Friday 21 November 2014

Enda Kenny threatens banks on mortgage debt forgiveness for homeowners

Fionnan Sheahan and Lise Hand

Published 17/10/2012 | 10:49

An Taoiseach Enda Kenny TD pictured in Philadelphia, Pennsylvania where he gave the keynote address to the US Ireland Legal Symposium hosted by the Brehon Law Society.Photo: Liam Sweeney

TAOISEACH Enda Kenny has warned he is unhappy with the pace at which the banks are engaging in debt forgiveness with homeowners in mortgage distress.

Mr Kenny threatened to bring in new laws to force the banks hands if the Financial Regulator asked for extra powers.

The Taoiseach also said homeowners would have the use of a Personal Insolvency Bill soon.

He said if the banks did not engage with customers, then homeowners would have legislation behind them to allow debt forgiveness and writedowns.

"It's not a case of standing by while this boils over," he said.

Mr Kenny said the banks had been called into the high-powered Economic Management Council and told "in plain English" that they had to speed up the pace of debt forgiveness.

The Taoiseach came under pressure in the wake of one of the most senior regulators in the Central Bank criticised the banks’ attitude to the mortgage crisis.

Dealing with the banks is like dealing with troublesome teenagers, the Central Bank's director of bank supervision Fiona Muldoon said.

She said banks were in denial about the extent of the mortgage crisis, and were refusing to come up with realistic solutions.

Earlier, Social Protection Minister Joan Burton claimed banks were keeping the cash given to them by the taxpayer for loans, rather than lending to businesses and families.

Ms Burton said the banks were given money to boost their balance sheets and allow them to lend.

"Banks are conserving their capital, rather than lending to business and housebuyers," she said on RTE's Today with Pat Kenny.

She also once again hinted at a cut in child benefit payments.

The minister said she was "going to do my best" to protect basic weekly social welfare payments, such as the pension and dole.

But she again failed to say child benefit won't be cut in the Budget.

Ms Burton said she wanted to take a look at the services available for children.

The minister spoke about school meals schemes and book loans, but appeared to rule out giving food vouchers instead of cash.

She said she preferred the taxation model for child benefit, but this wasn't possible, and was also examining a top-up system for low income families.

"This has to take place over a number of years," she said.

"What we need to do is the best thing that brings the best outputs to those in poverty," she added.

An in-house group in the Department of Social Protection has recommended a cut to the €140 monthly child benefit payment of €40, with top payments for families living in poverty.

Promoted articles

Read More

Promoted articles

Editor's Choice

Also in Irish News