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Protesters bringing a coffin to the door of PTSB today. Michelle Hennessey
Mortgage Arrears

Protesters deliver a coffin to the door of PTSB, as government agrees to regulate vulture funds

The Central Bank is to review their code of conduct for how financial institutions deal with those in mortgage arrears.

PROTESTERS MARCHED A coffin to Permanent TSB headquarters in Dublin today to voice their opposition to the sale of mortgages to vulture funds.

PTSB, which is 75% State owned, has defended its plan to sell off a book of non-performing loans known as Project Glas.

The proposed sell-off of 18,000 properties, including 14,000 private dwelling homes, has become the subject of a political battle in the last week.

Today, the government agreed to support Fianna Fáil’s bill to regulate vulture funds.

Finance Minister Paschal Donohoe said he will work with Fianna Fáil’s finance spokesperson Michael McGrath, though he said significant redrafting of the bill will have to be carried out for it to have the “desired effects”.

In addition, the minister said he has asked the Central Bank to review their code of conduct for how financial institutions deal with those in mortgage arrears.

DXDPzepWAAAK6A3 Protesters at the door of PTSB HQ today. Michelle Hennessey Michelle Hennessey

TD Michael Collins told TheJournal.ie that the coffin carried to the bank today represents the people who have lost their lives and the families in mortgage arrears that have been sold off to vulture funds.

Speaking to reporters today, Donohoe said he was aware of the concerns homeowners had about the possible sale of their mortgages.

Treating mortgage holders fairly

“I understand and want to recognise the worry this is causing people at the moment. I am determined as minister for finance that everybody is treated fairly and for these reasons a review of a code of conduct is appropriate,” he said.

Donohoe said the bill to regulate vulture funds “will have an effect on the regulatory environment that is there at the moment” and will have a “positive effect”.

Under the current regulations, it is only the intermediary, or middle man, that works between the mortgage holder and the vulture fund that falls under Central Bank regulations. The loan body or vulture fund itself which owns the mortgage is not regulated.

The regulatory reach of the Fianna Fáil bill will now extend to vulture funds. The minister said he is satisfied the new rules “does not constitute any interference in our banks”.

PASCHAL 510_90538066 Minister for Finance and Public Expenditure and Reform, Paschal Donohoe Sam Boal Sam Boal

The minister told reporters today that the regulatory framework put in place in the past, when he was not a minister in the department, “was appropriate then”.

However, he pointed out that he always said he would keep the matter under review.

Having looked at the current regulations with “an open mind”, Donohoe now believes the rules should now be strengthened.

Changing the regulations

“I have reviewed it and decided a change like this will be of help,” he said.

Due to the impending sale of the PTSB loan book, McGrath said his bill should be expedited through the Dáil.

The minister said it will be “quicker” for government to amend the Fianna Fáil bill rather than government introducing their own “from scratch”.

“I am committed to move forward with this bill as quick a way as possible,” said the minister.

In relation to the review of the code of conduct, Donohoe said he has asked the Central Bank to get back to him as soon as possible on the matter.

Lending institutions such as banks and building societies are bound by the Central Bank’s code of conduct.

It was first introduced by the Central Bank under the Central Bank Act 1989 and sets out that financial institutions must adopt specific procedures when dealing with borrowers experiencing arrears and financial difficulties.

Critics such as Sinn Féin have argued that the code should be put on a statutory footing. A department source said this is not possible due to the need to amend the code on a constant basis, with at least four amendments being made to the code since 2009.

The minister said he could not indicate today if the code would be amended in the future as that is up to the Central Bank to determine. However, Donohoe said he is committed to ensuring the best regulatory environment is in place before the PTSB sale is completed.

“Every act I take has consequences, all decisions made by me as minister of finance have consequences,” said Donohoe, who said he has to strike a balance ensuring the bank’s balance sheets are healthy, while also ensuring that mortgage holders are protected.

Harris on PTSB home loan sale: ‘It’s time to see a bit of humility from our banks’>

Minister concedes homeowners who engaged with PTSB may not have deals honoured>

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