Carthy calls on government to resist EU Vulture Fund Directive
Sinn Féin MEP Matt Carthy has called on the Irish government to ensure that domestic legislation designed to subject vulture funds to Central Bank regulation is not trampled on by the proposed new EU Directive on creating a secondary market for non-performing loans. The Midlands North West MEP has been negotiating the package on non-performing loans for the left group in the European Parliament.
Carthy said: “First up, my view is that this proposed Directive needs to be withdrawn. It was proposed on the basis of an impact assessment that took absolutely no regard of the rights of EU citizens such as the right to housing assistance under the Charter of Fundamental Rights.
“It will lead to more evictions, more harassment of homeowners by debt collectors, and more housing stress and homelessness. It is grossly unfair because it puts the blame and the punishment for the 2008 crisis on the shoulders of ordinary families and homeowners instead of the financial institutions that caused the crisis.
“In an Irish context, we have made only limited progress to date in terms of regulating vulture funds and protecting consumers and mortgage-holders. Yet even this modest progress made in the Dáil – usually in spite of Fine Gael opposition – will now be under threat by this EU Directive.
“For years Irish campaigners for the rights of mortgage-holders have demanded that the vulture funds themselves, and not only the middlemen – their intermediary debt collectors, referred to as credit servicers – must be directly regulated by the Central Bank. Ireland’s Consumer Protection (Regulation of Credit Servicing Firms) Act 2018, which came into effect in January, is a positive step forward in that it allows the Central Bank for the first time to regulate, investigate and sanction the owners of the credit agreements and not just their designated debt collectors.
“This modest but significant step forward in our framework for regulating vulture funds is now under threat by the EU Directive, which aims to impose a regime where the vulture funds themselves are entirely unregulated in the EU and only their ‘credit servicer’ subsidiaries are subject to any rules.
“I welcome the fact that Minister for Finance Paschal Donohoe confirmed in a letter to me on March 6 that he has communicated to the Council that this is a ‘redline’ issue for Ireland in the Council negotiations on the Directive. The government must be held to this commitment, and all Irish MEPs in the European Parliament must also defend this position.
“The second substantial principle we need to defend is of course my colleague Pearse Doherty’s ‘no consent, no sale’ bill requiring banks to gain the written consent of their customers before selling their mortgage to a vulture fund; if this bill becomes law based on the will of our elected representatives in Dáil, it will be simply overruled by the EU through this Directive.
“I have tabled amendments to the Parliament’s report on the Directive demanding the direct regulation of the vultures; the need for banks to obtain the written consent of their customer before selling their loans on to a third party; a debt buy-back scheme for customers to have the right to purchase their own debt at the same reduced price that their bank would sell the loan to a vulture for; and for a range of additional consumer protection improvements to the Directive.
“But these amendments are not enough. I will also be working with consumer protection groups and housing campaigners in the coming months to call for the total withdrawal of this extremely damaging proposal.” ENDS