Sinn Féin's finance spokesman Pearse Doherty has claimed that Fine Gael and Fianna Fáil members of the Oireachtas finance committee are seeking to thwart his Bill that would force banks to secure distressed mortgage holders' permission to sell on their loans.
Fianna Fáil finance spokesman Michael McGrath and Fine Gael senator Kieran O’Donnell were among committee members to say at a meeting on Tuesday that the No Consent, No Sale Bill 2019 should not progress to committee stage, the third stage of a Bill’s passage through the Oireachtas, until after an independent impact assessment of the draft law is completed.
Mr McGrath indicated he would not support the Bill going to committee stage if an impact report concluded that it would hinder the flow of bank credit through the economy.
Tactic
“This is just a stalling tactic to try to stall the Bill,” Mr Doherty told the meeting, saying that it would delay the completion of a scrutiny report currently being considered, which would pave the way for the draft laws to enter committee stage before the summer recess.
Mr McGrath and Mr O’Donnell rejected this claim, saying that allowing an independent assessment to be carried out over the summer would enable the Bill to progress after the break.
Figures from the Central Bank to the Department of Finance, chief executives of the country's banks and European Central Bank (ECB) have argued that the draft laws would hurt the financial system if enacted.
A Department of Finance submission made to the committee earlier this year highlighted that it could result in higher interest rates for borrowers, reduced availability of credit to the economy, and increased repossessions by banks as their ability to sell non-performing loans will be severely reduced. It also warned that it could significantly reduce the value of taxpayers’ stakes in the State’s three surviving bailed-out banks.
Concerns
"We cannot ignore the very serious concerns expressed by my department, the Central Bank of Ireland and the European Central Bank in relation to this Bill," said Minister for Finance Paschal Donohoe, who appeared before the committee on Tuesday to say he was "unambiguously against" the Bill.
“The possible unintended consequences from this legislation are wide-ranging, with grave outcomes. It is essential that we continue to be very considered in our policymaking and legislative interventions and that legislation that has the potential to hinder the Irish mortgage market in this way, with such serious repercussions for Irish home owners, is not progressed further.”
The committee is expected to decide on Thursday whether to seek an independent impact assessment before progressing the Bill to committee stage.
Meanwhile, a new not-for-profit company offering mortgage-to-rent solutions for distressed borrowers, Homeoptions, claimed on Tuesday that it has the potential to take on the 28,000 owner-occupier loans in the State that, according to Central Bank data, are more than two years in arrears.
Homeoptions director Brian Reilly told reporters the firm has senior and junior financing available to it from US and European sources as well as ethical finance providers, but declined to say how much funding has been secured.
It is understood the organisation is in early talks to buy as many as 4,000 deeply distressed home loans from AIB.
The organisation, chaired by Erskine Holmes, founding director of the Ulster Community Investment Fund, is mainly targeting mortgage-to-rent (MTR) solutions at financially distressed households that would not qualify for current national MTR schemes where families must be eligible for social housing.
Borrowers who surrender their properties to Homeoptions will be able to repurchase the home in future at the outset of the agreement.
