Left group forces plenary vote on non-performing loan report – Carthy
Sinn Féin MEP Matt Carthy helped to force a plenary vote in the European Parliament on a report on part of the non-performing loan package of proposals. Carthy, who is the GUE/NGL negotiator on the file, made a formal request together with the Greens that the plenary of the European Parliament vote on whether to accept the mandate of the Economic and Monetary Affairs Committee. Forcing the report to come to plenary resulted in a trilogue negotiation between the Council, Commission and Parliament scheduled for yesterday to be cancelled.
Speaking from Strasbourg following the vote, Carthy said: “I am in favour of ensuring that banks should be required to put aside their own capital to cover the losses they incur when the loans on their balance sheets turn non-performing. This would incentivise banks to adopt more prudent lending standards. It would increase financial stability and lessen the likelihood of future public bailouts being necessary.
“But this proposal for a Regulation cannot be viewed in isolation. It is part of a package that aims to encourage banks to offload their loans – which can include performing loans – onto the so-called secondary market, meaning the unregulated shadow banking sector, vulture funds and debt collectors. I am extremely concerned by the proposed Directive accompanying this Regulation, which aims to enable banks to seize the property of the customers as collateral without going through the courts.
“My view is that banks should be required to keep their non-performing loans on their books and to work through them with their customers by writing down, restructuring or forgiving the debt, particularly in cases of residential loans.
“I proposed several amendments to the report aiming to insert consumer protection provisions in the Regulation, particularly with regard to the forbearance measures chosen by banks to apply to their customers. I proposed measures to disincentivise the sale of NPLs by the originating banks, as well as amendments to ensure that actors on the secondary market do not receive a competitive advantage in comparison to the regulated banking sector. We also need to ensure the strict monitoring and regulation of the secondary market in order to prevent new systemic risks to financial stability from emerging.
“Unfortunately the two largest groups, EPP and S&D, who co-authored the Parliament’s report, refused to take on board the need for strong consumer protection measures to be included in this Regulation. All of the smaller groups are appalled at the overall process of the negotiation of this file. Several groups jointly requested that the Regulation and Directive be dealt with at the same time as one informs our position on the other, which was ignored.
“The co-rapporteurs presented the draft report as a fait accompli, and refused to allow meaningful input from the other groups. They used procedural means to refuse to allow the ECON committee to vote on the amendments proposed by smaller groups.
“In response, we worked together with the Greens in order to force the mandate adopted at committee level to be voted on today in the full plenary of the Parliament, which caused the trilogue scheduled for Wednesday to be cancelled. I sincerely hope that the two largest groups do not adopt a similar steamroller approach when negotiations begin on the proposed Directive in this package. I will be campaigning for the Directive to be withdrawn.” ENDS