Banks hold too much sway in Personal Insolvency Legislation

BIlly Kelleher

FIANNA Fáil TD for Cork North Central, Billy Kelleher, has said that banks have too much power in the new Personal Insolvency legislation, which was launched last week.

While acknowledging that the new legislation represents an opportunity to help the thousands of families in mortgage arrears, Deputy Kelleher said it does not go far enough.

Deputy Kelleher commented: “This is not a banking issue and the banks should not hold the balance of power. It is a Government matter and civil society will benefit from any deal. The new Insolvency Service of Ireland needs to have the capacity to engage with families and mortgage holders and offer relevant advice and importantly be accessible.

“Many of the people I speak to in Cork tell me that the mortgage crisis they face is getting worse not better. Fianna Fáil welcomes the decision to reduce the bankruptcy discharge period to bring it into line with the European norm.

“However, the Bill does nothing to break the monopoly the banks have over borrowers and the State. The Bill informs us that Creditors holding 65% of a person’s debt must agree with the proposed debt settlement arrangement or personal insolvency arrangement.  This changes little for mortgage holders and still places them at the mercy of the bank.

“It really does seem that the Government’s response to the mortgage crisis is increasingly relying on the good faith of bankers and that is not what the Bill should be about. Mortgage holders in Cork have already expressed to me that there should be an equal balance of power in these negotiations.

“Fianna Fáil will study this Bill in detail and we will be engaging with interest groups and bringing forward amendments to the legislation.  Ireland is not going to get another opportunity like the one that exists now to comprehensively deal with this social and economic crisis.

“We need to see the establishment of an independent statutory non-judicial debt settlement office. In the event of a mortgage holders’ debt becoming unsustainable, a third party is needed to conduct a comprehensive assessment of that person’s financial position.

“We have brought forward sound legislation to allow such an office, but the Government has refused to examine the proposal. I call on them now to review this and take on board the proposals put forward by Fianna Fáil.”