Fianna Fáil Finance Spokesperson Michael McGrath has called on Minister Michael Noonan to publish the Central Bank’s research into why standard variable mortgages rates are so high in Ireland.
Deputy McGrath stated, “I understand the report from the Central Bank was given to the Department of Finance last Monday. I believe the Minister for Finance should now publish the report so that everyone can see the Central Bank’s logic for variable rate mortgage holders in Ireland paying double the euro area average. So far, all we have are selected leaks which point to the Central Bank siding with the banks as opposed to the mortgage holders.
“The truth is that 300,000 variable rate mortgage holders are paying way over the odds for their mortgage in Ireland. A number of banks continue to charge up to 4.5% on variable rate loans despite their cost of funds falling towards 1% in recent times. The bottom line is a variable rate should move in line with market conditions. Banks are now able to access funds at record low rates from the wholesale markets, the ECB and their deposit base. They have failed to pass on that benefit to their variable rate customers. Are we really suggesting that, if market conditions deteriorated, the banks would need to be asked twice to increase their variable rate?
“I strongly believe the Central Bank is not placing a sufficient emphasis on its consumer protection role. It seems transfixed on the need to protect banks at all costs and at the expense of variable rate customers in particular. The Central Bank needs to step up to the mark and the Minister needs to deliver a strong message to the banks when he meets them directly that the current variable rates are simply not acceptable and will not be tolerated.
“The Minister should publish the Central Bank report immediately. Fianna Fáil will assess the report and the Minister’s response to it. If no action is being taken to properly tackle the issue, we will bring forward legislation to give the Central Bank the power to intervene directly where unjustifiable rates are being charged.”