Brokers Ireland has appealed to politicians to consider very carefully the No Consent, No Sale Bill 2019 currently going through the Oireachtas on the basis that it is likely to negatively impact mortgage holders in terms of interest rates and stymie badly needed competition in the banking sector.
Rachel McGovern, Director of Financial Services at the organisation which represents 1,250 broker firms, noted that such consequences are likely should the Bill be passed by the Oireachtas.
“European Central Bank Chief, Mario Draghi, acknowledged to the Finance Committee of the Dáil in November that there is a monopoly in Irish banking which is keeping interest rates at the highest levels in the eurozone. We are now in second place behind Greece.
“While we are still 1.25 percent ahead of the euro area average with less attractive long-term mortgage products by comparison with many of our European counterparts, it is important to acknowledge that there have been improvements over the last year or so,” Ms. McGovern remarked.
The Director of Financial Services stated that the Bill currently going through the Oireachtas could bring a halt to this trend and is also likely to impact the badly needed entry of more competition into the Irish mortgage lending market.
“While this message may be unpopular for politicians to articulate in an environment where the tracker mortgage scandal gets yet deeper, nonetheless, it is something we would implore them to consider very carefully, in the interest of mortgage holders and those wishing to get their first mortgages.
“In our view this Bill is a step too far, it represents overzealous interference in the market that will have severe unintended consequences.
“While the vulture fund approach by lenders to dealing with the mortgage arrears crisis may not have been the best one and also coming far too late, nonetheless, it does not follow that compelling lenders to seek the written consent of borrowers before transferring their mortgages and having documentation approved in advance by the Central Bank in each case, will improve the situation. It may merely prolong an already unnecessarily elongated process,” Ms. McGovern continued.
Concluding, the Director of Financial Services noted that the Central Bank has already expressed significant concerns on the terms of the Bill from a consumer protection, prudential supervision and financial stability perspective.