Fianna Fáil Spokesperson on Finance Michael McGrath TD has said that Irish consumers have been left exposed by the Central Bank’s lack of powers over mortgage interest rates and that variable rate mortgage customers continue to be charged rates that are unjustifiable.
Deputy McGrath was commenting after officials from the Central Bank appeared before the Joint Oireachtas Finance Committee this morning. The Committee is currently undergoing pre-legislative scrutiny of the Fianna Fáil bill to give the Central Bank the power to exercise control over interest rates.
“This morning, the Central Bank acknowledged that it doesn’t have any direct powers to do anything if a so called ‘vulture fund’ or indeed any other lender started charging exorbitant interest rates of up to 10% on existing mortgage customers.”
“For the over 10,000 families with mortgages owned by unregulated vulture funds, this is an incredibly frightening scenario. The number of people potentially at risk is set to increase significantly as more loan portfolios are sold on,” added McGrath.
“Interest rate caps are already in place in Ireland in relation to Credit Union loans and lending by licensed moneylenders. The ECB has informed us that a series of countries across the EU, including France, Italy, Portugal, Slovenia, Croatia, Estonia and Cyprus, have restrictions in place on the maximum interest rates that can be charged on mortgages.”
“Given that Irish variable rate mortgage customers continue to pay well over the odds on their mortgage rate, such restrictions are urgently required in Ireland.”
“The pre-legislative scrutiny of the Fianna Fáil bill on variable mortgage rates will shortly come to an end, and I expect the Bill to move to formal Committee Stage in the New Year. Meanwhile, mortgage lenders in Ireland should avail of the opportunity now to reduce rates further to better reflect current market conditions including the very low cost of funds they enjoy,” concluded McGrath.