Permanent TSB has insisted that now is the “appropriate time” for it to offload around 18,000 distressed mortgages from its books.

The bank is refusing to back down under significant political pressure, with Fianna Fáil introducing legislation aimed at regulating so-called ‘vulture funds.’

The party has accused the bank of 'outsourcing its dirty work' by selling on the loans - with fears large numbers of evictions could follow.

It has called on the Government to step in and block the sale, arguing that ‘vulture funds’ are not subject to the same Central Bank regulations as banks and may be less likely to work with customers to resolve their difficulties.

Pressure

In a statement this evening, Permanent TSB (PTSB) said it is facing significant pressure from European regulators to reduce the level of non profit loans on its books.

It insisted that offloading these loans to third parties is “normal banking practice” in other jurisdictions.

It claimed the sale was necessary to allow the bank to use its resources to “concentrate on providing new loans to home buyers and businesses who need access to credit.”

“A new generation of home buyers needs to be able to engage with healthy, competitive banks who can finance and purchase homes and, the banks themselves need to ensure that they are strong, profitable and capable of withstanding potential future shocks,” said the statement.

Regulation

The Taoiseach this afternoon said there are already certain protections in place for mortgage holders.

He said that while the funds themselves do not face regulation, they are obliged to employ agents that do.

However, Sinn Féin leader Mary Lou McDonald noted that his words will offer scant comfort to the families affected:

“Taoiseach I don’t know how you would feel if your home was turned over to a financial firm that doesn’t have to abide by any rules,” she said.

“I know how I would feel.

“I would feel alone, I would feel afraid, I would abandoned, I would r=probably feel depressed.

“Allowing vulture funds to operate so recklessly is clearly government policy.”

The Fianna Fáil leader Micheál Martin called on the government to advise PTSB not to proceed with the sale.

Mr Varadkar said the Government is “open to any further proposals” for strengthening the protections available.

Project Glás

PTSB said the loans included in the ‘Project Glás’ portfolio that is under consideration for sale are valued at €3.7bn.

The loans are linked to around 18,000 properties – approximately 14,00 thousand of which are private homes.

The banks said €1bn of the loans relate to properties that were specifically bought as investment opportunities.

It claimed that a further €2bn is accounted for by homeowners who “have not engaged with the Bank, whose mortgages are unsustainable or who have been unable to meet the terms of various treatments put in place.”

It claimed that many of these homeowners have made no payments for years.

“It is important to note that, in preparing this loan book for sale, the Bank did exclude a significant number of customers who will be resolved through other means,” said the statement.

Protection

Fianna Fáil has said it will demand the Government’s backing in its efforts to ensure that new laws are put in place banning the sale of portfolios to any entity that is not fully regulated by the Central Bank.

The party’s finance spokesperson Michael McGrath told Newstalk that the confidence and supply arrangement propping up the Government will oblige it to ensure the bill “or a bill like it” becomes law and “becomes law quickly.”

PTSB noted in its statement that while the purchaser of a portfolio does not face Government regulation, it is obliged to employ an agent which is “bound by the same regulations when dealing with account holders as currently apply to PTSB.”