If property to be seized is the family home or principal private residence, PPR, or adjacent to or abutting the family home or PPR, the receiver should be required to contact the occupants of the family home to make an appointment when he or she is to attend. The time should be agreed with the occupants in advance. If that is impossible, the court should appoint a particular time to be served in the notice to the occupants. No visit or seizure actions should be carried out outside that time and date.

The Minister of State should liaise with the Minister for Finance with a view to directing the Central Bank to introduce new rules for lending and credit institutions on the contractual terms governing the appointment and conduct of receivers under a mortgage. I am simply asking the Minister of State to concur with the spirit of what the Taoiseach has been saying and to accept that this is an area that badly needs to be subject o regulation in the public interest.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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I second the motion. As Senator Rónán Mullen said, we are talking about ordinary, decent, hard-working people who find themselves in severe debt. Members of the Government have held their heads low having inherited the problem of guaranteed bank loans. They have waited until the financial crisis has passed or, at least, have given the impression that it has passed to act and now we see a plethora of repossessions all over the country. The focus will quickly move from buy-to-let properties to residential properties and we can already see signs of this happening. Scare tactics, bullying and intimidation are commonplace. In some cases, one may see large, muscly men arriving at the door of innocent householders. It is not the sort of thing one associates with what should be regulated security organisations. The use of these mobs must stop. I am not satisfied by the case being made by the Government. I am asking that an inquiry be carried out immediately to see exactly what is going on. Let us have an investigation into the practices that have occurred to date.

Loans were given to people who had court orders for debts. I have come across one particular case where an attempt was made to repossess the family home, yet a loan was granted to a man who had two court orders for failing to repay a debt to the company that had given him a mortgage. Therefore, he had two court orders against him for unpaid debts in one part of an organisation, while another part of the same organisation had loaned him €180,000. That is difficult to explain.

As my colleague, Senator Rónán Mullen said, all communications should be made during business hours. The number of people turning up when repossessions take place should be controlled. The use of dogs or weapons is outrageous. It is like something we would have seen with the Stasi. On the concealment of faces, there is no reason anybody should wear a balaclava other than to intimidate. I fully support the notion that an appointment should be made. If the occupier of a premises is not willing to accede to the making of an appointment, a court order could be made setting the time of such an appointment.

There has been much talk about regulation by the Cental Bank.Some days ago I published a five-point plan with respect to some simple steps that could be taken to assist those in mortgage distress. My first proposal was a credit amnesty. Last night, I gave an example of a man living in Maam Cross being offered a job in Galway city. Not having a vehicle to get to Galway city, he needed to borrow money. However, because he has a mortgage arrear, he is without a credit rating. I am calling for a credit rating amnesty that would apply to anybody who has no loans other than a mortgage. If the mortgage is in distress, that should be ring-fenced and taken outside the credit rating.

My five-point plan also referred to certificates of affordability. Those who have jobs and who are trying to recover from the mess in which they find themselves, now spend significant time filling in large amounts of paperwork to meet the demands of a certificate of affordability for the banks. I am calling on the Government to appoint the Money Advice and Budgeting Service, MABS, or a similar agency to provide certificates of affordability that could be done in a person’s own time. This could be presented to the bank and presented as a de factoposition.

I also called for the need for a communications protocol. The Central Bank insisted a communications protocol should be in place for dealing with those in mortgage arrears. Communications, however, tend to be a telephone call and, if not one, several telephone calls over weeks and months. These calls always start with satisfying the security information to ensure the bank is talking to the right person. Then the customer is asked if they are aware they are in mortgage arrears, when they intend to make the next payment, how soon the bank can expect it, are they aware that if they do not make a repayment their house is likely to be repossessed. This does not smack of what I would call normal engagement with people.

I am looking for a dedicated customer contact before we ever get to the stage where receivers are appointed. The banks were quick enough to have personal relationship managers back in the days when there was money thrown around like confetti. We need personal relationship managers now to deal with the poor unfortunates who find themselves in debt to the banks. For those who find themselves in a position that they will never be able to repay the loan in their current circumstances, rather than throwing them out of their houses, we should use rent allowance to maintain them in their homes and take whatever legal steps to protect the family home and the Department which provides rent allowance.

As I found out myself in 1983 when I walked out of Galway with nothing but the clothes on my back having lost my own house, there is always a tomorrow. Things always turn. What we need to do is support people to allow them meet that turn and get away from these bullyboys who were going out under the guise of receivership.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I move amendment No. 1:

To delete all the words after ‘Seanad Éireann’ and substitute the following: recognises that:
- the level of mortgage arrears is a significant economic and social challenge and the Government is aware of the difficulties some borrowers are facing in meeting their mortgage commitments;

- the Government has already taken decisive action to address the mortgage arrears challenge and is committed to continuing to address this issue as a priority;

- the resolution of mortgage arrears continues to be an ongoing issue which is being addressed by a range of different Government and financial institution-led initiatives;

- the Statement of Government Priorities 2014-2016 recognises that high levels of personal debt continue to threaten to exclude thousands of individuals and families from the recovery and commits to the completion of a review of the implementation of the Central Bank’s mortgage arrears targets and the operation of the Insolvency Service of Ireland (ISI) and to the strengthening of the independent advice service offered to distressed borrowers;

- the vast majority of mortgage holders are meeting their repayment commitments; and

- receivers are not appointed in respect of principal dwelling houses but may be appointed in respect of buy-to-let or other commercial properties;
acknowledges policy interventions that have been undertaken, including:
- the Personal Insolvency Act 2012 and subsequent waiving of ISI application fees in 2014;

- the provision of the Mortgage Arrears Advice and Information Helpline; and

- the provision of independent financial advice for borrowers on the terms of restructure arrangements offered to them by their lender;
- the fact that engagement between borrowers and lending institutions has resulted in almost 115,000 sustainable restructure arrangements being put in place, as also indicated by the CBI December 2014 data;

- the initiatives by lenders to provide borrower-focussed debt restructuring solutions; and

- the improved take-up of ISI services in 2015 and the fact that the majority of ISI solutions result in successful outcomes for the borrower, as evidenced in the ISI statistical bulletin for Quarter 1 2015;
notes that:
- the Government has put in place a broad strategy to address the problem of mortgage arrears and family home repossessions, which has included an extensive suite of interventions designed to address the problem including specific Central Bank targets for the banks through the Mortgage Arrears Resolution Targets (MART), the Code of Conduct on Mortgage Arrears, extensive recasting of the personal insolvency legislation, the provision of advice through Department of Social Protection-led initiatives and the Mortgage to Rent Scheme;

- given the personal distress caused by over-indebtedness, the effective management of the mortgage arrears issue remains, however, a policy area, by necessity, under continuous review and that more and concerted action by the banks can be undertaken to assist customers in arrears and to improve the uptake of personal insolvency solutions;

- the Banking and Payments Federation of Ireland has produced a helpful ‘Residential Tenants’ Guide to Receivership’, which provides appropriate information to tenants affected by the appointment of a receiver to a buy-to-let property;

- receivers are generally appointed under the terms of the mortgage deeds made between the lenders and borrowers and are sometimes called a ‘receiver of mortgaged property’ or a ‘receiver of rent’;

- receivers are not appointed in respect of principal dwelling houses but may be appointed in respect of buy-to-let or other commercial properties;

- there is no compelling evidence that this sector requires the introduction of regulations to govern the conduct of receivers;

- it would not be appropriate to use the Land and Conveyancing Act 2009 as a vehicle to introduce such regulations as that Act deals with substantive land and conveyancing issues and is not the place for regulating the conduct of parties to lending and conveyancing activities; - the Minister for the Environment, Community and Local Government proposes the introduction of an amendment to the Residential Tenancies Act 2004 that will help to bring greater clarity in this area and will be of benefit to tenants and receivers alike. The proposed amendment will provide that where a person is appointed as a receiver to carry out the functions and exercise the powers of a landlord under a tenancy, that person will be considered to be the landlord for the purposes of the 2004 Act; and

- the making of Court Rules are a matter for the Courts Service and the relevant Court Rules Committees and not for the Minister for Justice and Equality;
and calls for:
- the Government to continue its work across the relevant Departments and Government Agencies to consider all options to strengthen the mortgage arrears framework in order to ensure that families can, where possible, remain in their home and to encourage all lending institutions to work with it to deal with the mortgage arrears problem, with a view to making an announcement on this issue in the coming weeks; and

- the Government to keep the matter under review.
I welcome the Minister of State to the House. In listening to my colleagues and their testimonials, it is very hard to disagree or argue with most of what they said. Senator Mullen spoke about receivers turning up with dogs and all sorts of crazy things. Nobody, from the Taoiseach to the Minister, would support those kind of actions. That type of behaviour is reprehensible. I call again on those who have to repossess properties to do it appropriately and have common decency. We should not have to legislate or amend Acts to facilitate common decency. The majority in the debt-collecting business do it with as much empathy as they possibly can, by appointment and appropriately. Unfortunately, there is a significant minority which does not aspire to that kind of conduct or ethical framework with which we expect all our citizens to be treated.

The Government’s amendment embraces much of how we all feel on this issue.

Photo of Mark DalyMark Daly (Fianna Fail)
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I am afraid not.

Photo of Martin ConwayMartin Conway (Fine Gael)
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Fianna Fáil was in government for 15 years. What did it do about it?

Photo of Mark DalyMark Daly (Fianna Fail)
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That is not much help to anyone facing a receiver.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I did not interrupt Senator Daly.

Photo of Pat O'NeillPat O'Neill (Fine Gael)
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Senator Daly will have his chance.

Photo of Martin ConwayMartin Conway (Fine Gael)
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Senator Craughwell spoke about his own personal experience of repossession. I agree with him that there is always a tomorrow. That tomorrow will come is an important message to get out to people. Unfortunately, for some of our citizens because of the way they were treated by their creditors, they did not see a tomorrow and took a different course of action. That has happened far too often as a result of this crisis.

That said, the Government may have been slow to realise the mortgage arrears situation but it does now. Proposals are being put together to take a mature, sensible and long-term approach to dealing with people in arrears.

Photo of Gerard CraughwellGerard Craughwell (Independent)
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What about short-term proposals? We need those.

Photo of Mark DalyMark Daly (Fianna Fail)
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Long-term? Jesus, that is a lot of help.

Photo of Martin ConwayMartin Conway (Fine Gael)
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I did not interrupt any of the two gentlemen opposite. If they wish to continue interrupting me, that is entirely up to them. I showed them the courtesy of not interrupting either of them and, as a matter of fact, agreed with practically all of what they said.

Of course short-term solutions are required as well. Many with buy-to-let properties are doing everything they can to interfere with the process, using delaying tactics and every type of a loophole in legislation and otherwise to ensure they can hold on to their assets. In some cases, they are collecting rent from the properties in cash and not writing down their debts.

I am more interested in the personal or family home. No Member wants to see people being put out of their own homes. That is an absolute last resort. However, when one has a situation where people do not co-operate, engage or discuss options with their lenders, there comes a point where, unfortunately, it is a last resort. It always will be a last resort. The mature action we can take tonight is to work together.

In my four years here, this House has a proud reputation of working together on issues of national importance. This is an issue of national importance. I commend the Senators opposite on highlighting it. The more it is highlighted, the more exposure it gets and the more likely we are likely to get sustainable, short-term, medium-term and long-term resolution.

I find it regrettable that I was interrupted on more than one occasion for what I consider were non-argumentative comments. However, some Members choose to do that. It is a practice in which I do not engage.

Photo of Mark DalyMark Daly (Fianna Fail)
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The reason I interrupted was because the proposals put forward by my colleagues on this side of the House are entirely suitable and appropriate.

Photo of Martin ConwayMartin Conway (Fine Gael)
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Senator Daly is an expert in interrupting.

Photo of Mark DalyMark Daly (Fianna Fail)
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The amendment put down by the Government side is at variance with what Senator Conway has just spoken about, however. It states “there is no compelling evidence that this sector requires the introduction of regulations to govern the conduct of receivers”. There was the case of Paul O’Shea in County Kildare where the receivers had Alsatian dogs and wore balaclavas. This was reminiscent of what the RIC, Royal Irish Constabulary, did when it evicted people 100 years ago.

Photo of Mark DalyMark Daly (Fianna Fail)
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This is not an isolated incident; this is what happening now. This long-term solution is not a solution.

When the Minister for Justice and Equality brought in legislation for the mortgage arrears issue, there were going to be insolvency agents and practitioners. However, any solution that could be put in place could be vetoed by the banks. Somehow or other as Senator Mullen said, asking banks and receivers to look towards the better angels of their human nature is at variance with what banks and receivers do. Receivers and banks make profits. They do not act in the best interests of anyone only the laws of profit. For my colleagues opposite to claim there is no need for regulation when people are arriving at houses with balaclavas is defying the facts. Colleagues opposite claimed there was no need to ensure that the banks did not have a veto, but now the Government is suggesting taking away or curtailing the banks' veto in order to force them to do what people on this side of the House and people in the Irish Mortgage Holders Association said was necessary. Once a bank is given a veto, the bank will use the veto. As a result people have been evicted from their houses and the taxpayer is footing the bill in order to find accommodation for people who have been evicted.

Part of the amendment basically commends the Government on its work. It states that the Land and Conveyancing Law Reform Act 2009 is not the appropriate means to address this issue and proposes an amendment to another Act, the Residential Tenancy Act 2004, as the way to proceed. All of that counts for nothing because of the Government's intention to keep the matter under review. This is while the men with balaclavas are arriving at 2 a.m. Does that sound like something that needs a long-term solution? The solution is required now. There is no regulation. The reason no regulation was introduced ten years ago was that there was no need for it because receivers were not arriving with balaclavas, but they are doing so now.

Today we will get a reply written by the same people who probably wrote the reply when I asked how many times the former Minister for Justice and Equality met representatives of the banks to discuss the veto by the banks in personal insolvency legislation. The former Minister would not answer the question. I put it to him that the banks wrote the legislation. I asked for the minutes of the meetings he had with the banks. The banks wrote the legislation to allow them to veto solutions for mortgage holders in arrears.

A year and a half on, we have a crisis. It was entirely predictable and here it is. Let us predict another crisis, but in fact it has already arrived. These institutions are acting like thugs, coming in the night, not as they should under regulations. The word "guidelines" is has been used. That is all they are and nobody has to observe them. They can ignore them and tear them up. That is not good enough. There need to be consequences. People must abide by law and regulation. This is the wild west of taking property from people. There is no law. An international financial newspaper once described Ireland as the wild west of banking. That was predicted ten years before the crash and what happened is exactly what happens when there is no regulation. The banks did what they do. They make a profit. They all get a bonus and all walk off with their pensions leaving the taxpayer to pick up the tab.

What happens when there is no regulation dealing with the issue of people taking property? At least the RIC used to show up in daylight. Police officers would knock down the door. There was law and it was not on the side of the people. However, now there is no regulation and those concerned can show up at any hour of any day and do what they want, aided and abetted by gardaí. Gardaí observe while the mercenaries bulldoze down people's doors and take their property.

The Government will keep the matter under review. That will be of great solace of those who are woken in the middle of the night. I am tired of hearing my colleagues opposite bemoaning that some of the receivers have sent in thugs, it is terrible and we should do something. The place to do it is here and the time to do it is not in the future but now. However, the Government will keep the matter under review.

The Minister of State will not be happy with some of the wording of the amendment which states that, "there is no compelling evidence that this sector requires the introduction of regulations to govern the conduct of receivers". However, we read about it in the newspapers. Action is, of course, required now. After the Minister of State gives his response I ask him to bring it back to his colleagues and let them know that action is required now.

Photo of Aodhán Ó RíordáinAodhán Ó Ríordáin (Dublin North Central, Labour)
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On behalf of the Minister for Justice and Equality, I welcome the opportunity to discuss the topic of mortgages and receivers.

This issue forms part of the overall context of mortgage arrears and it should be recognised that things are improving in this area. There has been a welcome increase in engagement between borrowers and lenders which has resulted in over 115,000 sustainable restructured solutions being put in place. In addition, this year we have seen an improvement in the numbers of people availing of the services provided by the Insolvency Service of Ireland. It should be acknowledged that the majority of solutions reached through the ISI have resulted in successful outcomes for the borrower.

The Government recognises that the level of mortgage arrears is a significant economic and social challenge, and is acutely aware of the difficulties some borrowers are facing in meeting their mortgage commitments. The Government is committed to continuing to address this issue as a priority.

The Government is fully aware that high levels of personal debt threaten the participation of individuals and families in the current economic recovery. We have already taken decisive action in a number of areas in order to assist people in mortgage arrears difficulties, such as the introduction of the personal insolvency legislation; the provision of the mortgage arrears advice and information helpline; and the provision of independent financial advice for borrowers on the terms of the restructure arrangements offered to them by their lender.

The Government is currently reviewing the operation of personal insolvency legislation and the independent advice service offered to distressed borrowers with a view to strengthening those initiatives. In addition, the mortgage to rent scheme - under which the borrower surrenders the property to the lender who then sells the property to an approved housing body which then becomes the landlord allowing people to stay in the family home - is being reviewed with a view to improving the scheme to ensure that it is available in suitable cases.

As Senators will be aware, the Government has already made it clear that it will shortly be announcing a package of measures to support the existing framework and improve the uptake of personal insolvency solutions. The overall aim of the Government's approach to this issue remains the same as it has always been, which is to ensure that a full range of options is available to distressed borrowers and to keep as many people in their homes as possible.

The appointment of a receiver over mortgaged property is one of the remedies available to a lending institution in cases of mortgage default. It is important to note at the outset, however, that this is a remedy that applies in the main to commercial property, which may include buy-to-let residential property and farmland. It does not, therefore, apply to the principal dwellings of defaulting borrowers. It is important to bear in mind that the properties to which receivers are appointed are not those covered by the Central Bank's code of conduct on mortgage arrears which seeks to ensure that lending institutions act in a scrupulously fair manner and exercise appropriate forbearance, in the case of principal dwellings.

The appointment of a receiver is normally an alternative to the lender seeking actual repossession of the mortgaged property. Instead of taking possession, a receiver is appointed to manage the property. In the case of a shop, restaurant or licensed premises, the goal may be to achieve more efficient management and operation of a viable business; in the case of buy-to-let residential property, the intention is more often to collect rental income produced by the property and to divert it towards servicing the mortgage.

A power to appoint a receiver in cases of mortgage default is set out in section 108 of the Land and Conveyancing Law Reform Act 2009. It largely reproduces a much earlier provision on the same lines in the Conveyancing Act 1881. These powers are exercisable by the lender without recourse to the courts. In such cases, the receiver's role is limited to receiving income produced by the mortgaged property. The receiver is generally also required to manage the property.

The mortgage contracts applicable to commercial property loans normally contain more detailed contractual terms concerning the appointment of receivers. They may, for example, grant the receiver more extensive powers, such as power to manage the property, lease it or sell it. These provisions form part of the terms and conditions on which the loan is granted by the lending institution concerned and, again, may be exercisable without recourse to the courts.

While the Private Members' motion refers to the lack of regulation exposing borrowers to oppressive and wrongful conduct by receivers, I am not aware of any widespread concerns over the matter. Receivers are normally accountants or solicitors and are subject both to the regulatory and disciplinary regime applicable to their professions and the law of the land. I do not, therefore, accept the notion that the lack of a specific licensing regime leaves the public at risk of abuse by unscrupulous receivers.That said, the Minister is aware from media reports - this has been referred to by Senators and in the Dáil debate recently - of particular cases in which tensions appear to have arisen where receivers are seeking to take control of mortgaged property. These appear to be isolated exceptions to the general behaviour of receivers. Let me make it clear that the Minister condemns the use of heavy-handed actions by receivers in this type of instance and deplores the use of men with dogs and balaclavas turning up in the middle of the night to effect a repossession, as highlighted in recent reports.

The Minister is conscious that the appointment of a receiver over mortgaged property is likely to be both traumatic and stressful for the borrowers involved or any tenant who may be living in the affected properties. In many cases, their hopes and dreams of building a successful business for themselves and their children may have been dashed by events beyond their control. In other cases, what seemed at the time like an attractive investment opportunity has not been a success and the lives of many are badly affected as a result. The Minister, therefore, urges receivers to act with tact and consideration and to avoid heavy-handed actions. They must act within the limits of the laws governing their appointment when exercising their powers. The provision of adequate information on their role and statutory tasks for those likely to be affected is particularly important. In this context, the Minister notes that the Banking and Payments Federation Ireland has produced the helpful A Residential Tenant's Guide to Receivership which provides appropriate information for tenants affected by the appointment of a receiver for a buy-to-let property. The provision of a similar guide to cover other cases of receivership would, the Minister believes, be helpful and I understand she intends to write to the federation in this regard.

Receivers must act within the law of the land. The proceedings in which they take control of property are, first and foremost, civil proceedings to which the Garda is not a party. There may be situations where gardaí become aware or are notified that property is to be the subject of enforcement proceedings and, in these circumstances, it is an operational matter for Garda management to assess whether a Garda presence is advisable so as to prevent any risk of a breach of the peace. Preserving public order is an essential task of An Garda Síochána, whether in circumstances relating to repossession, the appointment of a receiver or otherwise. Where gardaí attend in these circumstances, it is important to understand they do not generally have a role in the process itself and are not in a position to act in any way as an arbiter in the proceedings. There may be some confusion on this point in the public mind, but this is the legal position and the Garda is very clear about this when present in such circumstances. Issues of difference or difficulty in the enforcement of a court order or contractual obligations between parties are matters for the parties concerned to resolve before the courts.

Tensions can also arise where, for whatever reason, attempts are made to obstruct receivers in discharging their duties. Where a breach of the peace occurs in such cases, provisions in public order and related legislation are applicable. Similarly, where an individual has concerns that a criminal action may have been committed by any person in the course of such proceedings, this is a matter which An Garda Síochána will investigate.

The Minister appreciates the intent behind this private Members' motion but considers that it must be opposed, mainly because the remedies put forward in the motion cannot be put in place. I note that the motion calls on the Minister to amend the rules of the superior courts and the Circuit Court to include new provisions regulating the conduct of receivers appointed by the courts. The general position is that court rules are made under the relevant statutory provisions by the respective rules committees, not by the Minister for Justice and Equality. It would not be appropriate, therefore, for the Minister to intervene in the manner suggested in the motion. In addition, the House should note that where a receiver is appointed by a court, he or she becomes an officer of the court, is answerable to the court and required to act in the interests of all the parties involved. Again, the Minister would not have any function in this area.

The Minister is aware that there is the possibility that a receiver appointed over a mortgaged property is not a member of a regulated professional organisation and, therefore, not subject to the codes of conduct and ethics which would apply if he or she was a member. In such a circumstance the Minister believes it would be reasonable to put in place some rules and regulations governing their actions. For that reason, she has asked me to inform the House that she will be undertaking an analysis of the issue to examine whether further regulations should be introduced to govern the conduct of receivers. This analysis will, inter alia, examine the remedies put forward in this private Members' motion. The intention is to produce a report for discussion at the Joint Committee on Justice, Defence and Equality to allow the committee, on the basis of the analysis and its own examination of the issues involved, to consider what recommendation it would make as regards action to be taken.

I again thank Senators for raising this issue. I look forward to listening to the rest of the debate.

Photo of Kathryn ReillyKathryn Reilly (Sinn Fein)
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I welcome the Minister of State. I thank my fellow Senators for raising this timely and concerning issue in the House. Sinn Féin agrees with the motion which it will be supporting. The receiver issue is the inevitable result of the crisis, not a crisis in and of itself. The bigger issue concerns the policies which have made the receiver king-like. Since 2011, when the Government was elected to office, we have seen the repossession crisis come to a head. Banks have started to repossess many family homes. The changes to the code of conduct on mortgage arrears have allowed banks to exert more pressure on home owners. The Government saw fit for the banks to be the moral arbiter and decide what was a sustainable solution for mortgage holders in arrears. The changes to the code of conduct on mortgage arrears allow banks to preside over a customer appeal, instead of referring it to an independent adjudicator. We have seen the weakening of services such as the MABS and the Legal Aid Board which could help borrowers in distress. The Government has brought forward insolvency laws which gave banks a veto over reasonable arrangements and allowed them to count repossession as a solution to the overall problem. Furthermore, we have the completely failed mortgage-to-rent scheme which in some counties has had no participants. The list, as many agree, is endless.

The Government has completely failed to protect mortgage holders such as those with IBRC and others from vultures. The use of vulture funds to take over the loan books of banks or NAMA properties is the dirty little secret. Worst of all, we have seen the removal of the protection of the family home in law. When we see a motion such as this before the House, Sinn Féin will support it, but it is incidental. If we go to the root cause of unscrupulous receivers, inevitably we will end up back with the banks, which is where this issue needs to be resolved.

The huge increase in the number of repossessions is a disaster. It is a crisis which has been facilitated and accepted by the Government which accepted the policies that created the crisis. The shocking number of family homes being repossessed is down to policies that have been pursued. These policies have created the environment in which hundreds of repossessions can take place and no amount of hand wringing is going to change this fact.

We opposed the removal of the effect of the Dunne judgment and proposed instead a better replacement. My colleague, Deputy Pearse Doherty, tabled legislation in the Dáil which would have protected the family home, proposed fair solutions and an independent body to force banks into accepting reasonable arrangements, but it was voted down. That was a shameful day for the Government and every backbench Deputy.

As a party, we opposed the softening of the code of conduct on mortgage arrears. At the time we said the Government was letting the banks off the leash. Unfortunately, that has been proved to be correct. We have proposed an independent resolution mechanism, whereby an independent body would mediate and broker an agreement between banks and customers and, crucially, be able to force the banks to accept a reasonable proposal. We want to see the personal insolvency Act amended in order that banks could not veto arrangements where a mortgage was involved. Opposition Deputies, Senators and groups working with those in debt have been calling "Stop" for years. Unfortunately, the Government is ploughing ahead and doing the banks' bidding.

As an election approaches, we hear the Government state it will take action. For many, these are empty promises and of no use to the hundreds of people who have already lost their homes or who will find themselves in the next couple of weeks being brought before the courts. They fear that it might be their home next. We need genuine and encompassing legislation to protect mortgage holders in arrears, not just empty rhetoric.

I again thank my fellow Senators for raising this important issue about receivers. Sinn Féin will support the motion. However, we need to tackle the big issue, which is repossessions.

Photo of Aideen HaydenAideen Hayden (Labour)
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I thank Senators Rónán Mullen and Gerard P. Craughwell for raising this issue. I have raised the issue of receiverships and their conduct in the House a number of times. Although he is not present in the Chamber, I also thank Senator Sean D Barrett for raising this matter on a number of occasions. In particular, he has raised it with the Minister for Finance in respect of the treatment of tenants in buy-to-let properties and the issue of the lack of a code of conduct on the treatment of tenants in properties.

I wish to address some of the issues relating to the specifics of the motion. We need to remind ourselves what it is about. It is about receiverships. In essence, the Minister of State is correct in that it does not concern, in effect, principal residences. One of the things that concerns me about the debate so far is that there have been many references to family homes in the context of owner occupied mortgaged properties but not in the context of rented homes.We need to be very clear. One Irish family in five lives in a rented home. It is a sector that has been growing substantially. These are family homes and if any family living in a rented home is told that it is not its home and that it is not entitled to protection, I would like to be standing beside the person who is saying this to it.

I am not entirely happy with the Government's amendment to the motion. It does not refer to the issue in hand, namely, receiverships, but instead talks in general about mortgage arrears. It is most welcome that the motion has been put forward. I went to the trouble of obtaining a legal opinion on what was being proposed and there are issues with the motion, as drafted. I could spend some of my time going into these issues, but if he wishes, I can supply Senator Rónán Mullen with a copy of the legal opinion at the end of the debate. One of the issues that concerns me most is what can or cannot be done with the law as it stands. One of the points that may have been missed in the motion takes into account the fact that most receiverships concern buy-to-let properties which are rented as homes. We should remind ourselves of the extent of the problem we face. There are approximately 40,000 buy-to-let properties - approximately 25% of the entire rental market - in mortgage arrears for more than 90 days. To date, approximately 7,000 receivers have been appointed for buy-to-let properties. I could not possibly accept the notion that there is no compelling evidence that the sector requires the introduction of regulations to govern the conduct of receivers. That suggests we have had no difficulties with the appointment of receivers for buy-to-let properties.

With this in mind, I will refer to a case study in Threshold's annual report 2013. At the time of its publication, a far lower number of receivers had been appointed for rented properties - the exact number was 503. The case involves Maria, who had been living in a rented house for five years with her four children when she received a letter addressed to "the occupier". She tried telephoning the landlord, but there was no answer. As a result, she put the letter to one side and thought no more about it. A few days later there was a knock on the door while she was getting her children ready for school. Two men told her the landlord was not paying the mortgage and that they were now taking over the property. They thought nobody was living in it and told Maria that she had to pack up and that they would be back later that day. This is an unusual case, one Threshold does not deal with on a daily basis.

I have raised the issue of receiverships on a number of occasions with representatives of every one of the principal banks when they have come before the finance committee. In fairness, all agree that there is a need to regulate the actions of receivers.

Photo of Aideen HaydenAideen Hayden (Labour)
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I welcome the Minister's comments that she is willing to take this on board. I am certainly willing to make a submission to an inquiry. There is definitely a scenario where there is a particular concern about the behaviour of receivers which, in many cases, flaunt the law on illegal evictions. They have put people on the side of the road. In one case I know of a woman was put on the side of the road three days before Christmas, with her stuff in black plastic sacks. Let us be clear about what needs to happen.

Photo of Rónán MullenRónán Mullen (Independent)
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The Minister has not taken that point on board.

Photo of Aideen HaydenAideen Hayden (Labour)
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On a positive note, I welcome the commitment of the Minister for the Environment, Community and Local Government, Deputy Alan Kelly, to amend the Residential Tenancies Act 2004; in other words, all of the rights a tenant has under that Act 2004, including being given adequate notice, having a property maintained and a deposit returned, would be seen as the obligations of a receiver appointed for a rented property. This would improve the position enormously. I very much welcome, therefore, the Residential Tenancies (Amendment) (No. 2) Bill which will bring about this change in the law.

I am very happy that the Minister of State has accepted what has been said. I thank Senator Rónán Mullen for raising the issue. It is important to take on board the changes proposed to the Residential Tenancies Act 2004 with respect to the issues for tenants in buy-to-let properties.

Photo of Tony MulcahyTony Mulcahy (Fine Gael)
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The tone of the motion deals with receivers as enforcers and nobody would condone such behaviour. I will not start by saying it is okay. The two Senators have outlined two cases, but will they confirm if they concern private or commercial dwellings? I seek clarity on what is being debated. If they do not wish to indicate whether the properties are private or commercial, will they name the accountants or solicitors involved in both cases?

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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I cannot encourage them to do so.

Photo of Tony MulcahyTony Mulcahy (Fine Gael)
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It is important that we know who and what we are talking about. If somebody reads a newspaper story, he or she can play it in any way he or she likes. The Government has opened various avenues to tackle the dire mortgage issue, as Senator Aideen Hayden indicated. I thank her for her contribution. I will not say everything the Government has done is great or wonderful and that we will dig our way out of this hole. We are not doing enough, as I said to the Minister for Finance, Deputy Michael Noonan, 20 months ago when he introduced the insolvency legislation. I asked him what would happen if the banks did not tell the truth, act responsibly or try to help? Many people who are losing their homes seek social housing support. Although I use the term cautiously, they again become a burden on the State. I do not mean that in a bad way.

We have bailed out the guys who are putting people out of their houses. We must seriously consider having a veto. It is not often that I agree with my colleague, Senator Mark Daly, but we are cut from the same cloth some of the time. The absence of a veto is the problem, as Senator Kathryn Reilly said. We need an independent assessment body that would instruct the banks and this would involve a veto.

The bankruptcy period should be reduced to one year. We did a "Paddy" job when we reduced the period from 12 years to three, whereas in England, America and everywhere else there is a one-year period. We need to revisit that issue and if we are to put manners on some of the banks, that is how we should do it. I have two clients who were hopelessly in debt on commercial properties. I advised them to take the bankruptcy route. I am thankful that both of them are in a better place today. That is the methodology that should be used to deal with the problem. If there are bodies which are acting through solicitors and accountancy firms, they should be reported to the accountancy and legal bodies. That is where we should start. I would have no problem in naming and shaming the fellows who show up with dogs and wearing hoods. We need to have the courage to name them.

I welcome the Minister of State's contribution and the fact that the Minister will examine the issue. However, the Minister and the rest of us who are members of the Government parties need to do a little more than examine this issue and the mortgage crisis. My parliamentary party was promised a statement six or eight weeks ago, but I have not yet heard it. I would like to hear soon how we will deal with this issue. Senator Mark Daly has said the crisis is being experienced now. I would not in any way rely on the banks we bailed out to offer any solution. They must be told what to do and made do it. That is the only way to deal with the matter.

Photo of Colm BurkeColm Burke (Fine Gael)
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I welcome the Minister of State. In talking about receivers or liquidators it is important to state they must at all times act within the law. If they act outside it, action can be taken. I know that the Garda in co-operating with receivers will ensure they will at all times act not only within the law but also within the terms of a court order. That is important.It is not a case of receivers going in without the necessary backup in terms of legal documentation. If the documentation is not in order, they are in breach of the law.

Senator Mark Daly overlooked the point about why we were in this situation. It is because decisions were taken about lending which should never have occurred. I came across one example where a relationship had broken up and the girl had decided to hold onto the house. There was a €220,000 loan, but she did not have the capacity to repay it at any stage. To buy out her partner, a further €40,000 was borrowed and the father agreed to be guarantor for that sum. When I came across the problem, however, he was acting as guarantor for the full €260,000 without realising he had done so. We have had such cases where people were asked to sign guarantees. I have raised with the Department of Finance and the Department of Justice and Equality the issue of whether we should introduce regulations under which someone could not offer the family home as security for a commercial loan. That is one of the reasons we have ended up with this problem. I was surprised by the number of people who had had their spouses sign guarantees for commercial loans and, as a result, had put the family home under threat. There was an interesting case which involved a credit union in west Cork that had tried to take possession of a family home, but the High Court had refused to make the order. The husband had taken out a €500,000 loan to purchase development land, but it was devalued once there was a downturn in the market. The credit union then went after the family home. There were two families involved. The High Court decided that as the wives had not signed any documentation and even though credit unions had judgments against the borrowers, it would not allow these judgments to be used to take possession of the family home. When the family home is involved, the money borrowed should only be used in that respect and not for commercial loans. We need to seriously consider and deal with the issue of such loans.

Much emphasis has been placed on a heavy-gang being involved in repossessions. I have come across cases where it was necessary to take repossession, for instance, where people living outside the jurisdiction were collecting rents through agents, yet making no repayments to banks. At the same time, they had the gall to let these properties to innocent people. One family had moved from Dublin to Cork where they rented a property. They were there three months and their children were attending a local school when they suddenly found the sheriff knocking on the door. Even though there were judgments against the person who owned the property, the tenants had not been so advised. The bank had then obtained an order for repossession. If we want to protect tenants, we should examine the issue of tenancy. Why is it that we do not have sufficient protection for tenants? In other European countries there are 20-year leases and tenants are protected no matter who owns a property. We need to do that here. That is what happens in the case of commercial properties and where there is a lease and tenants can be protected. I do not see why we cannot do the same in the case of rented property. Many people with young families now have no option but to rent. We should, therefore, re-examine tenancy legislation to ensure that, regardless of who owns a property, the tenant is protected. If there is an order for repossession, the bank can take it over, but it should not move a tenant out if it is his or her family home and he or she has no other place to go. We need to examine this important issue.

It is wrong to say receivers act in a heavy-handed manner all the time. They must act within the rules and if they breach the law in any way, they are accountable and cannot overuse their powers. The law should be properly interpreted by receivers who cannot exceed their jurisdiction. I am in favour of the Government's amendment, but we need to protect tenants where families are involved.

Photo of Diarmuid WilsonDiarmuid Wilson (Fianna Fail)
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I welcome the Minister of State back to the House. I commend Senators Rónán Mullen, Gerard P. Craughwell and Feargal Quinn for tabling the motion. As we are all aware, the ongoing debt crisis is continuing to dominate the lives of countless people across Ireland. Unfortunately, the Government's personal insolvency legislation has been a failure to date, with an abysmally slow take-up.

It was interesting to hear Senator Tony Mulcahy's contribution and I agree with every single word he said. I am amazed to say I also agree with everything Senator aideen Hayden said. I apologise I was not present for other colleagues' contributions because I had a meeting to attend.

We have a difficulty with receiverships. As colleagues outlined, a receiver can be appointed for a property by a court or under a mortgage deed. That is fine if it is necessary to do so where every attempt by a financial institution to regain the money loaned has failed. It is sometimes as a last resort, but it is also used as a first resort by financial institutions.

I have been a Member of this House for almost 14 years and in that period the issue of receiverships and financial institutions' repossessing machinery has been raised from time to time. I have raised it myself. Since the financial tsunami hit this country, finance companies and other financial institutions have, unfortunately, become a law unto themselves. I am aware of many cases where bully boy tactics have been used to recover machinery and other goods from decent people who, in some instances, have paid over 90% of the money back, yet late at night or in the early hours of the morning people who can only be described as thugs arrive and use force to take back that machinery or property. The way receivers conduct themselves in some instances, although not in all, leaves a lot to be desired. Regulation is urgently needed.

The Minister of State should ask his senior Government colleagues to examine another aspect of receivership. I am aware of cases where property had been up for sale prior to the receiver taking control of it. It was sold for far less than it was worth before the receiver took over.That is happening wholesale throughout the country. We have heard about Siteserv and all these other things happening, but on every day of the week throughout the country banks are doing sweetheart deal through receiverships. First, such a policy deprives the financial institution of the full worth of the property. Second, those who have been bailed out by the taxpayer deprive the taxpayer from getting money back. That is a fact and it is wrong. It is another reason there should be very tight regulation on receiverships.

I have another question for the Minister of State. Did anyone ever check how much the financial institutions that are guaranteed by the State pay public relations consultants? The use of such consultants is another tactic that has been used to sully the name of ordinary decent people who got themselves into financial difficulties through no fault of their own. I would like the Minister of State to answer that question, if at all possible.

Bankruptcy has been mentioned and I agree that the period should be reduced to one year. The bank veto is wrong and should be changed. There are arrangements that can be put together which will see financial institutions regain quite a substantial amount of the money, in some cases but not all. However, the veto means banks will not come to a deal and that is the reality. If it takes the reduction of the period of bankruptcy to 12 months then that is what we should do. We must approach this matter in a logical manner.

Once again, I compliment my colleagues, Senators Craughwell, Mullen and Quinn, who tabled the motion. I thank the Minister of State for coming here on behalf of the Minister for Justice and Equality.

Photo of Caít KeaneCaít Keane (Fine Gael)
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I was not listed to speak and I am sorry for imposing.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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That is no problem.

Photo of Caít KeaneCaít Keane (Fine Gael)
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I want to say a few words on this important issue while the Minister of State is present. Receivership is the most important issue that affects us all, in Government and in Opposition, and anyone we know. Last Saturday, I visited a woman whose bank has refused to co-operate with her personal insolvency practitioner, a scenario which says it all. She had agreed, with the assistance of her PIP, to set up a payment and had taken in a student because she would quality for €12,000 of the money from doing that being free from tax. Unfortunately, Permanent TSB offered her just three options: to get out, give the house to the bank or sell the house. If she agreed to do so, she would be left homeless. Last week her PIP wrote the following to the bank:

I find your approach to the issue astonishing. There is no argument to the fact that the debtor is in arrears but she has seen that your sole objective in this case is to recover your money and take the house.
The fact is the house is in positive equity. It is also located in a poorer area of Dublin which is a good area and has good people living there. One option the bank gave the woman was to trade down. I do not believe one could trade down much further than Jobstown. She owns the house but all the bank has done is offer to take her house. The letter continued:
The fact that the house is in positive equity now seems to strengthen your position, in your view. Your letter lists various options the debtor has but all of them involve the bank realising its money in full. You give no thought to the debtor or to the Irish taxpayer. If the debtor has to sell the property she will be forced to go on the housing list in south Dublin. The Irish taxpayer has bailed you out and you allow for nothing, which serves the stress of this situation on this woman is having to bear.

I wish to appeal this decision and the grounds for appeal are: That she has now been allowed her mortgage interest supplement; she is taking in a student for college; and she will receive the €100 per week for a period of 8 months. This will mean that she can afford the interest repayment of €407 per month, as outlined in our telephone conversation.
This appeal was refused last week. What is the bank trying to do? Is it trying to recover a property that is in positive equity? Does it wish to sell it on? Does it want to put the woman out of her home and leave her homeless? This is only one case I know of. I wanted to mention the case while the Minister of State was present because something needs to be done quickly to resolve the matter.

I noted that the Minister of State said "the Government has already made it clear [which I am aware of and he has done so himself] that it will shortly be announcing a package of measures to support the existing framework and improve the uptake of personal insolvency solutions". The person I mentioned availed of the personal insolvency solution but got short shift. Therefore, we need an independent analysis of receivership. The banks should not have the right to say to a personal insolvency agency: "Sorry, we are not listening to you." We must veto the banks saying such things.

The Minister of State continued: "The overall aim of the Government's approach to this issue remains the same as it has always been, which is to ensure that a full range of options is available". In reality, the options that are being offered at the moment are poor. In this case, the bank suggested the woman trade down even though she had offered to pay the money. Granted, she is in arrears and there is no denying that fact. She had a business but fell on hard times through suffering a separation. The Minister of State also stated that the Government's aim is "to keep as many people in their homes as possible". I will forward this letter by a PIP agent to the Minister of State because it will prove worthwhile in terms of research.

Photo of Jillian van TurnhoutJillian van Turnhout (Independent)
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As I have no other Senators presenting, I call Senator Rónán Mullen.

Photo of Rónán MullenRónán Mullen (Independent)
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I thank all the contributors and thank the Minister of State for his response. Of course the following is not his fault as his statement was prepared for him and he was asked to carry the brief for the senior Minister in his Department. During his contribution it struck me that I was listening to hand-wringing which was followed by hand-washing and it appeared that the Government was not taking this major problem seriously. I commend Senator Hayden, in particular, on her fine speech which was gripping, compelling, knowledgeable and informed, as her contributions are always. If there was a free vote, Senator Hayden would back this motion.

Notwithstanding the hand-wringing, followed by apparent hand-washing, it turned out that the Government was just being mean-spirited. The Minister of State's response carried the tone and reflected the Government's amendment that it was not taking these concerns seriously at all. In fact, what he tried to do is hide in plain sight that he recognises there is validity to what is in the motion. The Minister of State has given a commitment that the Minister will undertake an analysis of the issue to look at the conduct of receivers. He also acknowledged the problem that receivers appointed need not be members of regulated professions. Those are the two issues at the core of the motion. He would garner a lot better PR for himself if he congratulated us on being right on the issue and saying the Government does mean to act on this. If he had done so, he would have been congratulated, and deservedly so. Instead, we experienced a schoolboy debating tactic, and I refer not to the Minister of State's speech but to the Government amendment. The pathetic claim was made, rightly contradicted by Senator Hayden, that there is no compelling evidence that this sector requires the introduction of regulations to govern conduct. If there is no such compelling evidence, why is the Minister committing to looking into it? Do Ministers talk to each other at all?

Photo of Gerard CraughwellGerard Craughwell (Independent)
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They are now.

Photo of Rónán MullenRónán Mullen (Independent)
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Some excellent points were made on related issues. In particular, Senators Craughwell and Wilson spoke about the problem of sweetheart deals and the behaviour of banks. I know of one builder in Galway, when a receiver was being appointed to properties with a view to banks selling these properties, who said he was not going to give them to the receiver. He wanted to do up the houses and have them ready for sale because the receiver would sell them at a low price thus leaving him with a higher remaining debt. That is the disgraceful treatment meted out to people who are trying to do honest business but got in trouble partly because of the bad behaviour of banks.

There is no validity to the Minister of State's response where he said that the rules of the superior courts may not be adjusted by the Minister. There is nothing that the Government cannot make possible through legislation, subject to the requirements of the Constitution. It would be within the ability and remit of the Minister to ask that rules be made. The Minister is already required to concur in rules being made by the courts. The power exists in the 2009 legislation to make regulations about receivership. Why not have powers to govern the conduct of receivers?Why not be more prescriptive in legislation, as that legislation would allow for the making of regulations? That is the reason I refer to the responses given here as being more at the level of schoolboy debating tactics, which try to nit pick in order to knock down a point. It is clear that if the will existed, the legislation could be brought forward by the Government. God knows, in recent times it has already brought forward some quite crazy legislation that goes against the public interest and has done so just because it can. I believe that where there is a serious problem disclosed by the behaviour of receivers, the Government could introduce the necessary legislation and regulations, whether under the 2009 legislation or in some other miscellaneous provisions legislation. Please do not insult the intelligence of Members of the House by saying the Minister cannot make rules, when legislation is all that is required to give the Minister the necessary powers to insist regulations be made.

I thank the Minister of State for the grudging acknowledgement that action is needed in this area and I look forward to the promised review into the conduct of receivers and to their coming before the Joint Committee on Justice, Defence and Equality in due course.

Amendment put.

The Seanad divided by electronic means.

Photo of Rónán MullenRónán Mullen (Independent)
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In view of the touching support, under Standing Order 62(3)(b) I request that the division be taken again other than by electronic means.

Photo of Denis O'DonovanDenis O'Donovan (Fianna Fail)
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The vote will now proceed.

Amendment put:

The Seanad divided: Tá, 22; Níl, 12.

Tellers: Tá, Senators Paul Coghlan and Aideen Hayden; Níl, Senators Gerard P. Craughwell and Rónán Mullen.

Amendment declared carried.

Motion, as amended agreed to.

Sitting suspended at 6.20 p.m. and resumed at 7 p.m.