It was "utterly unacceptable" for any lender to breach the code of conduct for mortgages, Taoiseach Enda Kenny said. He told the Dáil that the Central Bank regulated lenders and he hoped it would deal with the matter "publicly, swiftly and effectively".
“The code of conduct for those with mortgages is very clear and fair, in respect of those who are borrowers from any of the institutions.”
Mr Kenny said the Central Bank had outlined examples of where the code had been breached and it was now the bank's function and responsibility to set out whatever sanctions it desired to impose on the lenders. The sanctions would be publicly announced, he added.
He was replying to Seán Ó Fearghaíl (Fianna Fáil), who said mortgage arrears continued to be a major problem, impeding economic development and impacting socially on the lives of tens of thousands of people. He said the Taoiseach should ensure that the banks responsible for breaching the code of conduct were named and shamed and some penalty imposed on them.
Mr Ó Fearghaíl said the Central Bank had said there was a problem with seven lenders but did not name them. “I would contend the public are entitled to know . . . the public could take action themselves.” It would appear, Mr Ó Fearghaíl added, that the Central Bank was giving cover to the banking system by withholding the information.
He said that in the past, Minister for Finance Michael Noonan said there were no sanctions that could be applied to banks if they did not co-operate with the code of conduct. "Yet those same banks are currently trying to recruit new mortgage holders,'' he added.
Mr Ó Fearghaíl asked what was being done about local authorities, which were also lenders and, in his experience, were proving to be as ruthless in dealing with borrowers in difficulties as any of the banks. “Who is overseeing the activities of local authorities as lenders which are forcing people out of their family homes?” he asked.
Mr Kenny said the Central Bank had stated it had sufficient powers to manage the process effectively. “It has carried out examinations through its rigid inspection regime,” he added. “There will be sanctions for any breaches in the code of conduct that have been identified.”
Mr Kenny said the sanctions and the institutions involved would be known, adding the inspection had examined compliance under the resolution of arrears, transparency, fair process, as well as improvement and controls. “I do not speak for the Central Bank but, following on from its own statement, it has the powers and the legitimacy to manage this effectively.”
Mr Kenny said the bank veto had applied when personal insolvency practitioners made arrangements that were not acceptable to the banks. The Government intended changing that and legislation was being prepared to that end.
He also said Minister for the Environment Alan Kelly would be interested in examples from Mr Ó Fearghaíl on the pursuit of people for non-payment of loans by local authorities. "Clearly, the situation is being dealt with under the insolvency regime,'' he added. "This has to be amended now because of the actions of some of the banks and legislation is being prepared to that effect.''
