Fianna Fáil Finance Spokesperson Michael McGrath has welcomed an indication from Minister Michael Noonan in the Dáil that the government is about to finally move to dilute or end the bank veto.
During the debate on Oral Finance Questions this morning, Deputy McGrath again repeated Fianna Fail’s call to wrestle control of the process away from the banks and give the power to an independent body to make the final decision on the restructuring of a mortgage.
Responding to a Priority Question in the Dáil from Deputy McGrath, the Minister for Finance committed to propose “…new options, one of which is to amend the insolvency Act so that something along the lines of what the Deputy has suggested can be put in place. I expect the Minister for Justice and Equality to bring her proposals to the Government shortly.”
Deputy McGrath commented, “The Minister’s acknowledgment of the need to deal with the veto is an important step forward. It is in sharp contrast to the position adopted by the government over the last four years where they have denied the existence of a problem in relation to how the banks are allowed drive the pace of restructuring mortgages. A considerable amount of unnecessary distress has been heaped on families as a result of the failure to address this issue. We need to see the legislative proposals to give effect to this before the summer recess.
“Removing the bank veto is in itself not enough to deal with the mortgage crisis. Fianna Fáil is advocating a package of measures to comprehensively address the cause of arrears and to deal with a situation where a family has fallen behind on the mortgage. This includes measures to:
– Tackle high standard variable rates which are a significant cause of people falling in to arrears in the first instance;
– Produce a clear definition of a sustainable mortgage which will assist customers in their negotiations with financial institutions;
– Set up a system of state and creditor funded insolvency practitioners. These would take on cases where the debtor’s payment capacity is so impaired that existing Pips are unwilling or unable to do so;
– Overhaul the Mortgage to Rent scheme for unsustainable mortgages with an increase in the maximum current maximum market value of houses eligible for participation in the scheme and more realistic income guidelines;
– Legislate to ensure consistency in treatment across banks in relation to split mortgages. Bank should apply a zero interest rate to the warehoused portion of all split mortgage products offered to customers in arrears.”