Donohoe: 'I can't delay PTSB's loan sale'
Minister says banks should face Dáil grilling
Finance Minister Paschal Donohoe admits he cannot delay the sale of 14,000 home loans by Permanent TSB to ensure new laws clamping down on vulture funds are passed.
The minister said he will move quickly to introduce stronger regulation of foreign funds that buy up distressed mortgages if that is appropriate.
But he is not in a position to simply stall the sale or even delay it, despite being the majority shareholder in the bank.
"I don't have the power available to me to intervene in the compliance with that regulation or its timing," he said.
"We are talking about a bank that has non-performing loans (NPLs) and when I say the word non-performing loans, I am very conscious of the worry that is encompassed in that figure.
"But we need a stable and secure and successful Permanent TSB in Ireland."
Mr Donohoe has been given until next week to outline his plans for bringing vulture funds under the jurisdiction of the Central Bank.
Fianna Fáil has prepared legislation which it plans to introduce in the Dáil next week. The party's finance spokesman Michael McGrath has warned that if the Government doesn't back the new laws it could undermine the confidence and supply arrangement.
Mr Donohoe told an Oireachtas committee yesterday that he is "going to look at the regulations that are in place again, freshly".
While insisting that legal protections in place at the moment will not change, even if the owner of the loans does, he added: "I am conscious of the worry and apprehension that people feel on this matter, I want to do the right thing for all.
"It's vital across the coming period that a way be found that the NPLs that bank had, and other banks have, be reduced if we want to have a safe and secure banking system."
Mr Donohoe said he wants to "find a way for that work to happen without adding to the anxiety of people".
In the Dáil, Sinn Féin's Pearse Doherty claimed the "train has left the station".
"The impression is now being given publicly that by simply regulating these funds, mortgage holders will have some magical protection that they do not currently have.
"That has made the situation even worse because that has created a pathway for banks that heretofore would not have sold to vulture funds but now the impression is that if they are regulated, it is OK to sell to them, which is simply not the case."
Pressure will mount on PTSB to attend a hearing of the Oireachtas Finance Committee next week. Chairperson of the committee John McGuinness confirmed a formal invitation has been sent to the bank for Tuesday.
The questions to be posed by the committee members would include the make-up of the loans, the length of time people have been in difficulty and the efforts they have made to solve these difficulties.
It is understood PTSB is likely to decline an invitation on the basis it is actively engaged in the process to sell up to €3.7bn worth of loans.
Mr Donohoe said: "I believe the banks should be in front of the committee to answer questions that you may have.
"I understand there may be a number of banks that will be producing results soon and for legal reasons they may not be able to comment publicly on matters in the period just before they publish their results."