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Stephen Donnelly at today's Oireachtas Finance Committee meeting
Debt Crisis
PTSB says it would “stand over” advising customer to leave college in order to pay mortgage
Stephen Donnelly says that the bank’s response was “deeply disappointing” and says that the crisis is not one of arrears, it is one of debt.
Updated 22:56
EXECUTIVES FROM PERMANENT TSB today defended advising mortgage holders not to pay, or pay less off, other loans.
At today’s Oireachtas Finance Committee, Independent TD Stephen Donnelly read out a letter from a constituent who had been offered a split mortgage.
The letter read:
Myself and my wife are customers of Permanent TSB and currently experiencing a shortfall in our mortgage of €400.Permanent TSB has offered us a split mortgage which would reduce our payments by €140. They have allowed us €10 a month for Credit Union and family loans.
I explained that the Credit Union was being used to pay my college fees and if I default on that loan, I will not be able to continue my studies.
PTSB replied that the situation was serious and the mortgage must be prioritised.
Donnelly said that while he understood the difference between secured credit like a mortgage and unsecured credit such as a Credit Union loan, he would like to know if the bank would “stand over” a situation where a borrower would have to leave education.
PTSB CEO Jeremy Masding paused before saying:
“Everything is done on a case by case basis.
“I think I would have to stand with that letter, Deputy.”
Masding was echoed by Shane O’Sullivan, who is the bank’s head of asset management.
“We don’t force these decisions, the debt prioritisation issue is here and now.”
Donnelly said that he was “deeply disappointed” with the response.
“It gets to the heart of the problem of this entire approach.
“The banks are dealing with arrears, but it is at the cost of the Irish citizens and the economic recovery of this country.
Donnelly echoed what he said yesterday to Bank of Ireland chief Richie Boucher that the majority of mortgage restructures would end up costing the account holder more than the original loan.
“This is not an arrears crisis, it is a debt crisis.”
Originally published 20:00
Read: “Too early” to make a call on the future of PTSB – bank CEO
Read: Permanent TSB has offered 3,500 split mortgages, has taken legal cases against 1,600
