The Minister for Finance has said he is “deeply aware” of the worry and concern surrounding the sale of thousands of Irish mortgages by Permanent TSB.
Yesterday the bank confirmed it was pressing ahead with the sale of around 18,000 distressed loans valued at €3.7bn.
The bank also revealed that the majority of the loans belong to private homeowners.
It claimed that many of these homeowners have not engaged with the bank – however it admitted the sell-off also included some homeowners who have come to restructuring agreements with the bank.
Fianna Fáil has called on the Government to advise the bank not to proceed with the sale amid concern that any fund that purchases the loans will less likely to work with customers to resolve their difficulties.
The party has introduced a bill aiming to ensure that any fund that purchases mortgages must be regulated by the Central Bank.
Minister Donohoe said Permanent TSB has moved forward with the sales process and will consult with him at a later stage.
He said he will review the legislation that is currently in place to guard against mass repossessions:
“We still have many citizens who will be worried by the announcement and concerned regarding their long-term future and their homes,” he said.
“I have always indicated that I will keep the legislation in relation to these matters under review.
“I will be asking the Central Bank for any further views they may have in relation to the legal and regulatory environment that we have in relation to how these matters are dealt with.”
He said he is “very conscious” that there are people included in the sale who have already restructured their mortgages and may need to do so again, adding “I am conscious of the worry that they will have.”
The minister is meeting with Fianna Fáil’s finance spokesman Michael McGrath this evening to discuss concerns the loans will be sold to unregulated ‘vulture funds.’
Fianna Fáil has indicated it will demand the Government’s support 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.
Under the current legislation there is no requirement for vulture funds to be regulated – although they are obliged to employ an agent that is bound by Central Bank rules.
Minister Donohoe said it is important everyone is treated as fairly as possible – but warned that the future health of Permanent TSB is vital for the Irish economy:
“We have just gone through a very difficult journey when we didn’t have regulation that we thought was as strong as it needed to be with our banks,” he said.
“And where we have looked to strengthen the independence of Central Banks and their capacity to look after our banks
“The regulator for Permanent TSB is very clear that that level of non-performing loan needs to come down.”
He pledged to “build on the legal and regulatory environment” that is currently in place to ensure that “everybody is treated as fairly as possible.”
With reporting from Sean Defoe ...