Fianna Fáil Spokesperson on Finance Michael McGrath TD has repeated his party’s call for the Oireachtas to urgently legislate to ensure that so called ‘vulture funds’ are fully regulated by the Central Bank and the party has also called for a review of the 2013 Code of Conduct on Mortgage Arrears.
Deputy McGrath was commenting following this morning’s statement from Ulster Bank CEO Gerry Mallon that the bank may sell off up to 7,000 mortgages.
Deputy McGrath commented, “The case for full regulation of these vulture funds is compelling. If the fund buys a mortgage, a farm loan or an SME loan, it makes all the crucial decisions about the future of that loan. Despite this, the vulture fund is untouchable, unaccountable and entirely beyond the reach of the Central Bank.
“In a Dáil reply to me this week, Minister Donohoe confirmed the stark reality ‘The Central Bank has no jurisdiction over unregulated third parties and therefore has no power to investigate the activities of such entities.’ It is imperative this situation is addressed urgently and Fianna Fáil will be pressing the issue in the Dáil next week with our Bill.
“We also believe there is a need to go further. The 2013 Code of Conduct on Mortgage Arrears needs to be reviewed. With 38,000 family home mortgages now owned by non-bank entities, including over 11,000 by unregulated vulture funds, it is time to update the Code.
“For example, there is a need for a definition of what a sustainable mortgage is. In addition, mortgage holders who are fully honouring the terms of a restructuring agreement need greater protection. The fact that vulture funds do not have to offer some of the main restructuring options such as arrears capitalisation, term extension or split mortgage places distressed borrowers whose loans are with them in a perilous position.
“Ulster Bank’s handling of the tracker mortgage scandal has been a shambles. The bank has dragged its feet from beginning to end and can still not provide a definitive update for affected customers. Like other banks, it now wants to outsource its dirty work having failed to address its loan arrears levels itself. As banks and vulture funds want to play ‘pass the parcel’ with mortgages, farm and business loans, it is time the Oireachtas faced up to its responsibilities,” concluded McGrath.