Posted by in News.

  • Mortgage & personal debt biggest issue facing Galway families
  • Urgent legislative action needed

Fine Gael Galway West Senator Fidelma Healy Eames has today (Wed) said that it’s time for legislative action to force banks to pass on ECB rate cuts. She was speaking following confirmation from National Irish Bank that it is to hike up interest rates later this week.

“It appears clear that many banks are determined to defy the wishes of the Government and the Financial Regulator. A number of institutions – including Ulster Bank, Bank of Ireland and AIB – have indicated that they will not be passing on the rate cut announced by the ECB last week. This is outrageous, given the fact that 56,000 mortgage holders are already three months or more in arrears. Galway families between the ages of 30 to 55 have told me the biggest challenge facing them is mortgage debt and personal debt. They report finding the situation ‘hopeless’ and ‘difficult to cope’. The banks, by refusing to pass on rate cuts, are ensuring that even more people will fall behind in their repayments. An outrage when one considers that these are the very same citizens whose taxes have been used to bail out six of the institutions.

“The gravity of this situation has been further compounded by the announcement from National Irish Bank that not only is it not passing on last week’s ECB rate cut, it is hiking up rates by almost 1% this Friday. This can only be seen as a direct challenge to the Government’s position.

“Over the last three years, during the worst economic crisis this country has ever seen, banks have been pushing up interest rates. The Taoiseach, the Minister for Finance and the Financial Regulator have all been piling pressure on the banks to pass ECB rate cuts on to their customers. And yet they are being ignored. I think it’s time that we seriously look at the legislative options open to us, to force the banks to take a fairer approach.

“The Taoiseach told the Dáil yesterday that he is prepared to engage with Regulator if an increase in his powers is needed. I believe such a move is now necessary. In the words of the Taoiseach, the Regulator’s job is to ensure a level playing pitch exists in the banking sector. It’s totally unfair that banks can force their customers to pay higher mortgage rates, in a bid to recoup losses.

“We need to explore what legislation could be introduced to address this problem. I think it is entirely reasonable for the Government or the Financial Regulator to have significant input on the decisions taken by banks that have been bailed out by the State. Banks cannot be allowed to continue holding their customers to ransom, with utter disregard for the devastating impact their decisions will have on individual homeowners. In the case of Ulster Bank I would hope it would respect it’s Irish customer base and pass on the ECB cut. Otherwise the next time there is an ECB rate hike, why should we acquiesce and pay it to them. What is good for the goose is good for the gander. I am raging with this high-handed arrogance.

The Irish people have had enough of being taken for granted. This will not go away till resolved.