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Personal Insolvency Bil 2012: From the Seanad (Resumed) (Continued)

Wednesday, 19 December 2012

Dáil Éireann Debate
Vol. 787 No. 4

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(Speaker Continuing)

[Deputy Alan Shatter: Information on Alan Shatter Zoom on Alan Shatter] If there is a level of co-operation, however - what I would describe as snarling co-operation over-embedded with threats - it will become apparent at an early stage in this process that is the way financial institutions are dealing with this.

This Government is a lot more resilient than the Deputy is suggesting and I do not think we are going to have a general election in the next one to two years. I cannot predict how long I will be in this post. No Minister should ever predict how long they will be in any post, but I am articulating Government policy, not just my personal preference. It is Government policy that the financial institutions engage constructively and that there has to be, in appropriate circumstances, genuine engagement which may involve debt forgiveness. If we find in the early operation of this legislation that either no financial institution is willing to engage in that manner or that only one or two do so and no one else will, it will not take me 18 months to come in here with amending legislation. It will not happen that way. I wanted to say that because it is important.

We do have to get experience of how this works for some months at least. We must also see what place creditors, including secured creditors, are in after the legislation is enacted. In the context of the reports the Deputy gives of comments made this afternoon in a committee of this House by one individual, I would find such comments very disappointing and not reflective of the public interest. It is important that individual should give greater consideration to the proper workings of this legislation because if there is a lack of co-operation we have a remedy in this House to deal with that.

Deputy Pádraig Mac Lochlainn: Information on Pádraig MacLochlainn Zoom on Pádraig MacLochlainn I commend Deputy Donnelly for raising this matter and, in fairness, he has raised it throughout the process. The concern is that we would not have a situation whereby the bankruptcy period would be reduced in real effect. There is also concern about a bank veto and opposition amendments have been tabled to try to curtail that, but they have been resisted.

I have had a chance to read over some of the comments made by Ray MacSharry and his colleague Margaret Hayes who are public interest directors with Permanent TSB. For the record, they have been paid €510,000 in fees since 2008. It is a hell of a lot of money to represent the public interest. I am shocked at what Deputy Donnelly has reported and what I have just read about these comments. It goes against all the debate we have had on debt forgiveness in Irish society in recent years. The Government has had an objective to deal with this issue. Deputy Donnelly has spoken at length about this area of huge concern to people. Not having a reduction in the period of bankruptcy is a very punishing system in this State.

I presume this Bill will be passed tonight and will go to the President for his stamp of approval. We will then need to reassure the public that at last there is some mechanism or process in place for people who were not reckless and believed what they saw in the media from their political leaders, economists and estate agents - that there would be a soft landing if anything went wrong. At the time, they were encouraged to purchase a home and invest. We now know that 24% of home owners are in mortgage distress. It involves approximately 180,000 families and individuals so we have a real crisis on our hands and this Bill is part of the response to that. It is critical, however, that the message comes from Government that if the banks and other financial institutions abuse any element of this legislation to prevent genuine debt forgiveness to families in that situation, the Government will immediately move - as quickly as it pushed through the family home tax legislation last night with a guillotine - to address that issue.

While we have serious concerns, and Deputy Donnelly has outlined his concerns also, we hope the impact of this legislation is to make a difference. Nonetheless, the arrogant comments of Ray MacSharry and Richie Boucher are acting against the public interest. I do not need to remind the Minister that these financial institutions are now under the control of the Irish people, so there needs to be a bit of humility particularly among public interest directors.

My final point throws the whole matter into sharp focus. The Law Reform Commission held an event last week at which one of the main points of focus concerned corporate responsibility and legislation in the area of white collar crime. There were some really interesting contributions. At the end, the eminent national and international experts were asked to define the role of public interest directors and what they have achieved. It was clear from the responses that they were not quite sure. Ultimately, however, they appeared to be still acting in the interests of the banks and their shareholders, even though that is not what they are paid to do.

I appreciate the Minister's immediate response to these comments. He has not had a chance to look at the transcript, but I would invite him to examine those comments. When the legislation is passed, he should act immediately to reassure the public that those outrageous comments are rebuked and confronted. Reassurance should be given that if banks seek to abuse this legislation and do not meet their responsibilities to give people a chance of debt resolution, the Government will move extremely swiftly - as swiftly as it did with the property or family home tax yesterday - to address whatever arises and put this thing straight.

One of the biggest challenges facing our people over the next generation involves mortgage distress, debt resolution and debt forgiveness for families who need a chance to move on. I appreciate that a huge amount of work and deliberation has gone into this legislation. Deputy Niall Collins and I have sat through all of the debate with the Minister. We have serious concerns and if they are quickly vindicated, I urge the Minister to reassure the public swiftly. We cannot have all the work and goodwill that has gone into this legislation torn apart by people who are acting against the interests of the Irish people, yet who are, unbelievably, being paid by the public.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett On behalf of the United Left Alliance, I wish to express our concern and disappointment. In general terms, we all want to achieve some relief for those in mortgage distress or who are otherwise stuck under the burden of significant personal indebtedness. There is a genuine desire across the House to do something about that, but it is disappointing that we have not gone a hell of a lot further in this legislation.

In the amendments we tabled on Committee Stage - pretty much all of which were ruled out of order - we urged a model whereby the insolvency agency the Government intends to establish would have the power to impose fair settlements on banks.


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