The two main Opposition parties attacked the new insolvency plan for giving too much power to banks and other lenders as they must approve each debt settlement.
Fianna Fáil justice spokesman Niall Collins said the regime would give little comfort to insolvent borrowers and Sinn Féin finance spokesman Pearse Doherty said the scheme condemned participants to years of living hand to mouth.
Mr Collins said there was little comfort for families crippled by debt and claimed the plan was a bankers’ charter.
“When it comes down to crunch talks with debtors, the balance of power will remain firmly in favour of the banks,” Mr Collins said.
“The Government has ensured that the dysfunctional banking system will still hold all the cards in personal insolvency negotiations. As long as the banks retain a veto, ordinary homeowners will continue to struggle in their efforts to get a fair deal and secure a decent future for their families.”
Mr Collins added: “The thousands of people across the country who are simply unable to cope with crippling mortgage and personal debt do not need a system that allows the banks to retain all the control.
“What they need is an independent debt settlement office that will ensure fairness and consistency in insolvency agreements.”
Similarly, Mr Doherty accused the Government of siding with the banks and not the people. “These guidelines are a bankers’ solution to people’s problems, to a societal problem,” he said.
Protected banks
Mr Doherty went on to argue that the scheme rewarded and protected banks, even though they were irresponsible with lending and unresponsive to reasonable restructurings.
“Yet, once again the banks are rewarded and protected. Once more they have the final say,” he said.
“This week we see these bankers’ guidelines and next week we will see the Government moving to allow a greater number of repossessions through a Dáil Bill. We know too that they are to allow more harassment of borrowers.
“It is now as clear as day that the Government’s answer to the mortgage crisis is the same as the bankers’ answer – to squeeze every last penny out of people and even move to allow repossessions.
“The banks’ veto must be removed. That means amending the Personal Insolvency Act to remove their veto and not facilitating repossessions of the family home.”
