Vulture fund bill will hit mortgage market, says Donohoe
The Finance Minister has insisted that a private members' bill to give people a veto on having their mortgage sold to a vulture fund will lead to higher interest rates for all and restrict banks lending money.
Paschal Donohoe said that if the No Consent, No Sale bill was passed by the Oireachtas it would result in reduced availability of mortgages for consumers.
He told the Oireachtas Finance Committee that the bill would hinder the mortgage market.
Up to €10bn of distressed loans are set to be sold in the next few months by the likes of Ulster Bank. Vulture funds are expected to buy most of these.
Mr Donohoe said he was concerned about the conclusions in a draft scrutiny report from the committee on the bill that had been circulated to members in the past few days.
Two drafts of the report recommend that the bill go forward to the next stage in the legislative process.
Mr Donohoe said his department had "serious concerns" about the bill.
The bill has been drafted by Sinn Féin's Pearse Doherty and it will mean that each mortgage holder's consent would have to be given to the bank selling a portfolio of loans before the mortgages could be sold. Mr Donohoe told the committee that the passing of the legislation would mean higher mortgage rates for customers, particularly those with variable rate mortgages.
He accused Mr Doherty of being reckless and promoting badly thought-out policy.
"We cannot ignore the very serious concerns expressed by my department, the Central Bank of Ireland and the European Central Bank in relation to this bill," Mr Donohoe said.
Mr Doherty told the committee there was an attempt by Fine Gael and Fianna Fáil to "scuttle the bill".
He accused Fianna Fáil finance spokesman Michael McGrath of seeking amendments to the Finance Committee draft scrutiny report that would nullify the bill.
He also accused Fine Gael of "protecting the vultures instead of the ordinary people" by sending five members to the committee meeting and attempting to delay the passing of the bill.
The committee postponed discussing the scrutiny report until later this week.