Robert Troy (Longford-Westmeath, Fianna Fail)
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I thank the Cathaoirleach Gníomhach. I thank the Ceann Comhairle for selecting this matter.

Like, I am sure, many other people, I am dealing with many constituents who have no option only to deal with vulture funds. For example, in marital breakdown, a couple decided to come together and were prepared to sell the house. It was a voluntary sale. They engaged an auctioneer, did all the work for the vulture funds and submitted multiple financial statements in the hope that they would be allocated some bit of a write-down or re-location allowance. Despite continuous engagements, they received no write-down and no acknowledgement of the work that was done.

In the case of another vulture fund, Bank of Ireland sold the loans to it only last year. Both applicants are retired, one due to severe physical and mental ill-health. They have a small occupational pension and a social welfare payment. There is equity in the house. The fund will not engage. There is no write-down and no acknowledgement of co-operation.

In the case of another fund, both parties are residing in the family home despite marital breakdown. They have no choice to go to separate homes. They have to stay in the marital home living different lives. They agreed a monthly repayment before the interest rates started going up. The applicants were honouring that payment but, as the Minister of State will be aware, interest rates have gone up over the past number of years and vulture funds have been hugely aggressive in terms of how they have increased their interest rates, in some instances, up to 9.5% and 10%. The parties were unable to meet the monthly commitment that was set in place. The vulture fund had put in place an arrangement and then pushed up the interest rates, and they could not meet the commitment.

I have another vulture fund seeking the repossession of a family home where the original homeowner signed the home over to his daughter and son-in-law who re-mortgaged the house. The son-in-law has gone AWOL, no mortgage has been paid and now we have somebody in their 70s at risk of losing the family home. I am dealing with people like this day in, day out.

Dealing with vulture funds is like knocking one's head against a brick wall. Vulture funds invest in distressed assets. They form part of an unregulated world of shadow-banking. They only have one thing in common, that is, to seek above-average returns on their capital, and they are only accountable to their managing director and their investors.

It is important to note that vultures only tend to purchase home loans where there is a default or arrears exist. When a customer defaults or goes into arrears, including even voluntary arrangements like those I alluded to, the contract is broken and they effectively lose most of their contractual rights. They resist offering loan write-downs even though they have bought the borrowing at a greatly written-down amount. There are no deals to be done as there is no financing available in Ireland for retail borrowers who have got into difficulty. Payment terms are continually assessed, redefined and changed depending on affordability to the homeowner. You might say it is death by a thousand cuts. The interest rates are applied even though the maximum cash has been extracted. As I said in my earlier example, they are charging grossly excessive interest rates.

Where do we go to help these people? There are tens of thousands of these people who have got into difficulty with their family home. We have brought in huge supports under Housing for All, but most of these people who are trapped in dysfunctional or arrears situations have nowhere to go. When we try to engage with the vulture funds, they will not engage with us and there is nowhere independent we can go to try to get some help and reprieve for our citizens.

Mary Butler (Waterford, Fianna Fail)
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I thank Deputy Troy for raising this issue. I am taking this on behalf of the Minister, Deputy Chambers, who had a Cabinet meeting this afternoon and so is not in a position to attend. The Central Bank has put in place a range of measures to protect consumers who take out or have a mortgage or other loan. This consumer protection framework seeks to ensure all Central Bank-regulated entities are transparent and fair in all their dealings with borrowers and borrowers are protected from the beginning to the end of the mortgage life cycle, for example, through protections at the initial marketing and advertising stage, in assessing the affordability and suitability of the mortgage, and at a time when borrowers may find themselves in financial difficulties.

This consumer protection framework applies to all Central Bank-regulated entities that provide credit to consumers. Following the enactment of the consumer protection Acts of 2015 and 2018, and more recently the European Union regulations of 2023, the Central Bank consumer protection framework equally applies to any entity that services or, where applicable, holds the legal title to the rights of a creditor under a mortgage or other credit agreement. Any entity, therefore, which purchases a loan or acquires the legal rights of a creditor under a consumer credit agreement, unless it already has an appropriate authorisation from the Central Bank, will be required to be authorised or regulated by the Central Bank. These regulated entities must act in accordance with Irish financial services law and with the consumer protection regulatory framework that applies to all Central Bank-regulated firms.

This means that when a creditor sells or assigns its legal rights under a credit agreement to another creditor, the consumer protections that were available to borrowers prior to such a transaction remain in place. While the level of consideration paid for the sale and purchase of a portfolio of loans is a commercial matter for the parties to that particular transaction, the new creditor which acquires the contractual rights and benefits of the creditor following such a transaction will do so based on the terms of the existing loan agreement and based on the regulatory protections available to customers. Any new creditor will accordingly only be able to operate and enforce a credit agreement in accordance with the relevant terms of the particular agreement and in accordance with the relevant consumer protection framework.

This consumer protection framework is strong and it includes the various Central Bank statutory codes of conduct such as the consumer protection codes and the code of conduct on mortgage arrears. The code of conduct on mortgage arrears, in particular, provides specific protections to borrowers in arrears or facing a prospect of arrears on a loan secured on a primary residence. Under the CCMA, all relevant regulated entities such as a bank, a retail credit firm or a credit financing firm must proactively encourage borrowers to engage with it about financial difficulties that may prevent the borrower from meeting his or her mortgage repayments. When a borrower is experiencing repayment difficulty, a regulated entity must explore all of the options for an alternative repayment arrangement offered by the entity to determine if a more suitable and sustainable repayment option is available based on the borrower’s individual circumstances. If a borrower is not satisfied with the options proposed or if the regulated entity declines to offer an ARA, an appeals mechanism is provided for it in the CCMA. In addition, a regulated entity must review an ARA at intervals that are appropriate to the type and duration of the arrangement, including at least 30 calendar days in advance of an ARA coming to an end.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I know the Minister of State is only replying on behalf of her colleague, so I do not expect her to be able to answer all questions herself. To my mind, however, the simple fact is that the Central Bank is only concerned with ensuring its debt ratios are achieved. It was a cheerleader for the banks to sell off distressed assets to vulture funds in order that the bank's ratios in terms of non-performing loans would be achieved, the balance sheets would look healthier, it would be the best boy in the class and to hell with the customer the bank missold a product to. Let us not forget that the banks got it wrong. It was all blaming the customer because they borrowed too much, but in many instances the banks lent too much and did so because they were receiving commission on the back of sales. We learned earlier this month that the Central Bank was disbanding the consumer protection division within the Central Bank. Forgive me if I am not jumping up and down with excitement that the Central Bank has the consumers' interests at heart. I do not believe it does.

Because the vulture funds are dealing with non-performing customers, they have broken their contract. I will admit that sometimes consumers ignore it deliberately and engage in trying to manipulate the contract and trying not to pay what they need to pay. By and large, however, where people are trying their best, where they are coming forward with proposals to restructure, where they are looking for some sort of debt forgiveness based on the fact the vulture funds have bought the product at a much reduced rate, I do not believe we are doing enough to support these people. Will the Minister of State bring that back to the Minister, Deputy Chambers, to ensure we do more to support people who are making legitimate attempts to keep the family home and the roof over their heads?

Mary Butler (Waterford, Fianna Fail)
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I will bring back to the Minister what the Deputy has said, and I understand his passion. I do not think there is any Deputy in the House who has not engaged with people who have found themselves in the same predicament. I put on the record of the House that the overall level of mortgage arrears continues to decline and, as per statistics recently published by the Central Bank, the number of primary dwelling accounts in arrears is now below 46,000. The number of accounts in long-term arrears also continues to decline and is now just a little above 20,000 from 30,000 in December 2020. This is the lowest level of long-term arrears since the Central Bank started to publish regular data on mortgage arrears.

I emphasise that all regulated entities, including banks, other regulated mortgage lenders, loan owners and servicers are required as a matter of law to follow the statutory Central Bank codes of conduct, including the code of conduct on mortgage arrears and the consumer protection code. These codes are not voluntary and there can be no question of the regulated owners not following them. Failure to do so can result in the Central Bank using its range of powers to ensure adherence to the codes, including its administrative sanctions procedures or legal actions where appropriate. If the Deputy has information to indicate a regulated firm is not complying with the Central Bank's consumer protection framework, I ask that he submit the information to the Central Bank, which is the independent regulator of these financial institutions.

In addition to the protections available to consumers under financial legislation and the regulatory framework, a consumer also has recourse to the ombudsman. If a customer is not satisfied with how a regulated firm is dealing with him or her in the handling of his or her mortgage or if the consumer believes the regulated firm is not following the requirements of the Central Bank's code and regulation, he or she should make a complaint directly to the regulated firm. I will take back to the Minister what the Deputy has articulated.