Government can’t hide behind ECB on bill to rein in vultures – Carthy
Sinn Féin MEP Matt Carthy has said the government can’t hide behind the European Central Bank (ECB) on its opposition to Pearse Doherty’s ‘No Consent, No Sale’ bill. The Department of Finance is ‘urgently’ requesting an ECB ‘opinion’ on the bill, which is opposed by Fine Gael and the banks.
“Fine Gael’s opposition to this bill lays bare the central contradiction in its position – on the one hand, it claims mortgage holders are no worse off under vulture funds, but on the other it fears the proposed mechanism of written consent for the sale of a mortgage would be widely used by customers in order to prevent the sale of their mortgage to a vulture. Why would this be the case if vultures are so harmless?
“The reality is that there is no clear provision for any regulatory or statutory obligation on vulture funds to honour previous debt restructuring arrangements, and even if it was interpreted that there was such an obligation, this could be questioned in the courts, as FLAC has pointed out.
“The government is now seeking an ‘urgent’ opinion from the ECB on the bill. This will be around the 20th time since the crisis that the ECB has been ‘consulted’ on a bill relating to mortgage debt since 2013. Each time the ECB puts the profitability of banks before consumer interests.
“It is little wonder when we consider the decision-making process within the ECB. A Corporate Europe Observatory report on regulatory capture within the ECB found that of the 517 representatives operating in the ECB’s 22 advisory groups, a full 98 per cent of them came from the private financial sector (508 out of 517).
“The ECB is determined to offload non-performing loans onto the shadow banking sector. Irish legislators have the right to resist this agenda and to put in place strong safeguards for consumers.
“The Central Bank of Ireland has now apparently abandoned all pretence at being ‘independent’ and is actively campaigning against a proposed bill that aims to fill the hole left by the Bank’s own failure to protect consumers against vulture funds. We have now reached the ridiculous point where the Central Bank has scrapped its own Code of Conduct on Mortgage Arrears – on which the No consent, No Sale bill is based – in order to undermine the bill.
“Where was the Central Bank in the lead-up to the crisis, during the Tracker Mortgage scandal and the countless other scandals involving our banks over the past years? I hope the change of leadership at the Central Bank also results in a changed attitude on this issue.
“The central argument against the bill by the Central Bank, the ECB, the Department of Finance and the banks is that it will lead to an increase in interest rates. This would be laughable if it weren’t so serious. These are the exact same bodies who have failed to take any action against Irish banks who have operated in a cartel-like rate-fixing system for years. Even Mario Draghi has pointed this out.
“Properly regulated banks would not be able to collude to raise interest rates, which are already artificially inflated and the highest in Europe. Consumer protections for mortgage-holders has been left to legislators as it is clear the supposedly independent regulators in the Central Bank and ECB have abdicated from this role. The ECB and Central Bank should back off and end their politicised campaign against effective consumer protection against vulture funds.” ENDS