Paschal Donohoe to meet FF over fund concerns

Finance Minister Paschal Donohoe is to discuss demands from Fianna Fáil that vulture funds be regulated after concerns about Permanent TSB selling off 20,000 mortgage loans.

Fianna Fáil’s Michael McGrath wants the Government to enact as a “priority” proposed legislation to regulate funds amid concerns over the sale of the loans. His bill will be published today.

PTSB is lining up the sale of billions of euro worth of loans. There is concern the Central Bank has no supervision over unregulated firms buying up these debts.

Fianna Fáil is trying to stop the State-owned bank offloading the distressed loans, warning that an unregulated fund will make families “vulnerable” trying to recoup the debts.

There are fears large numbers of repossessions could follow or that borrowers would face increasing pressure to pay up debts.

Mr McGrath yesterday spoke with Mr Donohoe by phone and they have agreed to meet tomorrow at 4pm.

“If one person has their loan regulated by a full regulated financial institution and the other person has their loan regulated by an unregulated vulture fund, they are in a much more vulnerable position in practice,” said Mr McGrath.

He called on PTSB to make a full statement over what it would do with the loans.

The Department of Finance said it cannot interfere with commercial banks and how they sell their loans, despite the fact PTSB is 75% State owned.

A spokeswoman for Mr Donohoe said he was “open to examining measures to ensure mortgage holders are treated fairly”.

It was also pointed out that some regulation had taken place under 2015 legislation.

Fianna Fáil is threatening to push the Government on the matter under the terms of the confidence and supply agreement, the deal by which it supports Fine Gael in power.

Mr McGrath said: “Next week this bill will be the Fianna Fáil private member’s bill, so there will be a full debate and a vote if necessary. Beyond that we want enactment.”

At the Fianna Fáil frontbench meeting in Leinster House yesterday, TDs, senators, and party leader Micheál Martin backed Mr McGrath’s moves. They heard the loans could be sold for a lower price if needs be, said party sources.

Members want Mr Donohoe to instruct PTSB to ensure the mortgage loans cannot be sold to unregulated funds. It is unclear how the European Central Bank might view this under Ireland’s commitments to fix the banks.

There were suggestions Fianna Fáil is driving ahead with the mortgage protection move for electoral purposes, following recent positive polls for Fine Gael.

This was rejected by Mr McGrath.

He pointed out that the Central Bank, over two years ago, recommended that vulture funds needed to be regulated.

“The Central Bank was at odds with the government decision back in 2015 not to regulate these vulture funds,” said Mr McGrath.

“The Central Bank has confirmed in writing that their preference was that the actual loan owners, the vulture funds, would be fully regulated and that didn’t happen.”