Mortgage cut on cards as FF to force through law
FG warns new bill to tackle banks is 'illegal'
UP to 300,000 hard-pressed families are in line for a cut in mortgage payments after Fianna Fáil pushed through a new bill to crack down on lenders charging exorbitant variable rates.
Despite opposition from Fine Gael, TDs will tonight pass legislation which hands the Central Bank new powers to tackle lenders who refuse to bow to pressure to cut rates.
The Fianna Fáil bill has been re-introduced in response to a complete failure by many of the main lenders to pass on lower interest rates set by the European Central Bank (ECB).
The move has also heaped huge pressure on Finance Minister Michael Noonan, who has been strongly criticised for failing to take a tougher line with banks in the past.
In heated exchanges in the Dáil, Mr Noonan claimed the introduction of the bill caused a 10pc fall in bank shares.
Fianna Fáil's finance spokesman Michael McGrath rejected the claims and accused Mr Noonan of "scaremongering".
Nonetheless, the bill is set to be passed tonight after Sinn Féin and the Labour Party pledged their support.
Although some banks have cut variable rates in recent days, Fianna Fáil believes its bill will put further pressure on banks to cut "excessive" rates.
Under the legislation, the Central Bank would be given the power to impose rate caps.
The Government sought yesterday to warn of the dangers associated with the bill, which was described as being "unconstitutional" by Mr Noonan.
The minister said the measures would require EU approval before being implemented and that the Central Bank was opposed to being given such powers.