Government Initiative on Mortgage Debt a “Bankers’ Charter” – FF

Fianna Fáil Finance Spokesperson Michael McGrath TD has responded to the publication of the Government’s initiative on tackling mortgage debt.  The deputy criticised the plan for the additional powers it gives to banks and for its failure to set any meaningful or enforceable targets.

Deputy McGrath commented, “For two years, the Government’s approach to the mortgage disaster unfolding across the country has been characterised by inertia, wishful thinking and deference to the banks.  The result has been a surge in serious mortgage arrears and growing anxiety on the part of families in every community across the country.

“For the last two weeks, the Government has been spinning furiously that mortgage arrears is the number one priority and that today they would set out comprehensive plans to deal with the problem.  Unfortunately for those families in serious trouble, what was announced today does little or nothing to tackle the core issue – namely the need for the banking sector to be forced into doing realistic and fair deals with people in trouble.

“Instead, we’ve watched the Government unveil a bankers’ charter. Today’s announcement confirms the failed strategy of the Government to date – namely, to put the banks in the driving seat.  Indeed, today’s announcement underpins this approach even further by actually giving the banks additional powers to set aside the code of conduct, put more pressure on lenders and move much more quickly to repossess family homes.

“The Government has made much of its move to set quarterly targets for the banks.  Unfortunately, like so much with this Government, when you look into the detail a very different picture emerges.  The targets that were announced today mean very little – they are targets for the bank to propose new arrangements with borrowers.  There are no targets for the banks to actually agree new arrangements.

“At the centre of the strategy is the same mistaken belief that if the banks are put in the driving seat, a solution will follow.  If the Government has listened even briefly to those who are shouldering the burden of excessive personal debt, they would know that this is precisely the wrong direction to take.  The banks need to be dealt with as part of a much more holistic solution to personal debt, with their veto taken away and the citizen at the centre.

“Today is yet another example of the Government putting headlines first.  It is another major opportunity lost.”