Banks ‘will profit on the back of pandemic’

Banks ‘will profit on the back of pandemic’

Banks are profiting from the Covid-19 pandemic, according to Sinn Féin’s Pearse Doherty and others who raised concerns about extra payment demands from struggling mortgage holders.

While the main banks have agreed to a three-month payment break for mortgage owners, Mr Doherty said lenders were throwing the extra interest for the delayed loans back onto borrowers.

He and other opposition TDs raised the problems with the mortgage payment breaks during debates about emergency laws that were fast-tracked through the Dáil.

Mr Doherty said: “The banks came out with great fanfare and said a moratorium or three-month break would take place. The reality is that these banks will profit on the back of the pandemic, and that is not acceptable.

“Let us consider Bank of Ireland. Its website shows this clearly. Someone with a 30-year mortgage of €200,000 will pay €1,804 extra to the bank because of this three-month break. That is how much extra the bank will take from such a customer. That is not acceptable.

“A vulture fund — let us name it — Pepper, is telling customers that it will give them the three-month break, but it will increase the repayment from €1,500 to €1,600 each month until the amount of money the customer should have paid, including the interest, is paid off. The fund is not extending it over the full duration of the loan.

Not only are the banks not waiving interest, they are charging interest on the interest they are rolling up. It is absolutely scandalous.

Independent Sligo-Leitrim TD Marian Harkin raised the same concerns and said it was high time for banks to show “solidarity” with people in a time of crisis.

“It must not be the case that payments deferred now still have to be paid within a specified time. People are outraged at the idea of interest on interest. I know the minister of state does not have complete flexibility, but these are extraordinary times and we require real and meaningful solidarity from our banks and financial institutions,” she said.

Former minister and Independent TD Denis Naughten also raised the issue. He said he had been contacted about Ulster Bank adding interest payments on top of existing mortgage amounts rather than putting them at the end of a loan. Lenders should “not put pressure” on families, he said.

Earlier, Finance Minister Paschal Donohoe said the coronavirus was costing Ireland some €300m a week.

“That cost could grow, depending on the challenge we face, or it could diminish if we are successful. That acknowledgement of risk and what could change, however, only deepens my view that this is the kind of action a State needs to take at a time of need.”

Fianna Fáil’s Michael McGrath warned that the recession the country was now facing must not be allowed “evolve into a depression across the economy”. He said huge decisions would have to be made, and it would not be a case of “flicking a switch” after the virus passed for the economy to recover.

Rise TD Paul Murphy called for a special levy on millionaires and billionaires to help the recovery.

    Useful information
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