Wednesday 7 December 2016

Government faces first Dáil vote defeat on issue of mortgage rates

Published 17/05/2016 | 02:30

The bill, being tabled by Fianna Fáil’s finance spokesperson Michael McGrath, proposes handing the Central Bank new powers to force lenders to reduce interest rates. Photo: Tom Burke
The bill, being tabled by Fianna Fáil’s finance spokesperson Michael McGrath, proposes handing the Central Bank new powers to force lenders to reduce interest rates. Photo: Tom Burke

The new Government looks set to lose its first Dáil vote tomorrow when Sinn Féin sides with Fianna Fáil over the issue of mortgages.

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The bill, being tabled by Fianna Fáil's finance spokesperson Michael McGrath, proposes handing the Central Bank new powers to force lenders to reduce interest rates.

A similar proposal was voted down by the then Fine Gael/Labour government last year.

But the new Dáil arithmetic means the Government looks set to suffer its first legislative defeat when the bill is voted upon tomorrow night.

Sinn Féin's finance spokesperson Pearse Doherty told the Irish Independent last night that his party will vote with Fianna Fáil on the issue.

A party spokesperson said the move was consistent with its pledge to be "constructive" in opposition, adding that the measures would go a significant way toward assisting hard-pressed homeowners. The spokesman said the bill contained proposals similar to ones previously put forward by Sinn Féin.

The resubmitted bill would give powers to the Central Bank to enforce cuts in rates.

The measures would mean that Central Bank Governor Philip Lane would have to assess the mortgage market in the context of rates.

And if it was proved that market failure was the reason why variable rates were so high, then the Central Bank would have the power to set a variable rate or cap the rate that can be charged.

Irish Independent

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