Central Bank (Mortgage Interest Rates) Bill 2015

I welcome the opportunity to speak on this extremely important issue. I compliment Sinn Féin on using its Private Members’ time to introduce this Bill, which gives Deputies another opportunity to discuss excessive variable interest rates and the Government’s handling of the mortgage arrears crisis. The softly-softly approach it has adopted is clearly not working. My colleague Deputy Michael McGrath, who introduced a Bill similar to this one some days ago, has led the charge in highlighting that 300,000 variable-rate mortgage customers are being thrown to the wolves by the Government. These mortgage holders are paying twice the European Union average interest rate at a time when the ECB is at an historically low level.

It was unbelievable to listen to Government speakers describe this as an inappropriate time to introduce legislation which would provide assistance to 300,000 people. Talk about being out of touch with reality. I wonder if they hold constituency clinics or meet and engage with their constituents on a daily basis.

We are told that the Minister for Finance met representatives of the various financial institutions.

Let us remember that the Minister originally said he had no hand, act or part in this. It was only after considerable pressure from Members of the Opposition and considerable media attention that he decided to engage with the banks. While the banks have until 1 July to produce a formal response, the early indication of what the banks propose is pathetic. Regarding Bank of Ireland reducing its fixed interest rate, most people on a variable interest rate do not want to be on a fixed interest rate. To listen to previous speakers talking about how we got here, it would appear that they think describing how we got here absolves them of responsibility for helping people who are in a particularly difficult situation with their mortgages. Earlier in the House, we voted for the establishment of a commission of investigation into certain transactions at the liquidated IBRC. Similarly to the action required on the variable interest rate, the establishment of the commission of investigation was initially rejected out of hand by the Government. It said there was no proof of wrongdoing. Now, it says it is only establishing the commission to reassure the public. What reassurance will the Government give to the 300,000-plus families being screwed by their financial institutions? They are looking in here and what they see is one rule for friends of Fine Gael and another for the ordinary Joe Soap. People with high borrowings with IBRC are availing of bargain basement write-downs on their debt and bargain basement write-downs on their interest rates. What does that tell Joe Public? It says the Government is not serious about helping and supporting families. If it was, it would be supporting the legislation.

As my colleague said, while we have concerns about certain elements of the Bill, it should be allowed to pass to Committee Stage so that we can examine how to improve it. As a party, we recognise the need for the banks to be profitable. We also recognise and acknowledge, however, the right of customers to be treated fairly, which is clearly not happening. The recent report by the Central Bank clearly outlines the dysfunction in the mortgage market and states that there needs to be greater transparency in variable interest rate policies. People who are looking on are absolutely bewildered at the margin the banks can charge and the difference being charged in this jurisdiction vis-à-visthe rest of the EU. Someone with a 20-year mortgageof €200,000 in Ireland pays €4,000 more a year in interest than people in the rest of the EU. How is that fair and equitable and how can the Government stand over it and allow it to happen? Nevertheless, Government Members say it is an inappropriate time to talk about this issue. I heard a previous speaker use the words “hopeful” and “confident,” and say that he or she expected the banks to act in a certain way. The father of a young lady came to my constituency office. She is under huge pressure and depressed due to the manner in which the banks are dealing with her. She is in her early 30s and took out a mortgage in good faith which she paid consistently, on time and in the right amount for seven years. It was only after that that she got into difficulty. The manner in which the bank has dealt with her and her family has been wholly unacceptable, but we are told we are leaving it to the banks’ control. Two years ago my party advocated for the removal of the veto, but we were blocked by the Government before it arrived at similar thinking. In the same way, the Government must reconsider introducing legislation to ensure the banks cannot rip off our citizens by charging high interest rates.

Before I finish, I want to touch on the wholly inadequate manner in which the Government is dealing with those in mortgagearrears. Again, a constituent of mine was lucky enough to be in receipt of mortgage interest supplement, given that the scheme was scrapped by the Government a number of years ago. She was getting €280 a month but because she negotiated a revised repayment deal with the bank whereby a greater percentage of the payment went towards the capital rather than the interest, the full mortgage interest supplement has been cut. She is a young woman with a husband and a child and the only income coming into the house is social welfare. How can she afford to pay her mortgage? She cannot. What help and support is she getting from the Government? She is getting none. The Government refers to the mortgage interest scheme and its representatives say the mortgage-to-rent scheme is there. When that was introduced in 2012, 500 applications were meant to be approved each year. There have been 88 since 2012. What does that say about the attention the Government is giving to those in mortgage arrears? It is giving none. I appeal to the Minister of State, Deputy Nash, to reconsider the Bill and allow it to pass on Second Stage to give all Members of the House an opportunity to tease out how we as elected representatives can bring forward legislation to give some hope and breathing space to the 300,000 people who are at the pin of their collars tonight.