Central Bank Urged To Use Its Powers On Unregulated Loan Owners

The Central Bank has been urged to use the powers it has been given by the Oireachtas to regulate previously unregulated loan owners.

Describing the situation as "critical", Fianna Fáil Spokesperson on Finance Michael McGrath, made the call following the news of the latest planned loan portfolio sale by Ulster Bank relating to some 3,600 mortgage accounts (principally owner occupier mortgages).

Deputy McGrath said: "While none of the owner occupier mortgages are currently in a restructure arrangement, the customers concerned had been in on average five restructure arrangements with the bank. This points to the fact that most of these customers have been engaging with the bank but are simply unable to pay as opposed to being unwilling to pay. However, the bank has not said that these customers are not paying anything towards their mortgage.

"By selling the loans in this fashion, the bank is taking the easy way out and has demonstrated little regard for the long-term welfare of its customers. It is my experience that these so called 'vulture funds' are very difficult to deal with and have no interest in entering into long term forbearance arrangements with mortgage holders.

"Fianna Fáil believes that mortgage holders who are making a genuine effort and are paying what they can should be protected and kept in their home. Progress on the State's mortgage to rent scheme has been painfully slow and this could well be a solution for some of the mortgage holders in long term mortgage distress.

"The number one priority of the regulators seems to be to protect the health of the banks. They have little concern about what happens to the customer once their loan is sold on by a retail bank within their remit.

"As a result of the enactment in January of Fianna Fáil legislation to regulate these 'vulture funds', some 37 entities have now begun the process of being regulated by the Central Bank. The Central Bank now has the power to inspect, investigate and take enforcement action against these funds as appropriate. Today's announcement once again underlines the need for these powers and the need for the Central Bank to be willing to use these powers to maximum effect."

(MH/JG)