The Fianna Fáil legislation designed to give the Central Bank greater powers to tackle excessive standard variable interest rates, which is currently before the Oireachtas Finance Committee, is expected to progress through the legislative process in the coming weeks, according to Finance Spokesperson, Michael McGrath TD.
Deputy McGrath commented, “This Bill began its journey by passing second stage in the Dáil last May without a vote. Last month, the Finance Committee held a pre-legislative hearing on the Bill with testimony from the Minister for Finance and representatives of the Fair Mortgage Rates Campaign group.”
“The Governor of the Central Bank is due to give evidence on the Bill before the Committee in early December. Meanwhile, the European Central Bank has been consulted on the bill in accordance with standing orders and their feedback is expected shortly.”
“While we have seen limited progress on variable interest rates and new product offerings by banks in recent times, rates remain too high for many existing variable rate customers in Ireland.
“No credible explanation as to why variable rates in Ireland are so much higher than elsewhere in Europe has been given by the banks, and greater progress is needed to bring down rates in Ireland, especially for the existing customers of banks.”
“The Finance Committee will tomorrow start a series of meetings with the main banks in Ireland. Bank of Ireland will attend tomorrow’s meeting and will be followed by AIB, Permanent TSB and Ulster Bank, over the coming weeks.”
“With a variable rate of 4.5% for some existing variable rate mortgage customers, Bank of Ireland offers one of the highest rates in the market. Tomorrow’s meeting will provide a useful opportunity to probe this issue further and ask the bank’s management why the rate is so high despite it enjoying record low cost of funds.”
“It is clear to me that pay pressures – both in the public and private sectors – are partly because of the high cost of living in Ireland, and this includes high rental costs but also the high cost of mortgage rates. There needs to be a determined focus to tackle these issues and our Bill on variable rate mortgages is a tangible way of doing so,” concluded McGrath.