Fianna Fáil General Election candidate for Kildare North Cllr Frank O’Rourke has called on Government TD’s to support a Fianna Fáil Bill aimed at ending the scandal of banks massively overcharging customers on standard variable mortgage rates.

Cllr O’Rourke made the comments after the Fianna Fáil Spokesperson on Finance Michael McGrath TD introduced detailed legislation in the Dáil this week to force banks to introduce realistic and fair charges for variable mortgage rate holders.

“Fianna Fáil has consistently highlighted over the last two years as to how the banks are ripping off their variable rate mortgage holders. As it stands there are up to 300,000 mortgage holders on variable rates paying hundreds of euro more per month on their mortgages” said Cllr O’Rourke.

“Our representatives in the Dáil put the issue on the agenda again at the end of March with a motion on the subject of the rip-off variable rates being charged. Since then the banks have sought to deny the existence of a problem or fob customers off with minor changes to their rates. The Government has been totally lacklustre with its response to the problem and has failed to convince the banks to reduce their punitive variable mortgage rates. This clearly indicates that the Government is not bothered enough to take decisive action.

“I have spoken with countless families across Kildare who are stuck on variable mortgage rates. They are forced to pay up to €500 more per month as a result when compared to new mortgage holders with the exact same mortgage but with tracker rates. This is unacceptable when you consider interest rates are currently at record low levels.

“This week Fianna Fáil is giving TDs a final chance to end this rip-off once and for all. Our local Deputies in the constituency will be asked to vote on a Fianna Fáil Bill that would give the Central Bank the power to put its foot down and regulate the rates charged to mortgage holders.

“Under our Bill, the Central Bank can intervene if it sees that banks are charging extortionate interest rates. The Central Bank can:

– Enforce a set maximum rate;
– Force the bank not to exceed a set margin above the ECB rate;
– Force the bank to stick to rate that are only a set margin above its own cost of funds; and
– Ensure that the bank does not charge rates more than a third higher than the average variable rates on the market.

“Our legislation would apply to all mortgage lenders, meaning that 46,000 mortgages attached to non-bank lenders would also be included. This includes mortgages that have been sold to vulture funds.

“There is no excuse for sitting back and allowing this rip-off to continue. I am calling on our Government TDs in Kildare to do the right thing and back this legislation to finally provide some fairness to SVR mortgage holders.”